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AZ Tax Credit Donations Made after 8-27-18 No Longer Deductible on Federal Itemized Tax Returns

In a recent IRS news release, the IRS has proposed regulations that will prevent claiming AZ Tax Credit Donations as an itemized deduction for federal purposes. In recently released proposed regulations, the IRS said that any Tax Credit donations made after August 27, 2018 will no longer be deductible for federal tax purposes.  While you will still get the AZ Tax Credit, you will not be able to use it as a federal deduction.  The proposed regulations are not yet final, but if they are made final, the last day to be able to claim the donation as both AZ Tax Credit and Federal itemized deduction is August 27, 2018.

AZ has five different Tax Credits which will be affected by the proposed regulations:

  • Public School Tax Credit
  • School Tuition Organization Tax Credit
  • Qualifying Charitable Organization Tax Credit
  • Foster Care Tax Credit
  • Military Family Relief Fund Tax Credit

If you are counting on the AZ Tax Credit donation to pay your AZ tax bill, no problem. However, if you are counting on it to reduce your federal tax bill, you will probably not be able to use the donation as both an AZ Tax Credit and a federal deduction.



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Please Note: We are NOT attorneys and do NOT provide legal advice. Your information is confidential, but we do not have attorney-client privilege. If you need legal advice, you will be referred to an attorney.

Arlene Rheinfelder, EA, CP AZCLDP

"I help solve people's problems. There is nothing more rewarding than helping someone through a difficult situation, and helping them to find a good resolution." 


Melissa Hill, AZCLDP

I love the challenge of finding a way to help each person's unique situation. It is never the same because each person is different with their own needs and wants.

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