Tax Time Warning: Arizona private school tuition tax credits may raise federal flag
December 31st, 2009
The Arizona Republic reported that private school tuition tax credits that are earmarked for individual students may be in violation of federal law. While tax credits reduce income taxes owed on a tax-payer’s Arizona income tax return, most donors also report a private school tax credit donation to a School Tuition Organization or STO (which is considered a 501(c)(3) charity under tax law) as a charitable deduction on their federal income taxes. Federal law forbids the earmarking or swapping of donations – a practice that has been encouraged by some schools and STO’s. To read more about this potential federal tax issue see the article below.
.
Ariz. tuition-credit practices may violate federal tax laws, Arizona Republic, Dec. 27, 2009
Categories: Recent News, School Tax Credits