Arizona Tax Credit

In conjunction with the Institute for Better Education (IBE).

Providing tuition assistance for private school students, including students at Hopi Mission School.

Who is IBE?

The Institute for Better Education (IBE) (a nonprofit entity) is a school tuition organization providing scholarships for children to attend private Christian schools.  Donations made to the fund are eligible for Arizona state income tax credit-maximum $1000.

Their purpose is to give support to Christian education through the provision of financial assistance for families who need help in covering the cost of tuition.

Who can donate?

A married couple filing a joint return can give up to $1034 to The Institute for Better Education and receive a tax credit for the full amount of the donation. A single individual or head of household can give up to $517.   This Arizona statute allows you to support school tuition organizations.

Is this really relevant for me?

Yes, if you plan to file an Arizona tax return, this is relevant.  A taxpayer who pays personal income tax to the State of Arizona can donate up to $1000 to Institute for Better Education (IBE) during any given tax year.  The full amount can be taken as a tax credit during that year.  (Married couples filing separate returns can claim a combined total of $1000).  Receipts will be issued to each donor to be used for the tax purposes.  Businesses cannot claim the donation as a tax credit, although donations from businesses are welcome and are tax deductible.

How does a tax credit work?

A tax credit differs from a tax deduction in that it gives you full credit for the donation, thereby reducing your tax liability.  A tax credit is better than a deduction because with a tax credit you receive  a dollar-for-dollar refund from the Arizona Department of Revenue.

Example 1:  You owe $1,500 in Arizona income tax and you had $1600 in withholdings.  Your refund from the State would be $100.  Now assume you donated $1000 to the scholarship fund.  Your refund from the State is now $1,100.

Example 2:  You owe $200 in Arizona income tax and you had zero in withholdings.  Assume you donated $300 to the scholarship fund.  Your tax due is zero.  Also, you would have a $100 (donation) as a carryover, good as a tax credit for the next year.

Who benefits from scholarships?

Families wishing to send students to a private Christian school will benefit directly from your support to the fund.  Scholarships for students are made possible, as funds are available, through an application that is made directly to the fund.  Each application is evaluated on its own merit.

FAQs:

If I have already given $400 to the public schools, can I still donate $1000 to the Christian school scholarship fund?

Yes, even if you have already supported a public school program, you can still contribute up to $1000 to a school tuition organization and reap the full tax benefits from both programs.

May my $1000 donation also be shown on my Federal tax return?

Yes, donors who itemize may deduct the contribution on their federal returns and still receive the dollar-for-dollar refund from the State of Arizona.  (Note that for the State this is a tax credit, not an itemized deduction).

How will my donation benefit Hopi Mission School?

All donations made to Institute for Better Education (IBE) that are designated for Hopi Mission School will be routed to us.  Please be sure to make that designation with your donation.

How do I know that my donation will directly help the students?

The regulations of the Arizona Tax Credit program require that all donations can only be used for tuition scholarships.  Your donation will help pay the tuition for Hopi Mission School students.

If you have more questions, contact Hopi Mission School at (928) 734-2453
or email us at HMS@HopiMissionSchool.org.

You can also contact the Institute for Better Education (IBE)