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2014 Credit for Corporate Contributions

Arizona Form

to School Tuition Organizations

335

following fiscal year. The state’s fiscal year begins on July

Obtain additional information or assistance by calling one of

1, and ends on June 30 of the following year.

the numbers listed below:

A taxpayer shall not claim a credit for this credit and the

Phoenix

(602) 255-3381

credit provided under A.R.S. § 43-1184, claimed on Arizona

From area codes 520 and 928, toll-free

(800) 352-4090

Form 341, with respect to the same contribution.

Obtain tax rulings, tax procedures, tax forms and

CREDIT PREAPPROVAL PROCEDURE

instructions, and other tax information by accessing the

department's website at

Before claiming the credit, obtain a copy of the school

tuition organization’s preapproved application. Include a

General Instructions

copy of the preapproved application with Form 335. Failure

to do so could result in a disallowance of this credit.

Arizona Revised Statutes (A.R.S.) § 43-1183 provides a

nonrefundable corporate income tax credit for contributions

The department will preapprove the credits on a first-come,

made to a school tuition organization that provides

first-served

basis.

The preapproval process works as follows:

scholarships or grants to qualified schools. The school



Before making the contribution, the taxpayer notifies

tuition organization must be certified pursuant to Chapter 15

the school tuition organization of the intended amount.

of Title 43 at the time of donation.



The school tuition organization requests preapproval

Contributions designated as being for the direct benefit of

from the Arizona Department of Revenue.



any specific student will not qualify for the credit. This

The Arizona Department of Revenue preapproves or

credit is in lieu of any deduction taken under Internal

denies the request within twenty days after it has

Revenue Code § 170 for state tax purposes.

received the request, and notifies the school tuition

organization.

The tax credit is equal to the amount the department has



If the request is preapproved, the school tuition

preapproved, if the taxpayer has made that amount of

organization notifies the taxpayer immediately.

contribution to the school tuition organization within twenty



The taxpayer must make the contribution within twenty days

days of when the school tuition organization notified the

of receiving notice from the school tuition organization.

taxpayer of the preapproval.

QUALIFIED SCHOOL TUITION ORGANIZATION

The tax credit is available only to corporate taxpayers. A

REQUIREMENTS

partnership may pass this credit through only to its corporate

partners, each of which may claim a pro rata share of the

The school tuition organization receiving contributions under

credit based on ownership interest. An S corporation may

this program must be certified pursuant to Chapter 15 of

claim this credit against income Arizona is taxing at the

Title 43 at the time of donation.

corporate level, or the S corporation may elect to pass this

For 2014, each educational scholarship or tuition grant is

credit through to only its exempt organization shareholders,

limited to $5,000 for kindergarten through eighth grade

each of which may claim a pro rata share of the credit based

students, and to $6,300 for students in grades nine through

on ownership interest.

twelve. Each limitation will each increase by $100 in each

The credit is available to an exempt organization that is

subsequent program year.

subject to corporate income tax on unrelated business

Specific Instructions

taxable income (UBTI). The credit must result from the

activities that generate UBTI.

Complete the name and employer identification number

Co-owners of a business, including corporate partners of a

section at the top of the form. Indicate the period covered by

partnership or exempt organization shareholders of an

the taxable year. Include the completed form with the tax

S corporation, may each claim only the pro rata share of the

return.

credit allowed based on the ownership interest. The pro rata

All returns, statements, and other documents filed with the

share that would be distributed to non-eligible partners or

department require a taxpayer identification number (TIN).

shareholders is lost. The total of the credits allowed all such

The TIN for a corporation, an exempt organization with

owners may not exceed the amount that would have been

allowed for a sole owner of the business.

UBTI, an S corporation, or a partnership is the taxpayer's

employer identification number. Taxpayers that fail to

If the allowable tax credit exceeds the taxes otherwise due,

include their TIN may be subject to a penalty.

or if there are no taxes due, the amount of the credit not used

to offset taxes may be carried forward for not more than five

Part 1 - Current Taxable Year’s Credit

consecutive taxable years as a credit against subsequent

Calculation

years' income tax liability.

List each school tuition organization’s name, address, credit

The amount of total credits the Arizona Department of

approval number, and approved contribution amount. If you

Revenue may allow cannot exceed $10 million in the first

made contributions to more than ten organizations, complete

fiscal year. This amount will increase by 20% in each

and include additional schedules.

Instructions For Form 335 - Arizona Credit For Corporate Contributions Arizona Form To School Tuition Organizations - 2014

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