The Arizona Private School Tuition Tax Credit Law, A.R.S. Section 43-1089, allows a married couple filing jointly to make a donation to the ACSTO up to $1000 and receive a dollar-for-dollar tax credit against the taxpayer's Arizona state income tax.  A single taxpayer is limited to $500.  If the taxpayer has actual Arizona state income tax less than the maximum allowable, the available credit in a given year is limited to the actual tax.  The law allows a carry forward for up to five years if a donation is made in excess of the actual state income tax liability. Arizona State income tax forms 301 and 323 are used for claiming the credit.

The public school extracurricular activities tax credit of $400 for married couples filing jointly may be taken in addition to the private school tuition tax credit.  These donations should be made directly to the public (including charter) school of your choice.

A taxpayer may also be able to claim a federal deduction for the donation. The taxpayer should consult their tax advisor for specific tax advice.

A.R.S. 43-1089 (G) now allows you to donate up until you file your Arizona income taxes, not later than April 15, and have it count toward the prior tax year at the election of the donor, starting with tax year 2010. A.R.S. 43-7089 (C) allows for a yearly increase to the donation maximum per the Consumer Price Index, starting January 1, 2011.