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Free Money
State tax credits foster no-cost support for charities, schools
By J.D. Long-García, jdlgarcia@catholicsun.org
December 18, 2008
This year, instead of exchanging traditional Christmas presents, some Valley families are giving gifts to charitable organizations.
Holy Cross Father Bill Wack, director of André House, knows of such a family.
“The kids decided they had what they needed, so the parents are giving to the poor on their behalf,” he said.
With a struggling economy, more people are relying on the services that André House, Catholic Charities and other charitable organizations provide. Unfortunately, the economy is also having a negative impact on donors.
But Fr. Wack is hopeful. There’s a way to help the poor financially, and it won’t cost you a thing.
In Arizona, you can redirect your state taxes to non-profit organizations that serve the working poor. If you’re single, you can get a credit for up to $200. If you’re married and file a joint tax return, you can get credit for $400.
What does that mean?
Well, if you pay $600 in state taxes, but you gave $50 to a non-profit serving the working poor, you’ll get $50 back when you file your taxes — dollar for dollar.
But it doesn’t stop with the working poor. You can also redirect your taxes to Catholic education.
Whatever you give to the Catholic Tuition Organization of the Diocese of Phoenix, you’ll get it all back when you do your taxes. As long as you paid enough in state taxes, you can get up to $500 per individual or $1,000 for a married couple filing a joint tax return.
So, for example, say you owed the state government $500 in taxes. You write a $500 check to the Catholic Tuition Organization of the Diocese of Phoenix before the end of the year.
In the coming months when you file your taxes, you’ll get a refund from the state for $500. You already paid your taxes — you just chose where the money was spent.
Paul Mulligan, executive director of the tuition organization, wants more Catholics to redirect their money toward Catholic education. It can help pay tuition for thousands of Catholic children who wouldn’t otherwise be able to attend.
“Trade your tax bill for scholarships,” Mulligan explained. “That’s a good trade.”
But the organization’s focus goes beyond the dollar-for-dollar tax credit. Mulligan emphasizes the richness of Catholic education.
Nearly all students who attend Catholic high schools graduate, compared to 70 percent of public school students, Mulligan said.
“For people who care about the bottom line, this comes back to them in hard-working, tax-paying Arizonans,” he added.
On top of that, it costs Catholic schools less money to educate a child. While it costs the state $8,000 to educate a student, it costs Catholic schools $5,000, according to Mulligan.
“Catholic schools in the Diocese of Phoenix save taxpayers more than $90 million a year,” Mulligan said. “This is good stewardship that doesn’t cost you anything.”
Individuals and married couples aren’t the only ones getting in on this. A law implemented two years ago allows corporations to make contributions to a school tuition organization like the Catholic Tuition Organization of the Diocese of Phoenix and receive tax credit up to the amount of its tax liability.
The National Bank of Arizona is one of the corporations that help students attend Catholic schools.
“A number of our employees have been active in public schools,” said Pete Hill, who works for the bank. “It’s a great way to redirect tax dollars to Catholic education. So it’s a win for everyone involved.”
Ron Johnson, executive director of the Arizona Catholic Conference, the public policy arm of the state’s three dioceses, said the tax credit programs are growing.
“Arizona is really the leader of school choice in this country and we need to protect that,” he said. “We want to get money to people who need it the most.”
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