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2021 Credit for Contributions Arizona Form
to Private School Tuition Organizations 323
For information or help, call one of the numbers listed: FOR CALENDAR YEAR FILERS: Credit eligible cash
Phoenix (602) 255-3381 contributions made to a private STO from January 1, 2022, to
From area codes 520 and 928, toll-free (800) 352-4090 April 18, 2022, may be used as a tax credit on either the 2021
Tax forms, instructions, and other tax information or 2022 Arizona income tax return.
If you need tax forms, instructions, and other tax information, If you claim this credit in 2021 for a cash contribution made
go to the department’s website at www.azdor.gov. from January 1, 2022, to April 18, 2022, you must make an
adjustment on your 2022 Arizona Form 140 Schedule A, Form
Income Tax Procedures and Rulings
140PY Schedule A(PY) or A(PYN), or Form 140NR Schedule
These instructions may refer to the department’s income tax A(NR).
procedures and rulings for more information. To view or print
these, go to our website select Reports, Statistics and Legal If the allowable tax credit is more than your tax or if you have
Research from the main menu, then click on Legal Research no tax, you may carry the unused credit forward for up to the
and select a Document Type and Category from the drop down next 5 consecutive taxable years’ income tax liability.
menus. A private STO is an organization that meets all of the
Publications following:
•
To view or print the department’s publications, go to our The organization is tax exempt under Section 501(c)(3) of
website select Reports, Statistics and Legal Research from the the Internal Revenue Code (IRC).
main menu then click on Publications in the left hand column. • The organization allocates at least 90% of its annual
revenue from contributions to educational scholarships or
General Instructions tuition grants.
• The organization makes its scholarships or grants
NOTE: You must also complete Arizona Form 301, available to students of more than one qualified school.
Nonrefundable Individual Tax Credits and Recapture, and
A “qualified school” means a preschool that offers services to
include Forms 301 and 323 with your tax return to claim this
students with disabilities, nongovernmental primary or a
credit.
secondary school that is located in Arizona. The school
Arizona law provides a credit for cash contributions made to a cannot discriminate on the basis of race, color, handicap,
private school tuition organization (STO) that provides familial status, or national origin and requires all teaching staff
scholarships or grants to qualified schools. and personnel that have unsupervised contact with students to
This credit is available only to individuals. Corporations may be fingerprinted. A qualified school does not include a charter
not claim this credit. A partnership may not pass the credit school or programs operated by a charter school. The primary
through to its partners. An S corporation may not pass the school must begin with kindergarten and the secondary school
credit through to its shareholders. must end with grade 12.
The credit is equal to the amount of cash contributed up to the In the case of a preschool that offers services to students with
maximum amount allowed. For 2021, the maximum amount disabilities, a “student with disabilities” is a student who has
of credit that a taxpayer can establish for the current taxable any of the following conditions:
year is $611 for single taxpayers or heads of household. For • hearing impairment;
married taxpayers that file a joint return, the maximum credit • visual impairment;
that can be established for the current taxable year is $1,221. • developmental delay;
In most cases, for married taxpayers who file separate returns,
• preschool severe delay; or
each spouse may claim only one-half (½) of the credit that
would have been allowed on a joint return. • speech and/or language impairment.
NOTE: The maximum amount of credit established for the NOTE: The Arizona Department of Revenue is required to
current taxable year does not include any unused valid certify STOs. The department maintains a list of currently
carryover amount(s) from prior taxable years. Because this is certified STOs on its website at www.azdor.gov.
a nonrefundable credit, the total amount of available credit To qualify for the credit all cash contributions must be made
[current year plus any valid carryover amount(s)] that a to a certified STO. To determine if your cash contributions
taxpayer may use for the taxable year cannot be greater than made in 2021 and/or 2022, qualify for this credit, you should
the tax liability shown. verify that the STO you made a contribution to is certified.
A cash contribution for which a credit is claimed and that is For a list of STOs certified to receive cash contributions for
made on or before the fifteenth day of the fourth month the individual income tax credit, see the department’s website.
following the close of the taxable year may be applied to Your cash contribution to the STO will not qualify for the
either the current or preceding taxable year and is considered credit if you designate the contribution for the direct benefit of
to have been made on the last day of that taxable year. your dependent. For Arizona purposes, “dependent” has the

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                                                                                                          Arizona Form 323 
same  meaning provided in  section § 152 of the IRC.  For           • Column (a):  the date  you  made the contribution 
purpose of this credit, it does not matter if you qualify to take     (MM/DD/2021); 
the dependent deduction                                             • Column (b):  the name of the private STO; 
                                                                    •
NOTE:   Your  cash  contribution  will also not qualify if you        Column (c):  street address of the private STO; 
                                                                    •
designate a student beneficiary as a condition of your                Column (d):  location (city and state) of the private STO; 
contribution to the STO.  Also, the tax credit is not allowed if      and 
                                                                    •
you agree with another person to designate each  other’s              Column (e):  the amount of cash contributions made from 
contributions to the STO for the direct benefit of each other’s       January 1, 2021, through December 31, 2021. 
dependent, a practice commonly known as swapping.                   NOTE:   Do not  include those  cash  contributions that you 
                                                                    made from January 1, 2021, through April 15, 2021, for which 
You cannot claim both a tax credit and an itemized deduction 
                                                                    you or your spouse claimed a credit on the 2020 tax return. 
for the amount of contributions  made  to a  private  STO  for 
which you are claiming an Arizona tax credit.                       If  you  made cash contributions to more  than three  private 
                                                                    STOs, complete the Continuation Sheet on page 3, and include 
Before claiming this credit, make sure the STO issues you a 
                                                                    it with the credit form.
receipt for the contribution.  The receipt should show all of the                            
following:                                                          Line 4  
• name and address of the STO;                                      Enter the amount  from line 4h of the Continuation Sheet; 
• name of the taxpayer;                                             otherwise enter “0”. 
• amount paid;                                                      Line 5  
• date paid; and 
                                                                    Add lines 1 through 4, column (e) and enter the total. 
• the tax year for which you will claim the contribution. 
                                                                    B. Cash contributions made January 1, 2022 through 
Please keep this receipt  with  your tax records.   For more 
                                                                    April 18, 2022, for which you or your spouse are 
information on  school tax credits, see the  department’s 
                                                                    claiming a credit on the 2021 tax return 
publication, Pub 707, School Tax Credits.   
                                                                    NOTE:  If you are married and filing separate returns, be sure to 
NOTE: You may be able to make credit eligible contributions 
                                                                    include all cash contributions made by you and your spouse.  
to a  STO  through payroll withholding.  Check with your 
employer to see if your employer has agreed to withhold             Lines 6, 7, and 8  
contributions that qualify for this credit from your pay.           Enter the following for each private STO to which you made 
                                                                    contributions  from January 1,  2022  through  April 18, 2022, 
Line-by-Line Instructions                                           for which you are claiming a credit on your 2021 tax return: 
                                                                    • Column (a):  the date  you  made the contribution 
Enter your name and Social Security Number (SSN) as shown             (MM/DD/2022); 
on Arizona Forms 140, 140PY, 140NR, or 140X.                        • Column (b):  name of the private STO; 
All returns,  statements, and other documents filed  with the       • Column (c):  street address of the private STO; 
department require a taxpayer identification  number (TIN).         • Column (d):  location (city and state) of the private STO; 
The TIN for an individual is the taxpayer's SSN or an Internal        and 
Revenue Service (IRS) individual taxpayer identification            • Column  (e):  the  amount  of  contributions  made  from 
number (ITIN).  Taxpayers that fail to include their                  January 1, 2022 through April 18, 2022. 
identification number may be subject to a penalty.                  If  you  made cash contributions to more than three  private 
NOTE:  Complete Parts 1, 3, and 4, if you are claiming a new        STOs, complete the Continuation Sheet on page 3 of the form 
credit for the current tax year.                                    and include it with the credit form. 
If you are only claiming a carryover amount available from a        Line 9 
previous credit, complete Parts 2 and 3.                            Enter the amount  from  page 3,  line 9h,  of the  Continuation 
                                                                    Sheet; otherwise enter “0”. 
Part 1 - Current Year’s Credit 
                                                                    Line 10 
A.  Cash contributions made January 1, 2021 through 
                                                                    Add lines 6 through 9, column (e).  Enter the total. 
December 31, 2021  
                                                                    Line 11  
NOTE:  If you are married and filing separate returns, be sure      Add lines 5 and 10.  Enter the total. 
to include all cash contributions made by you and your spouse.  
                                                                    Line 12  
Lines 1, 2, and 3  
                                                                    Single taxpayers and taxpayers filing as  head of  household, 
Enter the following for each private STO to which you made          enter $611.  Married taxpayers enter $1,221. 
contributions from January 1, 2021, through December 31, 2021, 
and for which you are claiming a current year’s credit on your 
return. 
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Arizona Form 323
Line 13 - Current Year’s Credit Line 23
Enter the smaller of line 11 or line 12. If you are married Enter the total amount of contributions made during the
filing a separate return, but you could have filed a joint return, taxable year:
you may take only one-half (½) of the total credit that you and • Single taxpayers, heads of household and married
your spouse would have been allowed to take on a joint return, taxpayers filing a joint return; enter the total amount from
up to a maximum of $611 each. In this case, enter one-half Part 1, line 11.
(½) of the smaller of line 11 or line 12.
• Married taxpayers filing separate; enter one-half (½) of
NOTE: If you made contributions that total more than the the total amount from Part 1, line 11.
allowable current year’s credit on Form 323, you may claim a
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credit on Arizona Form 348 for some or all of the
contributions that exceed the maximum allowable amount. To Enter the maximum credit allowed on Form 323:
determine if you have excess contributions available to claim • Single taxpayers and heads of household; enter $611.
a credit on Form 348, complete Part 4 of Form 323. For • Married taxpayers filing joint; enter $1,221.
additional information see Form 348.
• Married taxpayers filing separate; enter $611.
Part 2 - Available Credit Carryover Line 25 – Excess Contributions:
Lines 14 through 19 Subtract line 24 from line 23. Enter the difference. If less
Complete lines 14 through 19 to figure your available credit than zero, enter “0”.
carryover from taxable years 2016 through 2020. Complete
If the amount on line 25 is more than zero, you have excess
lines 14 through 19 if you claimed this credit on a return for
contributions available and may claim a credit on Form 348
one of these years and the credit was more than your tax.
for those contributions.
NOTE: You may carry over only that portion of the credit If the amount on line 25 is “0,” you do not have any excess
that you do not apply to tax. You cannot carry over any contributions available to claim on Form 348.
amount that you gave that was more than the amount allowed EXAMPLE: During 2021, Mary, a single person, gave
as a credit. See the example at the end of these instructions. $1,400 to a private STO. For 2021, Mary is allowed a
• In column (b) enter the credit originally computed for maximum credit on Form 323 of $611. Mary’s 2021 tax
that taxable year listed in column (a). liability is $400. Mary may apply $400 of the $611 credit
• In column (c) enter the amount of the credit from that claimed on Form 323 against her 2021 tax liability. Mary may
taxable year which you have already used. carryover the unused credit of $211 to her 2022 income tax
• Subtract the amount in column (c) from column (b) and return. Mary may not claim a credit on Form 323 for the $789
enter the difference in column (d). gift that was more than the allowable credit ($1,400 minus
• Add the amounts entered on lines 14 through 18 in allowable credit of $611).
column (d). However, Mary may claim a credit on Arizona Form 348 for
Enter the total on line 19, column (d). the contribution made to the private STO that was more than
the $611 allowable credit. The credit Mary may claim on
Part 3 - Total Available Credit Form 348 cannot exceed the maximum credit allowed on that
Line 20 form.
Enter the amount from Part 1, line 13. Also, enter this amount To compute that credit, Mary must complete Form 348 in
on Form 301, Part 1, line 10, column (a). addition to Form 323. Mary must also complete Arizona
Form 301. For 2021, Mary would compute her available
Line 21
credit for Form 348 as follows.
Enter the amount from Part 2, line 19, column (d). Also, enter
this amount on Form 301, Part 1, line 10, column (b).
Line 22 2021 total contribution made to STOs $1,400
2021 maximum allowable credit claimed on Form 323 $ 611
Add line 20 and line 21. Enter the total. Also, enter this
Mary’s 2021 tax liability $ 400
amount on Form 301, Part 1, line 10, column (c).
Less: available tax credit - Form 323 $ 400
Part 4 - Do I Have Excess Contributions Available Balance of tax $ 0
to Claim on Arizona Form 348? Carryover available for 2021 from
Complete Part 4, lines 23 through 25, to determine if you have Form 323 ($611 minus $400) $ 211
excess contributions available to claim a credit on Arizona Contribution available to calculate the allowable
Form 348, Contributions to Certified School Tuition credit on Form 348 ($1,400 minus $611). Mary must
complete Arizona Form 348 to figure that credit.
Organization – Individuals. $ 789

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