QFCO Tax Credit Donations
(For those that are more visual learners, scroll to the bottom to view a short video explaining how the tax credits work. The video follows the text below.)
One by One Foster & Kinship Solutions is a Qualified Foster Care Organization (QFCO) and we are eligible to receive Arizona QFCO tax credit donations!
Arizona’s amazing tax credit program allows individual taxpayers to make contributions to qualified organizations and then claim them on their personal tax returns as a dollar for dollar credit. As a Qualified Foster Care Organization (or QFCO), One by One Foster & Kinship Solutions is qualified to receive Arizona QFCO tax credit contributions from taxpayers like you.
HERE’S HOW IT WORKS: if you are an Arizona resident who pays Arizona state taxes, you can make a donation to our to our nonprofit as payment toward your taxes, thus reducing your tax liability you still owe the state, OR you can REDIRECT the taxes that were withheld from your paychecks by making a donation to a QFCO, and getting that amount that you already paid to the state returned to you in the form of a refund.
When you file your taxes, you will either owe less or nothing to the state and tell them where you sent your payment, or you will tell the state that you donated a certain amount to a QFCO and get that amount credited back as a refund.
How much can you redirect? Any amount up to your total tax liability and the limits of the tax credits. The 2023 limits for QFCO donations are $526 filing single, or $1051 married filing jointly.
What a Win-Win!
Better yet! Arizona allows you to give a donation up until April 15th 2024 to count for your 2023 tax filing. Which means you can wait until right before you file your taxes, and receive the money back, if applicable, with your tax return.
Let’s look at 3 examples and we will round our numbers make it easier:
EXAMPLE 1: Anthony is self-employed. He prefers to pay the estimated amount of his approximately $1000 annual state tax liability in installments of $250 each quarter. He used to send the full payments directly to the state until he learned about the QFCO tax credit program. Now he gives a $125 quarterly donation to One by One Foster & Kinship Solutions and sends the remaining $125 to the state. When he files his taxes, he claims the $500 in donations he already made to One by One Foster & Kinship Solutions, as credits against his total liability.
EXAMPLE 2: Anita & Victor are married. They are filing a joint tax return. In 2022, their employers deducted small amounts from each paycheck to a total sum of $1500 in state tax withholdings for the year. Their tax liability was $1000 which means they overpaid by $500. They are owed a refund of $500 AND they choose to redirect $1000 of liability they already paid through paycheck withholdings by making a direct donation to One by One Foster & Kinship Solutions. Then they file their taxes. Their state tax return would now be $1500, which is the original $500 from overpayment on their withholdings, and the $1000 that they redirected by making a donation to One by One Foster & Kinship Solutions.
EXAMPLE 3: In 2022 Jessie paid $1500 in state taxes through paycheck withholdings. But Jessie’s actual state tax liability at the end of the year turns out to be $1700, which means she still owes $200. She chooses to make a direct donation of $500 to One by One Foster & Kinship Solutions. This reduces the amount she owes the state to $0 PLUS she redirected $300 of the withholdings to One by One Foster & Kinship Solutions. She files her taxes, showing the new donation, and is now owed a $300 refund.
Now that you better understand how tax credits work, we invite you to consider choosing One by One Foster & Kinship Solutions as your QFCO organization, knowing that your donations each year will help us fulfill our mission.
Why choose us? One by One Foster & Kinship Solutions is an organization that is actively making a difference in the lives of foster and kinship children. We provide family-centered events and wellness programs, while taking a stand that children everywhere experience being wanted, known, & LOVED! Our future plans include building medical wellness centers for foster children to get the comprehensive care they need with a focus on healing the traumas they have experienced. Your generous contribution will support us as we help foster and kinship children and their families receive the love and support needed to truly thrive.
NOTE ON MULTIPLE KINDS OF CREDITS: Qualified Foster Care Organization (QFCO) tax credit limits are INDEPENDENT of Qualified Charitable Organization (QCO) tax credits and Public School Tax Credits. EXAMPLE: You are married filing jointly and you paid $2500 in Arizona State taxes in 2023. Your tax liability is $3000, which means you still owe $500. You donate $1,000 to a QFCO AND $800 to a QCO AND $400 to eligible schools for $2200 in total tax credits donated which is $1700 more than you owed but still within your total state tax liability and the limits of the individual credits. You have reduced the $500 balance you owed to the state to $0 and donated an extra $1700 of redirected funds that will be returned to you in a tax return.
Disclaimer: These are examples only. If you have any questions, please consult a tax professional. You can also visit the Arizona Department of Revenue website at www.azdor.gov for more information about QFCOs and to find the extra 1 page tax form needed for your filing.
One by One Foster & Kinship Solutions is a 501(c)3 Nonprofit Organization. Our EIN is 87-1335745 and our QFCO Code is 11077.