Arizona Qualifying Charitable Organization (QCO) Tax Credit Explained
What Is the QCO Tax Credit?
The Arizona Charitable Tax Credit lets people who donate to approved Qualifying Charitable Organizations (QCOs) lower the amount of state income tax they owe. This is a dollar-for-dollar credit, which means if you donate a certain amount, your tax bill is lowered by that same amount, up to the limits set by Arizona.
Your donation must be money, and it must go to a nonprofit that the Arizona Department of Revenue has officially approved as a QCO.
This is different from a tax deduction. A deduction lowers the income used to figure out your taxes. A credit lowers the actual amount of tax you owe. For example, a $500 tax credit takes $500 off your tax bill.
Who Can Claim It?
Only individual taxpayers can claim the QCO tax credit. Businesses cannot claim this credit.
How to Claim the Credit
- Donate to a certified QCO and save your receipt.
- When you file your Arizona taxes, fill out Form 321 (Credit for Contributions to Qualifying Charitable Organizations).
- Also include Form 301 (Nonrefundable Individual Tax Credits and Recapture).
- Make sure to enter the QCO’s code so the state can confirm it is approved.
Donation Timing and Tax Years
Arizona lets people count some donations for either the current tax year or the previous one. Here is how it works:
Donations made between January 1 and April 15, 2026 can be used on either your 2025 or 2026 Arizona tax return. The year you choose will decide which year’s credit limits apply.
If you want to use the higher 2026 limits for donations made in early 2026, you must claim them on your 2026 tax return, which you file in 2027.
Maximum Credit Amounts
Credit limits change each year for inflation.
For the 2025 tax year:
- Single, married filing separately, or head of household: up to $495
- Married filing jointly: up to $987
For the 2026 tax year:
- Single, married filing separately, or head of household: up to $506
- Married filing jointly: up to $1,009
Important Notes
- You do not need to itemize deductions on your federal taxes to claim this credit.
- This credit is separate from school tax credits or foster care (QFCO) credits.
- The credit is nonrefundable. It can lower your Arizona tax to zero, but it will not give you money back if the credit is higher than the tax you owe.
