Corporate FAQ

Corporate FAQ

Arizona law allows a dollar-for-dollar state income tax credit for “C” & “S” corporations and insurance companies that pay a premium tax for contributions to the Brophy Community Foundation, an Arizona Department of Revenue (ADOR) certified school tuition organization. These donations give students, with a verified financial need, tuition assistance so they can afford a K-12 private school education at an Arizona qualified school.

The annual corporate tax credit donation cap has been permanently fixed at $135M.

No. The taxpayer may donate stock to the Brophy Community Foundation but the donation is not eligible for the tax credit since it is not considered a cash donation.

There is a minimum aggregate contribution of $5000 for “S” corporations only.

Yes and no. There is a limit to how much corporations can donate in total each fiscal year for a tax credit. However, one corporation could donate the entire tax credit amount available.

Brophy Community Foundation (BCF) handles all the paperwork required by the Arizona Department of Revenue (ADOR}.

  1. Contact Dawn Kennedy at 602-264-5291 x6500 or dkennedy@brophyprep.org to initiate the process before July 1st as the cap is reached quickly.
  2. The application for approval must be submitted by Brophy Community Foundation to the ADOR.
  3. If the program cap has not been met, ADOR approves the request within 20 days and notifies Brophy Community Foundation.
  4. Brophy Community Foundation will immediately notify corporate donor of approval.
  5. The corporation has 20 days from the date of approval by ADOR to make the contribution payable to Brophy Community Foundation.
  6. The corporation takes the tax credit on its tax return, but may carry any unused credit forward for up to five consecutive years after the contribution was made.
  7. To claim the credit, the corporation lists the credit on the standard 120 form, and files a 335 form attached to the return. The corporation may take either the federal deduction or the Arizona state credit, but not both.

Brophy Community Foundation contracts with an independent service, FACTS, that processes and reviews all financial aid applications, including tax returns and W-2s, and calculates financial need of each family. Awards are based on verified financial need and distributed to students attending Brophy College Prep, Loyola Academy and 37 other schools statewide.

Qualified school means a preschool that offers services to students with disabilities, nongovernmental primary or secondary school that is located in Arizona and that does not discriminate based on race, color, disability, familial status or national origin. All teaching staff and personnel that have unsupervised contact with students are required to be fingerprinted. Qualified school does not include a charter school or any program operated by a charter school.

A school tuition organization is a charitable 501(c)(3) organization that must:

  1. allocate at least 90% of its annual contributions to scholarships;
  2. not limit the availability of scholarships to students of one school;
  3. allow ADOR to verify that the scholarships issued are awarded to students attending a qualified school;
  4. not knowingly collude with any other STO to circumvent the limits of the low-income corporate scholarship;
  5. include on the organization’s website, if one exists, the percentage and total dollar amount of educational scholarships and tuition grants awarded during the previous fiscal year to (a) students whose family income is up to 185% of poverty level and (b) students whose family income is greater than 185% of poverty level but not more than 342.25% of poverty level;
  6. not award scholarships to students who are simultaneously enrolled in a district school or charter school and a qualified school; and
  7. follow all other statutory requirements in A.R.S. § 43-1183 or Title 43, Chapter 15.

Brophy Community Foundation contracts with an independent service, FACTS, that processes and reviews all financial aid applications, including tax returns and W-2s, and calculates financial need of each family. Awards are based on verified financial need and distributed to students attending Brophy College Prep, Loyola Academy and 37 other schools statewide.