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Withholdings Program

Withholdings Program

Arizona Employers Can Make a Difference

Help your employees change lives without affecting their take home pay!

Arizona’s withholding tax reduction law A.R.S. 43-401 gives employers the opportunity to allow employees to redirect their state withholdings tax to create private school tuition scholarships for children in our community.

Arizona has simplified and streamlined the reporting requirements for companies who offer payroll withholdings for charitable contributions to their employees. Every company's payroll operation is different. Whether you have outsourced your payroll to another company, or have your own payroll department, we can help set up and manage this process. Our online system will track and provide all program reporting for you.

Annual Donation Limits

While there is no set maximum a corporation can donate and receive a dollar-for-dollar state tax credit, the ADOR does set a maximum donation amount for individual donors each year. Provided your employees stay within these maximums, 100% of their contributions can be taken as a dollar-for-dollar state tax credit against their Arizona state tax liability. Below are the 2021 state set maximums.

Tax Credit Donation Amounts for 2021

Tuition Tax Credits Original Credit
Maximum
Switcher Credit
Maximum
Tuition Credits
Maximum
Married Jointly $1,221 $1,214 $2,435
Individual $611 $608 $1,219

A Valuable Benefit You Can Provide Your Employees and Community

Allowing your employees to enroll in this program means they can give to APSTO throughout the year via payroll withholdings. As a result, your employees can participate without affecting their take home pay. Scholarships generated from these contributions will provide much needed assistance for children in our community attending private school.

PROGRAM DETAILS:

For the Employee

Employee submits a completed Arizona Form A-4C (Request for Reduced Withholdings) to your payroll representative and a Withholdings Enrollment Form to APSTO.

Note: If the employee does not have enough current withholdings for their requested APSTO tax credit amount, the employee can increase withholdings by executing a new Arizona Form A-4. However, the employee's donation amount should not exceed their anticipated state tax liability or the annual maximum set by the ADOR.

Employee Forms

For the Employer

  • Employer will adjust payroll withholding based on the information from the Arizona Form A-4C as filled out by the employee, and the employee's Arizona withholding election (Arizona Form A-4), if necessary.
  • Employer submits the funds collected through the employee's charity withholdings to APSTO, along with a Withholdings Report. An employer can use the Arizona Form A1-QTC, their own substitute version, or simply submit it online through our Employer Portal. This form does not get submitted to the ADOR; it is strictly for internal reporting and receipting purposes.

Note: As an employer, you may send in the withheld donation amounts as often as you like, but they must be sent in at least quarterly per the withholding law.

Employer Forms (Optional)

For APSTO

  • For receipting purposes, APSTO must use the date an electronic transfer is received or the postmark date of mailed withholding checks as the date of the employee's donation.
  • APSTO's comprehensive system tracks and provides a YTD Withholding Report. As an employer you can log into your Employer Portal anytime to view or print this report.
  • APSTO provides a comprehensive year-end receipt in January to each of your participating employees for the previous donation amounts in the prior year. Your employees will use this to claim their tax credit.

Partner With Us

APSTO provides tuition scholarships to children (grades K-12) with disabilities (physical, learning, and emotional), children who have been in, or are in the foster care system, underserved children in low-income families, and families who need or want tuition support. Please consider partnering with us in this most worthwhile program. You will not only be providing a valuable benefit to your employees but a priceless service to your community.

If this is a benefit you would like to provide, please click below to register. If you're already a partner, login here.

Questions? Call 480-256-1001 or email info@APSTO.org

While APSTO deals with the Arizona Private School Tuition Tax Credit Program every day, we are not tax advisors. This is intended to help guide you but not intended to replace official tax advice. if you have questions regarding your tax situation, it is always best to consult with a tax professional.