Certification for QCOs and QFCOs
Qualifying Charitable Organizations (QCOs) and Qualifying Foster Care Charitable Organizations (QFCOs) are certified by the Arizona Department of Revenue to receive contributions eligible for the tax credit. This certification only pertains to the Arizona tax credit program. This program does not apply to general licensing, operations, or the deductibility of donations to charitable organizations. To become a QCO or QFCO, a charitable organization must complete the application form and submit it along with required documentation to ADOR. See the application instructions for details.
If your organization meets the qualifications, ADOR will then send a certificate to the primary point of contact for the charitable organization as indicated on the application form. Because ADOR may need to contact the organization for a variety of purposes over time, it is critical that organizations provide updated primary point of contact information to ADOR if and when changes are made.
Charitable organizations may apply for certification at any time during the year. Certification is valid beginning January 1 of the year that an organization is approved. Applications will generally require two to four weeks for processing. ADOR may periodically request organizations to recertify their status, and will request specific information necessary to remain certified. If a QCO wishes to be considered a QFCO, a new application would be necessary.
QCOs and QFCOs are periodically recertified to verify that they continue to meet legal requirements. Qualifying organizations do not need to recertify annually. Each year, approximately 15-20% of the organizations are required to be recertified. Requests for recertification are sent to organizations and apply to the next calendar year. Recertification does not have a specific due date; however, donations made to the requested organizations after January 1 will not be eligible for the tax credit until those organizations have been recertified.
Certification of Qualifying Charitable Organizations
To become a QCO, a charitable organization must complete the QCO Application Form and submit it along with required documentation to ADOR. To qualify, a QCO must meet ALL of the following provisions:
- Is exempt from federal income taxes under Section 501(c)(3), or is a designated community action agency that receives community services block grant program monies pursuant to 42 United States Code Section 9901.
- Provides services that meet immediate basic needs.
- Serves Arizona residents who receive temporary assistance for needy families (TANF) benefits, are low income residents whose household income is less than 150 percent of the federal poverty level, or are chronically ill or physically disabled individuals.
- Spends at least 50% of its budget on qualified services to qualified Arizona residents.
- Affirms that it will continue spending at least 50% of its budget on qualified services to qualified Arizona residents.
Certification of Qualifying Foster Care Charitable Organizations
To become a QFCO, a charitable organization must complete the QFCO Application Form and submit it along with required documentation to ADOR. To qualify, a QFCO must meet ALL of the following provisions:
- Is exempt from federal income taxes under Section 501(c)(3) or is a designated community action agency that receives community services block grant program monies pursuant to 42 United States Code Section 9901.
- Provide services that meet immediate basic needs.
- Serves Arizona residents who receive temporary assistance for needy families (TANF) benefits, are low income residents whose household income is less than 150% of the federal poverty level, or are chronically ill or physically disabled individuals.
- Spends at least 50% of its budget on qualified services to qualified Arizona residents.
- Affirm that it will continue spending at least 50% of its budget on qualified services to qualified Arizona residents.
- Providing ongoing services to at least 200 qualified individuals in the foster care system.
- Spending at least 50% of its budget on ongoing services to qualified individuals in the foster care system.
How to Determine if a Charity is Eligible:
Which services qualify for the program?
Qualifying services include cash assistance, medical care, child care, food, clothing, shelter, job placement and job training services or any other assistance that is reasonably necessary to meet immediate basic needs and that is provided and used in this state.
What qualifies as low income?
2018 Poverty Guidelines for the 48 Contiguous States and the District of Columbia
| Persons in Family | Annual Income Poverty Guideline | |
|---|---|---|
| 100% of Poverty Guidelines | 150% of Poverty Guidelines | |
| 1 | $12,140 | $18,210 |
| 2 | $16,460 | $24,690 |
| 3 | $20,780 | $31,170 |
| 4 | $25,100 | $37,650 |
| 5 | $29,420 | $44,130 |
| 6 | $33,740 | $50,610 |
| 7 | $38,060 | $57,090 |
| 8 | $42,380 | $63,570 |
|
For families / households |
add $4,320 for each additional person | add $6,480 for each additional person |
Source: Federal Register, Vol. 83, No. 12, January 18, 2018, pp. 2642-2644
Who are chronically ill or physically disabled individuals?
Chronically ill or physically disabled individuals are individuals and whose primary diagnosis is a severe physical condition that may require ongoing, medical or surgical intervention.
Who are qualifying individuals in the foster care system?
Qualifying individuals are foster children (children placed in a foster home or child welfare agency) or a people who are under twenty-one years of age and participating in a transitional independent living program.
A Transitional Independent Living Program provides care and services that complement the person's own efforts to achieve self-sufficiency and to accept personal responsibility for preparing for and making the transition to adulthood.
Who can I contact with questions concerning certification?
QCO/QFCO Program Manager
Arizona Department of Revenue, OERA
P.O. Box 29099
Phoenix, AZ 85038
Email: [email protected]
Phone number: (602) 716-6372 ext. 2
Fax: 602-716-7991