Frequent Questions

These are some of the most frequently asked questions about ACSTO and how the tax credits work.
The following questions are divided into 3 categories: For Donors, For Parents, and For Schools.

Was your question not answered here? Please contact us with any questions that may remain unanswered, and we will get back to you as soon as possible! You can also print or download our Frequently Asked Questions Brochure on our Literature page.

For Donors

How Can I Donate?

By Check: To donate by check, fill out a donor card, and mail it with your check to ACSTO.

By Credit Card: You can donate online, via our secure website, by phone at 480.820.0403, or by filling out a donor card with your credit card information and mailing or faxing it to ACSTO.

How Much Can I Donate?

For 2014, you can donate up to $2106 as a married couple filing jointly, $1053 as a single filer, or your AZ income tax liability, whichever is less.

  • Married: $1056 (Original) + $1050 (Overflow/PLUS) = $2106
  • Single: $528 (Original) + $525 (Overflow/PLUS) = $1053

The maximum tax credit amount will increase each year by the percentage that the Metropolitan Phoenix Consumer Price Index (CPI) has increased for the preceding year, meaning that the amounts will change slightly every year (though the Original and Overflow will never be the same amount, there will always be a slight difference).

You must first donate the maximum for the Original tax credit before anything can count toward the Overflow/PLUS tax credit.

If you have no Arizona income tax liability, you cannot receive a credit.

See How Much Can I Donate? on our blog.

When Can I Donate?

You may donate at any time.  However, we encourage you to be familiar with our timeline in case you wish for your donation to be received before one of our three award cycles.  Try to send them in by the application deadlines, though we always process as many donations as possible before each award cycle.

For donations made between January 1 and April 15, it is up to the donor to determine whether to claim the tax credit for the previous or current year.  If so, you must donate prior to filing taxes, but no later than April 15 in order to claim the credit for the previous tax year.  Donations must be postmarked or entered online before midnight, April 15.  There are no extensions allowed per tax law.

Will I Receive A Receipt?

ACSTO mails receipts weekly, except for donations made in December and early January.  A comprehensive receipt statement for the year will be sent by January 31 of the following year.  If you need a copy of your receipt, please contact ACSTO.

Even if you intend to claim your donation for the prior year because of the April 15 relate-back, your receipt will reflect the actual date on which you made the donation.  You need that donation date to properly fill out Form 323 (and/or Form 348).

Do I Get a Refund?

Depending on how much you pre-paid the state in taxes throughout the year, and whatever other credits and deductions are involved, one of several things happen when you file your state taxes after donating:

1) What you owe is reduced, and you pay the difference to the state,

2) You overpay/double-pay on your taxes, and get a refund from the state in the amount that you overpaid,

                       - OR -

3) you donate in excess of your liability, you receive a credit/refund up to that liability, and the remaining credit can be carried forward and used to offset state income taxes for up to five years.  Instructions on Forms 323, 301, and/or 348 are used to track any carryover.

A credit is not the same as a refund, though it could result in a refund.  A credit offsets what you owe the state dollar-for-dollar, but the credit is limited to your liability or the stated maximum, whichever is less.  A refund will be based on what you overpaid to the state beyond your liability.  

The only portion that you cannot receive either a credit and/or a refund is the portion of a donation that exceeds your liability.  That excess, up to the maximums for that year, is what can be claimed as a carryover in future tax years.  Visit our Claiming the Credit page for a more detailed explanation.

Is Our Donation Eligible For A Federal Deduction?

We are a federally tax exempt 501(c)(3) charitable organization.  For federal tax purposes, any deduction must be claimed for the tax year in which the donation was made; the April 15 deadline does not apply.  You should consult your tax adviser for specific tax advice concerning deductibility for you.

How Much of My Donation Is Awarded As A Scholarship?

Arizona law requires that 90% of donated funds are awarded as scholarships.   ACSTO is privileged with the ability to award 92% of donations received naming a school or recommending a student, and uses the balance for administrative and operating costs.

What Is The Public School Tax Credit?

You may make an additional $400/$200 donation as married/single taxpayers toward public school extracurricular activities, and claim it as a tax credit, but public school donations are made directly to the public school, not to ACSTO.  Public school tax credit donations are due by December 31.

How Do I Report A Donation On My Taxes?

Donations to ACSTO for the Original tax credit are filed using Arizona Form 323.  

Donations made for the Overflow/PLUS tax credit are filed using Arizona Form 348.

Depending on your situation (i.e.: donating to more than one tax credit) you will also need Form 301.  All forms are available in the Claiming the Credit page on our website, or from the Arizona Department of Revenue (ADOR) at www.azdor.gov.

We update the Arizona tax forms on our website once they become available from the ADOR.

May I Make A Recommendation?

You may recommend anyone who is not your child or dependent.  However, the selection committees retain complete discretion regarding all awards.  Think of your recommendation as an endorsement for that child.  

There are no designations and no guarantees allowed by law.

Does A Recommendation Guarantee A Scholarship?

No, the ACSTO selection committees must retain complete discretion regarding all awards.  There are no designations and no guarantees per Arizona tax law.  

No goods or services (or guarantees) are allowed in return for a charitable contribution.

Can Parents Donate To Each Other's Children?

No.  Whether intentional or not, this is called swapping.  The law states, "A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer's own dependent."  ACSTO has always discouraged this practice; the law specifically states this prohibition.

Can I Identify A Particular School?

Yes, donations identifying a school will be awarded among applicants from that school by our selection committees.  Here is our current list of schools.

We can only consider awards for students who are currently enrolled (or in the enrollment process) at one of the private Christian schools that have partnered with us, and have also  completed an ACSTO scholarship application for this school year.

Why Should I Donate To ACSTO?

ACSTO has been operating since 1998, helping more than 20,600 students with more than $100 million in scholarships.  We strive to be a leader in serving students in more than 140 schools throughout Arizona.  We actively participate in defending the tuition tax credit law in litigation (in 2011, ACSTO prevailed in the US Supreme Court in ACSTO v. Winn), are active through the STO association in legislative efforts, and support the expansion of school choice nationwide.

ACSTO's sole purpose is the implementation of the individual tuition tax credit laws, therefore we have a thorough understanding of how it works, and all of our operations are designed to uphold the law's integrity and help schools, parents, and donors every step of the way.

If you'd like further details, you can learn more About Us or read about Our Mission.

What Is My Donation Used For?

ACSTO is a certified School Tuition Organization (STO), authorized by the Arizona Department of Revenue (ADOR) and the individual tuition tax credit laws to award your tax credit donations as scholarships to help students pay for tuition at private K-12 schools.  

There are two types of scholarships that ACSTO awards, depending on which tax credit your donation(s) fall under:

1) The Original tax credit law ARS 43-1089 that ACSTO has operated with since 1998. This is the first $1034/$517 that you donate each year.

2) The Overflow/PLUS tax credit law ARS 43-1089.03 that took effect in August 2012.  Any donation amounts that are above and beyond the Original $1034/$517, up to another $1028/$514, falls under this award.

Also see "How much of my donation is awarded as a scholarship?" and the Scholarship Opportunities page.

How Do I Donate For This New Overflow/PLUS Tax Credit?

You can donate to the Overflow/PLUS tax credit using the same donation process as the Original tax credit.  However, in order to donate the additional amount, the Arizona taxpayer must first donate the maximum to the Original tuition tax credit in the same taxable year.  Anything donated above the $1034/$517 (2013 amounts) maximum overflows into the new tax credit, up to another $1028/$514.  This amount will also increase yearly (and will never be the same amount as the Original).

This does effectively increase the maximum a taxpayer can donate.  For 2013, the total tax credit available is $2062/$1031, or the actual tax, whichever is less.

What If I Donate Too Much?

It depends on what limit we are talking about:

If you donate in excess of your Arizona income tax liability, but still less than or equal to the maximum allowed, you can carry the excess forward and claim it as a tax credit on another year's taxes, as long as it is within five consecutive years.

For any donation amount that is in excess of the maximums allowed by law, for 2013 it is $2,062 for married couples and $1,031 for single taxpayers, you are not able to claim it as a credit at any time.  It is a charitable donation, however, and is eligible to be claimed as a Federal deduction (you are not allowed to claim a state tax credit and a state deduction for the same donation amount).

Our Claiming the Credit page has a more detailed description.

Why Do I Have To Donate To ACSTO Instead Of The School?

The tax credit law is designed to help students attend the school of their choice, not to benefit a particular private school, especially a religious school. This difference was vital for the law to survive the challenge by those who did not want to see dollars that would otherwise have been paid in taxes benefit a religious organization. The Arizona Supreme Court recognized that education of children, in either private or public schools, is beneficial for the common good and that it is reasonable for parents to exercise choices that are in the interests of their children.

Therefore, the law instituted the use of organizations that are separate from the schools, called school tuition organizations (STOs), in accepting these donations and making awards to students at more than one private school.

Who Can I Recommend For the Overflow/PLUS Tax Credit?

You may make recommendations with your Overflow/PLUS donation, just like the Original, however, only certain eligible students are able to be considered for Overflow/PLUS awards.

In order to be eligible, students must fall under one of four categories:

1)  Student is a switcher from public to private school (after attendance of at least 90 days or a full semester at the public school);

2)  Student is entering or is currently in Kindergarten (Pre-K students with disabilities also qualify);

3) Student is a dependent of a member of the United States Armed Forces stationed in AZ pursuant to military orders;

4) Student previously received Overflow/PLUS or a Corporate low-income or disability scholarship and continued in private school ever since.

Please note: ACSTO has never awarded corporate scholarships; scholarships from the Original tax credit do not count.

Arizona Has So Many Tax Credits! What Are They?

The best place to gather information about all the different types of individual tax credits that are available in Arizona is from the source, the Arizona Department of Revenue. Their website is azdor.gov.

More specifically, go to the menu on the left and click on the Tax Credits option. It will display more menu options: you will want to click on the 'Qualifying Charitable Organizations' option for the Working Poor and Foster Care tax credits, and the 'School Tax Credits for Individuals' option for the public and private school tax credits. 

You can combine any of those different tax credits on top of each other to receive more of a tax credit on your Arizona income taxes, so long as you have that much liability to claim.

For 2013, it seems that a married couple filing jointly can claim upwards to $3,262 in dollar-for-dollar tax credits for donations to qualifying sources. That is amazing! Just remember that ACSTO only deals with the private school tax credits. We cannot accept donations for any other type of tax credit!

Why Did Arizona Reject My Donation?

Taxes aren't easy and sometimes you'll encounter a hick-up on what you claimed. If your donation was rejected by the state of Arizona, and they're asking you to cough up some money, it probably means that you filed something incorrectly. This usually means that you will have to file an amended tax return. Here is a short list of common mistakes when claiming the tax credit. Hopefully it will help you and your financial adviser diagnose what went wrong and how to fix it.

  • Did you submit your taxes before actually making the donation? 
    You must donate prior to filing.
  • Did you use a short form (140 A) or 140 EZ?
    You must use one of the longer forms (140,  140NR, or 140PY).
  • Did you forget to claim the donation on your tax returns?
    You must use the appropriate forms (323, and/or 328 & 301), and then include the totals on your AZ 140.

For Parents

Can Parents Donate To Each Other's Children?

No.  Whether intentional or not, this is called swapping.  The law states, "A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer's own dependent."  ACSTO has always discouraged this practice; the law specifically states this prohibition.

May A Student Receive Funds From More Than One STO?

Yes, nothing would prevent that.  

The only limitation is that schools can only accept scholarships that total up to student's tuition that is due for that school year.  Any overage must be sent back to the organization that made the award as a 'multi-year scholarship' to be used for tuition expenses for the next school year.

Do We Award To Families?

Scholarship awards are only given to individual students.  There are no family accounts.  These awards are non-transferable, even within the same family.

When you are encouraging donors to recommend your children, we recommend that they put all your children's names down (eg: John and/or Jane Smith), and we will split the recommendation evenly between them.

How Do I Apply For A Scholarship?

1. Complete our scholarship application

  1. You can call us at 480-820-0403 for us to mail you a copy.
  2. You can apply online.  
  3. You can download the application.

Only one application is required to be current for the entire award/school year, but a separate application is required for each student you wish to be considered for an award.

2. Make sure you have begun the enrollment process with your school.

If your child is not currently attending the school named on the application, or has not begun the enrollment process, ACSTO cannot make an award.

What Is The Application?

A current application is required for every student who wants to be considered for an award.  Submitting an application with ACSTO is free.  A current application is not a guarantee of a scholarship, but all students with a current application will at least be considered for available funds.

A complete application means that you will be considered for money that is available during that award year.  If you do not receive an award it is not because you were rejected or not approved, it is simply either because we did not have a complete application or there was not enough money available.

There are three pages of the application, all are required for it to be complete:

1) Student info and contact info

2) Narrative

3) Financial Information (tax forms NOT required)

All STO's are required to secure financial information as a part of the award process.  It is held in the strictest confidence.

Do I Need An Application If My Child Was Recommended For An Award?

YES.  A student must have a current and complete application (and must be considered enrolled at the school) in order to be considered for any awards.  A recommendation does not guarantee a scholarship.

Why Can't We Know Who Donated For My Child or How Much?

Federal charitable contribution laws expect donor confidentiality.  It is a professional standard to keep people's financial information secure.  Many donors wish to be kept anonymous unless they voluntarily disclose their identities to the benefiting party. 

We do not disclose dollar amounts for recommendations because there are no guarantees for a scholarship.  ACSTO and Tax Credit law discourages any expectation of entitlement to scholarships that are not yet awarded.

What Are The Application Deadlines?

We have 3 scholarship distributions per award/school year.  Only one application is required for the entire award year (please do not send multiple copies of your application):

Summer:   This is the first distribution of the school year.  Applications are due by May 31.  Try to have donations in by the application deadline, but we always process as many donations as possible for each award cycle.

Fall:   Applications are due by September 30.  Try to have donations in by the application deadline, but we always process as many donations as possible for each award cycle.  Keep in mind that this is our smallest award cycle, as most people wait to donate until the end/beginning of the year. This deadline only applies to those who have not yet sent in an application this school year.

Spring:   This is the last distribution of the award year.  Applications are due by February 28Try to have donations in by the application deadline, but we always process as many donations as possible for each award cycle. This deadline only applies to those who have not yet sent in an application this school year.

The Spring award cycle is unique in that awards may be used for the current OR the upcoming school year. If applying for the upcoming school year, simply use the current scholarship application available.

At the end of every award year, after the Spring distribution, all applications expire, regardless of when they were received (the only exception is for those who sent in applications in the Spring for children entering Kindergarten in the Fall).  New applications are available for the new award year by April 15.

What Factors Are Considered When Making Scholarship Awards?

The selection committee considers three factors when making award decisions:

1) the financial circumstances of the student's family;

2) the narrative provided by the parents;

3) recommendations concerning the student;

We cannot speculate as to how the committees will make their decisions.  Every award cycle is unique.  No one factor can guarantee a scholarship.

What Happens If My Child Receives An Award But Transfers To Another School?

Since each award is student specific, the unused portion follows the student to the new school as long as it is a private Christian school in Arizona that works with ACSTO. Otherwise, the remaining money would subsequently be awarded among other students at the school.

Are There Different Types Of Scholarships?

ACSTO facilitates two types of scholarships, which are funded by two different individual tax credits:

1)  The Original tax credit law ARS 43-1089 that ACSTO has operated with for the past 15 years.

2)  The Overflow/PLUS (switcher) tax credit law ARS 43-1089.03 that began in August 2012.  See "How do I apply for an Overflow/PLUS scholarship?" for more information.

There are no set award amounts for either. Visit our Scholarship Opportunities page for more detailed information.

How Do I Apply For An Overflow/PLUS Scholarship?

In order to be considered for these funds, students must first meet certain eligibility requirements.

Fill out our scholarship application as normal, then include any additional required information specific to Overflow/PLUS eligibility (as indicated on the application).

In order to be eligible, students must fall under one of the following categories:

1)  Student is a switcher from a public/charter to a private school (after attendance of at least 90 days or a full semester at the public school);

2)  Student is entering or is currently in Kindergarten;

3)  Pre-K students with disabilities (at a school that offers services specifically for the disability);

4)  Student is a dependent of a member of the United States Armed Forces stationed in AZ pursuant to military orders;

5)  Student previously received an Overflow/PLUS, Corporate low-income, OR Corporate disabled/displaced scholarship, and continued in private school ever since (ACSTO does not award corporate scholarships; scholarships from the Original tax credit do not count).

Please review our Scholarship Opportunities page for more details.

What Happens When A Student Receives An Award But Parents Already Paid?

If parents already paid for their child's tuition, and then receives a scholarship award, one of two things could happen:

1) the remaining portion is sent back to ACSTO as a multi-year scholarship to be used for future tuition expense;

2) the school can reimburse the parents and use the scholarship award to pay for the tuition expense instead. It is up to the school to set the policy on whether to reimburse or not.

Can I Bank Money For My Child?

State regulations do not allow us to 'bank' money for children who are too young to qualify (i.e.: not in Kindergarten yet).

The earliest you can start raising donations for your child is one year prior to attendance at a private school. Anything received earlier than that will be awarded to other children at that school. 

The intention of the law is for scholarships to only be awarded to students who are currently enrolled in a private school, or, at the very least, students who have begun the enrollment process at that school for grades K-12. 

 

 

Does ACSTO work with Catholic schools?

While we are the Arizona CHRISTIAN School Tuition Organization, we don't actually have any Catholic schools on our list of partner schools. This is because we enjoy a good relationship with the Catholic tuition organizations and don't wish to compete for their supporters. They have their niche with Catholic schools, and our niche is generally with schools from a Protestant / Evangelical standpoint. 

 

For Schools

What Can Scholarships Be Used For?

Any scholarships awarded by ACSTO may only be used for K-12 private school tuition for the student named on the award.

Tuition is determined by the school and generally constitutes what the school charges for every child in the student body. Charges that are unique to specific children are generally not considered to be tuition.

Any scholarships awarded may not  be used for the following:

  • Pre-K classes or programs.  This includes any kind of program that is before Kindergarten.  Kindergarten is defined as the grade that prepares students for 1st grade in the following year.  If the program does not intend for students to graduate to 1st grade in the next year, it is not kindergarten (there is an exception for pre-K students with disabilities, please contact us for more info).
  • Non-Refundable Payments of any kind, whether for registration fees, tuition due, or other fees. If any payment is non-refundable, that portion is not eligible for a scholarship.
  • Children attending both a public and a private school at the same time
  • Charter schools or schools operated by a charter school
  • Homeschooling

Can We Determine Who Gets Donations Recommending Our School?

No, scholarship awards can only be awarded by the STO.  All awards are at the sole discretion of our selection committees.  However, schools may give recommendations and our committees will consider it as part of the award process.

What Is A Qualified School?

Per tax credit law ARS 43-1601: Qualified school means a non-governmental primary or secondary school (K-12) that is located in the state of Arizona and that does not discriminate on the basis of race, color, disability, familial status or national origin and that requires all teaching staff and personnel that have unsupervised contact with students to be fingerprinted.  It also includes preschools that offers services to students with disabilities.  A qualified school does not include charter schools or any programs operated by a charter school.

Tax credit law also requires that the school charges tuition and has regular classroom instruction that meets the state requirement for days per year.

In addition, ACSTO has a specific focus on partnering with Evangelical Christian schools. 

If you are a private school that would like scholarship assistance, but are not an Evangelical Christian school or a non-denominational Christian school run by a Evangelically-oriented curriculum, there are many other STOs in Arizona that would love to help.  We wish you the best!

If you are a qualifying school, and would like to partner with ACSTO, please visit our For Schools page for more information.  You can also view our current list of partner schools.

Can Schools Accept Scholarships From An STO That Exceeds Tuition?

The law states that if a scholarship exceeds the school's total cost of educating that student, the amount in excess shall be returned to the STO that made the award.  The STO may allocate the returned monies as a multiyear award for that student or re-award it as scholarships for other students.

A school can only accept scholarship money that pays for the student's current school year.  Any excess must be returned to ACSTO as a 'multi-year scholarship.'  This extra portion will be sent back to the school once tuition is due again for the following school year.

  • For the Summer Award - The school may accept funds for the upcoming school year only.  The previous school year is closed and no scholarships can be used for a previous year's tuition expense.
  • For the Fall Award - The school may accept scholarships for the current school year only.
  • For the Spring Award - This award cylce is unique in that the school may accept funds for the current school year and the upcoming school year.

Can Scholarships Pay for Tuition That Is Past Due?

Scholarships can only be used to pay for any tuition that is still due for the current school year.  The one exception is for awards given in the Spring award cycle, that money can be used to pay for current or upcoming tuition expense.  But no school can accept or use scholarships for a previous school year's tuition expense.

When Are Scholarship Awards Sent To Our School?

ACSTO has 3 scholarship cycles per award/school year: Summer, Fall, and Spring. Each cycle has Original and Overflow/PLUS awards, but they are done seperately (about a month apart). We recommend you become familiar with our timeline.

We do not have a specific date for when we send the checks because we have to make sure everything balances before we release any money.  If we were able to make scholarship awards to students at your school, you can expect to receive a check in the mail within two weeks after our committees meet with a breakdown of the students who were considered and the amounts they were awarded.

What Is An 'Enrollment Status'?

In order for students to be eligible to receive an award they have to be enrolled, or have at least begun the enrollment process, at your school.  This is because if a student is not actually enrolled at a private school, then there is no tuition due, and therefore no scholarship awards can be used for that student.

We send paperwork to your schools about a month before each of our 3 award cycles with lists of students who have applied to receive scholarship awards from us.  On these lists we ask for your school to confirm whether the students are actually attending your school. 

It is up to the school to determine at what point a student is considered to be officially enrolled.

Can Scholarships Be Used For Students Who Leave?

The ADOR only considers students who are currently enrolled in a private school as eligible for tuition scholarships. So for students who have left your school, scholarships can only be used for the time students actually attended. The remainder is sent back to ACSTO to be used among other students at your school. 

Questions about when we make our awards,
or when application deadlines are?

Check out our Award Year Timeline!

Be sure to visit to our blog as well! We frequently blog in response to questions we receive in order to answer many of these common questions in more detail, in addition to keeping you updated on the newest developments in Arizona school choice!

News & Updates

ACSTO: Arizona Christian School Tuition Organization

Notice: A school tuition organization cannot award, restrict, or reserve scholarships solely on the basis of a donor’s recommendation. A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer’s own dependent. A.R.S. 43-1603 (C)

Contact Us

ACSTO, Inc.

PO Box 6580
Chandler, AZ 85246

  • Office: 480.820.0403
  • Fax: 480.820.2027