Arizona Private School Tax Credit: How to Give to an STO in 2026

Arizona has run the country's oldest private school tax credit since 1997. It works through school tuition organizations (STOs): nonprofits certified by the state that turn donations into private school scholarships. You give to an STO, and Arizona reduces your state income tax by the same amount, up to a yearly limit.

This page covers what donors need to know in 2026: the limits, the deadlines, the rules for businesses, and how the new federal scholarship tax credit fits around Arizona's program. It's general information, not tax advice.

How the Arizona private school tax credit works

There are four STO credits, plus a fifth school credit for public schools:

The limits rise a little each year. For 2027, the original credit goes to $797 single and $1,589 married, and the switcher credit to $794 and $1,580, per the Arizona Department of Revenue (ADOR).

A married couple who gives the full original and switcher amounts for 2026 gives $3,131 and gets $3,131 off their Arizona tax. If the credit is bigger than what you owe this year, ADOR's Publication 707 says the unused part carries forward for up to five years.

Arizona's four tax credits compared

Arizona gives individuals four separate charitable tax credits, each with its own limit and form. People often lump them together as "the Arizona tax credit," but only one of them funds scholarships. Here are the 2026 limits from the Arizona Department of Revenue (ADOR):

ADOR has announced 2027 limits for the QCO ($513 single, $1,022 married) and QFCO ($640 single, $1,278 married) credits, along with the STO increases noted above.

How the Arizona credits stack

• They add up. Each credit has its own cap, so you can claim all of them in the same year. ADOR's Publication 707 confirms that a taxpayer can claim all five school credits (public school, the two STO credits and the two S corporation pass-through STO credits) in one year, and the QCO and QFCO credits are claimed on their own forms with their own limits.
• Original before switcher. The switcher credit only opens up after you give the full original STO amount.
• No double dipping. An amount claimed as an Arizona credit can't also be an itemized deduction on your Arizona return.
• Unused credit carries forward up to five years for the school credits (per Publication 707) and the QCO credit (per the Form 321 instructions).
• April 15 rule. Gifts made from January 1 through April 15, 2027 can count toward 2026 for the QCO, QFCO and STO credits.

Which Arizona credit is for scholarships?

Only the STO credits. If your goal is to pay for K–12 scholarships, give the STO amounts first; that's the "Arizona school tax credit" most donors mean when they talk about private school giving. The public school credit supports programs at a specific public school rather than scholarships. The QCO and QFCO credits support charities that serve low-income residents and foster families.

For giving beyond Arizona's limits, the federal scholarship tax credit adds up to $1,700 per taxpayer from 2027, covered below.

Deadlines: the April 15 rule

Individual donors get extra time. ADOR says gifts made during 2026, or from January 1 through April 15, 2027, can be claimed on the 2026 Arizona return. If you give in early 2027 and want the higher 2027 limit instead, claim it on your 2027 return filed in 2028. You choose one year per gift.

Corporate credits work differently. Both corporate credits have statewide caps per fiscal year: $110 million for the low-income credit and $6 million for the disabled/displaced credit. Because of the caps, a corporation must be preapproved before it gives. The corporation contacts an STO, and the STO files the preapproval request with ADOR. ADOR won't accept requests sent directly by a corporation. Our guide to business tax credit scholarships compares Arizona's corporate credits with Florida's, Georgia's and Pennsylvania's.

Rules that trip donors up

• Use a certified STO. Only gifts to an STO on ADOR's current list qualify. Check the list before you give.
• No gifts for your own child. A gift does not qualify if you designate it for the direct benefit of your dependent. Agreeing with another family to recommend each other's children (a "swap") also disqualifies the gift.
• Original first, then switcher. You can only claim the switcher credit after giving the maximum under the original credit.
• It's a credit, not a deduction. It lowers your Arizona tax dollar for dollar. A gift that earns a full state credit generally can't also be deducted as a charitable gift on your federal return. See tax credit vs. deduction for how the two compare.

How Arizona's credit stacks with the federal $1,700 credit

From January 1, 2027, Section 25F of the tax code gives individuals a federal credit of up to $1,700 each ($3,400 for a married couple who each give) for cash gifts to scholarship granting organizations. States have to opt in, and each opted-in state gives the IRS a list of approved SGOs. Read the full Education Freedom Tax Credit guide for the details.

Arizona has not opted in as of October 2026. It was not on the IRS list of 30 states that made an advance election (current as of September 14, 2026), and Gov. Katie Hobbs vetoed a bill to opt the state in on April 13, 2026. For 2027, a state must file its advance election by January 1, 2027 under Treasury's proposed rules. Check our tracker of states that opted in for the latest.

What this means for Arizona donors:

1. You can still claim the federal credit. Under the proposed rules, you may give to any SGO on the IRS list, wherever you live. An Arizona resident can give to an SGO listed by Texas, Florida or any other opted-in state.
2. Arizona STO gifts won't earn the federal credit. Until Arizona opts in and lists its organizations, an Arizona STO is not an SGO under federal law.
3. The two don't cancel each other. The federal credit is reduced only by state credits for qualified contributions, meaning gifts to a listed SGO. Your Arizona STO credit is for a different gift, so it doesn't reduce your federal credit.

Worked example: a married couple in Phoenix

This assumes they owe at least that much tax in each year. Federal credits they can't use carry forward up to five years under Section 25F.

If Arizona opts in later and an STO also becomes a federal SGO, the math changes: an Arizona credit for the same qualified gift would reduce the federal credit. Treasury's proposed rules let donors avoid that by designating only part of a gift as a qualified contribution, so the state credit is applied first to the part that isn't. Keeping two separate gifts is the simplest way to get both.

How to give, step by step

1. Decide your amounts. Start with the original credit limit for your filing status, then the switcher limit if you want more.
2. Choose an STO. Compare STOs on ADOR's list by the schools they serve, how they award scholarships and their administrative costs. Examples on the list include Arizona Christian School Tuition Organization, Arizona School Choice Trust and AAA Scholarship Foundation. Our guide to choosing a scholarship fund has a due-diligence checklist.
3. Give before April 15. Give online or by check, and keep the receipt.
4. Claim on your Arizona return. File Form 323 for the original credit and Form 348 for the switcher credit.
5. Add the federal credit for 2027. Pledge on Edulist's donor page and we'll email you when giving opens on January 1, 2027. You give directly to the SGO; Edulist never handles donations. Our step-by-step guide to claiming the federal credit covers the receipt and Form 8525.

What Arizona scholarships pay for

Arizona STO scholarships pay private school tuition. Many Arizona families also use the state's Empowerment Scholarship Account for curriculum, tutoring and online learning. See Arizona scholarships and ESAs for the family side of the program.