The Arizona Department of Revenue (ADOR) reminds taxpayers the process to claim tax credits for public schools, Qualifying Charitable Organizations (QCOs) and Qualifying Foster Care Charitable Organizations (QFCOs) has changed.

Public Schools

An individual may claim a nonrefundable tax credit for making contributions or paying fees directly to a public school in this state for support of extracurricular activities. The public school tax credit is claimed on Form 322.

For the purpose of claiming Arizona’s tax credit for contributions made or certain fees paid to a public school, ADOR now requires taxpayers report the school’s County Code, Type Code, District Code and Site Number (CTDS) on Form 322, which is included with the Arizona income tax return. 

The CTDS is a nine (9) digit number that the Arizona Department of Education uses to identify Arizona public and charter schools. Taxpayers must enter the school code and not the district code. To find the CTDS number for a public school in Arizona, please visit the ADOR website at https://azdor.gov/tax-credits/public-school-tax-credit.

Qualifying Charitable Organizations and Qualifying Foster Care Charitable Organizations

Arizona provides two separate tax credits for individuals who make contributions to charitable organizations: one for donations to Qualifying Charitable Organizations and the second for donations to Qualifying Foster Care Charitable Organizations. Individuals making cash donations to these charities may claim the tax credits on their Arizona Personal Income Tax returns.

Effective in 2018, the Arizona Department of Revenue assigned a five (5) digit code to identify each QCO and QFCO for Arizona tax credit purposes on Form 321 and Form 352, which is included with the Arizona income tax return. Taxpayers must use the “QCO Code” or “QFCO Code” of certified organizations to claim the tax credits for contributions to QCOs or QFCOs.

The department maintains the lists of qualifying charities and assigned code for each organization. A taxpayer can only claim a tax credit for donations made to certified charities. Please note: QFCOs are currently going through the re-certification process for 2019 contributions and not all 2018 certified QFCOs are certified for 2019.

To confirm certified qualifying charities and more information on QCO and QFCO tax credits, see https://azdor.gov/tax-credits/contributions-qcos-and-qfcos. 

Update from Kentucky – 2/14/2019

“We resumed sending acknowledgements this morning.  Please give us until Monday, 2/18 to catch up processing before checking on outstanding acknowledgements.  We apologize for the inconvenience this has caused and appreciate the patience you have shown us.”

Update from Kentucky – 2/11/2019

“We are in the process of making a change to MeF that involves the acknowledgement process.  We have stopped sending acknowledgements until it is verified that the change will  not negatively  impact the acknowledgement process.  We anticipate resuming acknowledgements on Wednesday, 2/13/2019.”

Kentucky has only downloaded a small batch of returns that have been submitted.  They are walking them through their system to ensure that everything is working properly.  They are hoping to be current by the end of the week.

Software vendors received the below messaging from MA DOR.

“Please be advised that reject code F1-1172 which had been incorrectly rejecting some returns has been fixed. F1-1172: The Schedule E-1, line 20, loss amount must equal Schedule E-1, line 23, losses amount for royalties. Any incorrectly rejected returns can now be resubmitted.“

Scenario:  The taxpayer is filing MFS and they are eligible for the Refundable Sales Tax Relief credit on HI (like a low income credit) and the spouse’s AGI is zero or not know, the Hawaii return must be filed via paper.

2/7/2019

Issue 2538 is now resolved. Current functionality where 1099-R’s marked as IRA/SEP/SIMPLE will still be automatically subtracted from the WI return, when applicable. If a 1099-R is from a Pension or Annuity, the qualifying portion will be entered inside of the WI return. There is a new “Retirement Income Exclusion Worksheet” menu to enter the qualifying portion(s) of Pension and/or Annuity income. Text within this menu, as shown below, indicates IRA distributions have already been carried over to assist in avoiding double-entry by the preparer. Also, a state prompt was added to the WI program (shown below) that will indicate to the preparer pension income has been found on the Federal return. This prompt only shows when first creating the WI return and only when pension income is reported on the Federal return.

2/6/2019

Issue 2538 was not included in this morning’s deployment. Once deployed, there will be a new “Retirement Income Exclusion Worksheet” menu as well as a prompt that users will see when first creating a WI return to complete this menu if pension income is found on the Federal return.

2/5/2019

Issue 2538 should be pushed live in the next deployment which should be this week. Possibly tomorrow (Wednesday) at the earliest. Once live, this post will be updated to detail what was included in the update.

2/1/2019

We have opened Issue #2538 to correct a previous WI update where “Code 26” for the WI retirement subtraction was removed as a drop-down selection within the Wisconsin program. Currently, “Code 26” is automatically calculated based on Federal return entries when a 1099-R is present and marked as an IRA/SEP/SIMPLE but 1099-R’s that are from Pensions or Annuities are not being included in the automatic calculation. Once Issue 2538 has been resolved, additional details will be provided in this post as to what was included in the update.

At this time, we would advise holding WI returns with pension/annuity income that would qualify for this subtraction until this post has been updated. We anticipate this being resolved next week. However, any Federal returns can still be transmitted as usual. Impacted WI returns can be transmitted as a “State Only” once resolved.

Michigan Department of Treasury send the below messaging to software vendors today.

“Due to the recent weather closures for state of Michigan offices, the Michigan Department of Treasury is in the process of issuing acknowledgments for e-filed income tax returns. It is anticipated that this process will be caught up by the close of business Friday, February 8.  We apologize for any inconvenience this may cause.”

2/6/2019

Arizona Department of Revenue sent the below message late yesterday evening. AZ acknowledgements should begin populating at your sites as they work through their backlog.

“Thank you all for your patience. The issue with BR901 has been resolved. Please resume all activity (sending submissions, calling acknowledgements, etc.). Let us know if you additional questions.”

**Arizona also sent erroneous Reject Code 901’s. If your site had any AZ return rejected for Reject Code 901, AZ has stated these can be resubmitted.

2/5/2019

Software vendors have received the below messaging from the Arizona Department of Revenue.

“Please be advised that Arizona has temporarily suspended receiving submissions from the IRS. We will notify you when we start accepting returns.”

Arizona returns can still be transmitted to TaxSlayer as normal, just be advised there will be a delay in receiving acknowledgements.

2/6/2019

Ohio sent the below messaging to software vendors this morning.

“Ohio is currently in the processing of re-sending out all acknowledgements which were not received.  We are estimating that all acknowledgments will be re-sent out and received over the next several business days.  A follow-up email will be sent when all acknowledgements are showing received in our system.  The problem appears to be an intermittent problem, and we are still researching the issue to ensure this does not happen for future submissions.”

2/4/2019

Ohio sent a message to all software developers that they are aware of an issue that is isolated to acknowledgements only.  All submissions were processed according to the standard Ohio processing and rejection rules.  They are aware of the error and are currently researching the cause and will notify software vendors when there is a resolution.