AZ preparers A. R. S. AZ 43-1089 (Tax Credit School Tuition)

[AZ-Tax]

When your client participates/donates in this AZ Tax Credit program, do you also deducted 100% of the clients donation on Fed Sch A?

[PIGLEE]

Yes, but on the AZ return you need to back it out of the AZ Sch A Deductions. On the AZ return you cannot take the A deduction AND the Credit.

[AZ-Tax]

Seems like "double dipping"

If the taxpayer is going to get back 100% of the tax credit that the TP donated and then deduct 100% of the donation on the TP's Fed itemized deductions, obviously the taxpayer is going to profit from this donation. The increased Fed tax saving due to the itemized donation deduction does not have to be reported on the following tax years tax return. Pretty sweet deal.

[PIGLEE]

Yes, real sweet. The only ones that don't get any benefit from it are the grandparents that are talked into the Public School Credit, and they don't owe any AZ taxes, they thought they would get their money back, and they don't.