STO Law Updates

Please see letter below that outlines changes made to law. Most notable: you can now donate through April 15th so very little time to have to float any money!

Dear ACSTO Donors, Scholarship Applicants, & Friends:

The Legislature has passed and Gov. Brewer has signed three bills regarding the scholarship tax credits. I thought you might be interested in the major provisions. They include the following:

SB 1274 sponsored by Sen. Al Melvin, Tucson, allows donations made through April 15 to count as being made during the prior calendar year at the election of the donor.
HB 2664 sponsored by Rep. Rick Murphy, Glendale, implements the work of the House Ad Hoc Committee and includes more than 20 changes in the law relative to the operation of school tuition organizations (STO). Among the major changes in this bill are the following:

Authorization of the Arizona Department of Revenue (ADOR) to certify or decertify STOs relative to their compliance with the applicable law.
Provides annual increases in the maximum donation per the Consumer Price Index.
Prohibits donor “swaps” and requires STOs to widely communicate this prohibition.
Confirms that recommendations by donors are permitted, but provides they cannot be the sole factor in making award decisions and requires that financial need be a factor in the award process.

Requires STOs to report the number and aggregate amount of scholarships in categories which reflect the families' financial status compared to federal free or reduced priced lunch income standards. This change has precipitated ACSTO changing its application form to no longer require pages 1 and 2 of the applicant’s federal income tax return but rather require a Financial Information Form that provides all of the information necessary to assess the applicant’s financial category.
Requires an independent CPA financial audit or review be provided to ADOR depending on the size of the STO.

Made other technical changes aimed at increasing overall STO transparency and accountability.
HB 2663, also sponsored by Rep. Murphy, basically conformed the provisions of HB 2664 dealing with the individual scholarship tax credit to STOs dealing with the corporate scholarship tax credit and Lexie’s Law.
Rep. Debbie Lesko, Peoria, and Rep. Andy Biggs, Gilbert, also served on the Ad Hoc Committee and were instrumental in advancing these reforms through the legislative process.

The essence of these reforms is that state law is now very much similar to the operational practices that ACSTO pioneered and has faithfully followed since its inception in 1998.

2009 Update on the kids

Hi Everybody,

Really busy year as expected for all of us. The kids are growing like weeds. They are all doing so well in school. Very unique this year for Josiah and Elaina is that they are in the same class together. At Gilbert Christian School, 1st through 3rd grade are in the same class. It is always fun to compare stories at night.

Our big event of the year was moving to a new house. This seems to be the year of sports. Caleb is in basketball and gave a noble effort at football last spring. Man, there are some big kids. Josiah is about the biggest baseball fan you can find and is playing practically year round. Elaina will be trying out scoccer again.
Above are some pictures of the kids. I hope all find you well. We would love hearing from you.

How do Tax Credits work

I get a lot of questions about how this actually works. A tax credit is better than a deduction because it actually lowers the amount of money you owe on your taxes. A tax deduction simply lowers your taxable income which is beneficial but not as beneficial as a tax credit.

Most employers deduct some amount of money out of each paycheck for taxes. You are settling what you actually owe the State when you do file for your taxes by April 15th. Some people think the tax credit won't help because they always get money back anyways. If you look a little closer, in most cases, you will get more money back by innvolving yourself in a program like this. This is because what you owe to the State becomes less.

Here are some hypothetical examples:


Scenario 1 - A Family of Four
Total combined income
$40,000
Taxes for the year
$474
Tuition tax contribution
$474
Total taxes after contribution
$0

Scenario 2 - A Family of Four
Total combined income
$80,000
Taxes for the year
$1,777
Tuition tax contribution
$1000
Total taxes after contribution
$777

Here are some updated pictures of us!

Abner and Elaina in Abner's crib.

Elaina prek graduation. She is doing great in Kindergarten now.

Josiah enjoying his new cousin!

Kids on Vacation.

Elaina, Josiah and Caleb Update

Elaina is now at Surrey Garden Christian School. We are really enjoying watching her grow. She is reading many small books and just generally a happy child.

Josiah is reading like a regular bookworm. He is in second grade. When he is not thinking about school. He is thinking baseball. In his last review, the teacher commented that when he is wandering off or day dreaming in school that she pretty much knows his mind is on a baseball game somewhere. He is doing very well with memorization of his versus and in all subjects.

Caleb is now full time at Surrey in the 5th grade. This has been a tough transition for him but he is doing well. If the dog would stop eating his homework, he would be next to perfect in his grades.

Important ACSTO Facts

· This is a tax credit, not an itemized deduction!
· If you work for a large corporation, they may double your gift! Check with your company.
· Check with your accountant but you can also claim a federal tax write off.
· The amount of your state income tax for the year will be reduced by the full amount of your donation!
· Don’t forget that you can give to this and to public schools maximizing your credit up to $1400 for a married couple.

ONE REALLY NICE THING: TEMPE SCHOOLS CREDIT UNION WILL GIVE YOU A NO INTEREST LOAN IF YOU WANT TO GIVE TO THIS AND DON'T REQUIRE PAYMENT BACK UNTIL AFTER YOU GET YOUR TAX RETURN!!

For privacy reasons, ACSTO is not permitted to inform us of your donation so we thank you in advance!

Abner Update

Abner has a few more years to go until school but thought you might all want an update anyway. Abner has pretty much taken over the family. He is cute and he knows it. He gets about is much attention as any 1st born child. The kids love him. He is always full of smiles and laughs. He is starting to make out words. He is all boy and his favorite and most stated word is - "ball."