I was following the thread of an original post regarding the amount you can take in credit for Arizona public schools or foster care organizations, and how it is handled on the federal. Hers was between the years 2017 and 2018, my question will be talking about all in one year 2018.
In 2018 I took a federal deduction for a contribution I made to my grandkids school for $200 and another for the Casa De Los Ninos which is under the Foster Care credits in AZ. So that federal deduction is then deducted from the AZ Schedule A deductions on the AZ 140 state return. The two payments are then available credits for the AZ income tax. In my case some was carried over, and not all was used in 2018.
You referenced the IR-2019-109 and I see that it did not go into affect until 8/12/2019, but the fifth paragraph down deals with state tax credits which are dollar for dollar which our state of AZ does. I took the $200 and $500 charitable contributions on my federal that year, and also claimed the $200 and $500 as a tax credit. I also can see on my return that the reconciliation of the itemized deductions of the federal to the state itemized reduces the itemized deductions by $700. And then the credits are applied. I did not get the whole $700 that year, it carried forward.
In the paragraph talking about the state dollar for dollar tax credits it gives a limitation of $150 credit. I don't understand that as it is referencing dollar for dollar credits of $1000 (their example) and that you do not have to reduce the federal if the state tax credit received or expected is no more than $150 (15%).
Amy advised her to take the deduction off of her federal return and you agreed after reading the IRS form. I know this was 2018 and maybe did not apply until 2019, but I would like to understand it as I am helping my Dad do his in turbo tax this year. Thank you for any help you might be!
