AZ SB1269

Expands the public school contributions income tax credit to include classroom supplies as an allowable use of contributions, defined as consumable or reusable education-related supplies like paper, pens, markers, scissors, and binders (excluding calculators, computers, or electronic devices).

Simplifies tax credit limits by eliminating the tiered structure for married couples, setting a flat $400 maximum credit for married couples filing jointly and maintaining $200 for single individuals and heads of household.

Modifies the credit calculation for married individuals filing separately to allow each spouse to claim up to $200 (rather than one-half of the joint return amount).

Requires public schools to categorize and report spending on contributions by type, including a new category for classroom supplies, in their annual reporting to the department by February 28.

Applies retroactively to taxable years beginning after December 31, 2015.