AZ HB2358

Allows Arizona taxpayers a tax credit of $100 per dependent under age 17 and $25 per dependent age 17 and older.

Credit applies to taxpayers with federal adjusted gross income below $200,000 (single filers/head of household) or $400,000 (married joint filers).

For higher-income taxpayers, the credit is reduced by 5% for each $1,000 (or fraction thereof) that income exceeds the applicable threshold.

For nonresident or part-year residents, the credit is limited to the percentage that Arizona gross income represents of federal adjusted gross income.

Beginning in tax year 2021, the $100 and $25 credit amounts shall be annually adjusted for inflation using the Phoenix consumer price index, rounded to the nearest dollar but not below prior year amounts.