AZ SB1077

Establishes a tax credit of up to $1,000 per qualified foster youth employee, with a maximum of $5,000 per taxpayer per taxable year for both individuals (section 43-1075) and corporations (section 43-1162).

Defines "qualified foster youth" as individuals currently or formerly (within 7 years) in legal custody of the Arizona Department of Child Safety, Indian tribes, or federal Bureau of Indian Affairs who work at least 20 hours per week and were not previously employed by the taxpayer.

Limits total tax credits authorized under both sections to $1,000,000 per calendar year, distributed on a first-come, first-served basis with protections against duplicate claims.

Allows unused credits to be carried forward for up to five consecutive taxable years and requires taxpayers to submit documentation to verify employee eligibility.

Applies to taxable years beginning after December 31, 2021, with credits in lieu of wage expense deductions.