AZ SB1018

Establishes an Arizona earned income tax credit equal to 5 percent of the federal earned income tax credit for eligible individuals under Internal Revenue Code section 32.

Requires taxpayers to claim the credit on their income tax return using department-provided forms, with an exception for those with no tax liability who don't meet filing requirements.

Limits the credit to one claimant per household per taxable year.

Provides that any credit amount exceeding tax liability after applying other credits and setoffs shall be refunded to the taxpayer in the same manner as refunds under section 42-1118.

Applies retroactively to taxable years beginning after December 31, 2021, and is subject to the legislative income tax credit review schedule every five years.