HB 2685 Summary

• Establishes a state earned income tax credit of $350 for Arizona taxpayers who qualify for the federal earned income tax credit under Internal Revenue Code Section 32.

• Requires the Department of Revenue to provide claim forms with individual income tax returns, with claims filed alongside tax returns (or self-certification for those with no tax liability and not required to file).

• Limits the credit to one claimant per household per taxable year, with any excess amount paid as a refund if the credit exceeds total tax liability.

• Adds section 43-1073.02 to the income tax credit review schedule for review in years ending in 0 and 5.

• Applies retroactively to taxable years beginning January 1, 2025, intended to provide economic benefit to low-income persons and families in Arizona.