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REFERENCE TITLE: income tax; credit; child care |
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State of Arizona House of Representatives Fifty-seventh Legislature Second Regular Session 2026
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HB 4135 |
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Introduced by Representatives Luna-Nájera: Biasiucci, Carter N, Carter P, Connolly, Contreras L, Gutierrez, Hernandez A, Hernandez C, Lopez, Martinez, Peña, Stahl Hamilton, Tsosie, Volk, Wilmeth; Senators Diaz, Fernandez, Gonzales
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AN ACT
amending sections 43-222 and 43-323, Arizona Revised Statutes; amending Title 43, chapter 10, article 5, Arizona Revised Statutes, by adding section 43-1080; relating to INDIVIDUAL income tax credits.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 43-222, Arizona Revised Statutes, is amended to read:
43-222. Income tax credit review schedule
The joint legislative income tax credit review committee shall review the following income tax credits:
1. For years ending in 0 and 5, sections 43-1079.01, 43-1088, 43-1089.04, 43-1167.01 and 43-1175.
2. For years ending in 1 and 6, sections 43-1072.02, 43-1074.02, 43-1075, 43-1076.01, 43-1077, 43-1078, 43-1080, 43-1083, 43-1083.02, 43-1162, 43-1164.03 and 43-1183.
3. For years ending in 2 and 7, sections 43-1073, 43-1082, 43-1085, 43-1086, 43-1089, 43-1089.01, 43-1089.02, 43-1089.03, 43-1164, 43-1165, and 43-1181.
4. For years ending in 3 and 8, sections 43-1074.01, 43-1168, 43-1170 and 43-1178.
5. For years ending in 4 and 9, sections 43-1073.01, 43-1081.01, 43-1083.03, 43-1084, 43-1164.04, 43-1164.05 and 43-1184.
Sec. 2. Section 43-323, Arizona Revised Statutes, is amended to read:
43-323. Place and form of filing returns
A. All returns required by this title shall be in such a form as the department may from time to time prescribe and shall be filed with the department.
B. The department shall prescribe a short form return for individual taxpayers who:
1. Are eligible and elect to pay tax based on the optional tax tables pursuant to section 43-1012.
2. Elect to claim the optional standard deduction pursuant to section 43-1041, subsection A, but not the increased amount for charitable deductions under section 43-1041, subsection I.
3. Elect not to file for credits against income tax liability other than those contained in sections 43-1072, 43-1072.01, 43-1072.02, 43-1073, and 43-1073.01 and 43-1080.
4. Are not required to add any income under section 43-1021 and do not elect any subtractions under section 43-1022, except for the exemptions allowed under section 43-1023.
C. The department may provide a simplified return form for individual taxpayers who:
1. Are eligible and elect to pay tax based on the optional tax tables pursuant to section 43-1012.
2. Are residents for the full taxable year.
3. File as single individuals or married couples filing joint returns under section 43-309.
4. Are not sixty-five years of age or older or blind at the end of the taxable year.
5. Claim no exemptions under section 43-1023 for the taxable year.
6. Elect to claim the optional standard deduction under section 43-1041, subsection A, but not the increased amount for charitable deductions under section 43-1041, subsection I.
7. Are not required to add any income under section 43-1021 and do not elect to claim any subtractions under section 43-1022 or file for any credits under chapter 10, article 5 of this title, except the credits provided by sections 43-1072.01, 43-1072.02, and 43-1073, 43-1073.01 and 43-1080.
8. Do not elect to contribute a portion of any tax refund as provided by any provision of chapter 6, article 1 of this title. Notwithstanding any provision of chapter 6, article 1 of this title, a simplified return form under this subsection shall not include any space for the taxpayer to so contribute a portion of a refund.
D. The department shall prepare blank forms for the returns and furnish them on request. Failure to receive or secure the form does not relieve any taxpayer from making any return required.
E. An individual income tax preparer who prepares more than ten original income tax returns that are timely filed during any taxable year that begins from and after December 31, 2017 shall file electronically all individual tax returns prepared by that tax preparer, for that taxable year and each subsequent taxable year. An individual income tax preparer may not charge a separate fee to the taxpayer for filing a return using the department's electronic filing program. This subsection does not apply if the taxpayer elects to have the return filed on paper or if the return cannot be filed electronically for reasons outside of the tax preparer's control.
F. Fiduciary returns, partnership returns, withholding returns and corporate returns shall be filed electronically for taxable years beginning from and after December 31, 2019, or when the department establishes an electronic filing program, whichever is later. Any person who is required to file electronically pursuant to this subsection may apply to the director, on a form prescribed by the department, for an annual waiver from the electronic filing requirement. The director may grant the waiver, which may be renewed for one subsequent year, if any of the following applies:
1. The taxpayer has no computer.
2. The taxpayer has no internet access.
3. Any other circumstance considered to be worthy by the director exists.
G. A waiver is not required if the return cannot be electronically filed for reasons beyond the taxpayer's control, including situations in which the taxpayer was instructed by either the internal revenue service or the department of revenue to file by paper.
Sec. 3. Title 43, chapter 10, article 5, Arizona Revised Statutes, is amended by adding section 43-1080, to read:
43-1080. Credit for child care expenses; definition
A. For taxable years beginning from and after December 31, 2025, a credit is allowed against the taxes imposed by this title for each qualified child of a taxpayer as provided by this section.
B. The amount of the credit is:
1. $2,000 for each qualified child of a taxpayer whose federal adjusted gross income for the taxable year is $75,000 or less.
2. $1,000 for each qualified child of a taxpayer whose federal adjusted gross income for the taxable year is more than $75,000 but less than $150,000.
C. If the allowable amount of a tax credit under this section exceeds the taxes otherwise due under this title for the taxable year, after applying all other credits to which the claimant may be entitled and after any setoff under section 42-1122, the excess shall be paid in the same manner as a refund under section 42-1118.
D. Credits are allowed under this section on a first-come, first-served basis. The department may not authorize credits under this section that exceed in the aggregate a total of $15,000,000.
E. For the purposes of this section, "qualified child" means a taxpayer's dependent child who is five years of age or younger as of December 31 of the taxable year and who receives child care services through a family child care home or in-home provider that is certified by the department of economic security pursuant to section 46-807 and that implements a curriculum that aligns with other early child hood learning programs.
Sec. 4. Purpose
Pursuant to section 43-223, Arizona Revised Statutes, the legislature enacts section 43-1080, Arizona Revised Statutes, as added by this act, to support working families obtain quality child care in this state.
Sec. 5. Short title
This act may be cited as the "Arizona Working Families and Quality Care Act".