Customer Notice: To schedule an appointment, please contact us at [email protected].
Standard Deduction and Itemized Deduction
As with federal income tax returns, the state of Arizona offers various credits to taxpayers. An individual may claim itemized deductions on an Arizona return even if taking a standard deduction on a federal return. For the most part, an individual may claim those deductions allowable as itemized deductions under the Internal Revenue Code. If claiming Arizona itemized deductions, individuals must complete and include Federal Form 1040, Schedule A, and, if applicable, an Arizona Schedule A with an Arizona return. These forms must be attached to their returns. For the standard deduction amount, please refer to the instructions of the applicable Arizona form and tax year.
Dependent Credit (Exemption)
One credit taxpayers inquire frequently on is the dependent tax credit. For tax years prior to 2019, Arizona allowed dependent exemptions for persons that qualify as dependents on a federal tax return. Starting with the 2019 tax year, Arizona allows a dependent credit instead of the dependent exemption.
The credit is $100 for each dependent under 17 years of age and $25 each for all other dependents. The credit is subject to a phase out for higher income taxpayers. To get the dependent credit (exemption for years prior to 2019), individuals must enter all information requested under the dependent section on front of Forms 140, 140A, 140PY, or under the dependent section on page two of Forms 140PTC and 140X. If there are more dependents to enter, taxpayers can use the continuation sheet provided with each of these forms. Individuals want to include names, social security numbers, relationships and months the dependents lived in the home. Individuals who do not furnish this information may lose the dependent credit (exemption for years prior to 2019).
Arizona also allows exemptions for the following: