income tax; credit; child care

HB 4135 creates a new child care tax credit for Arizona taxpayers with children under five who use certified child care providers. The credit provides $2,000 per child for families with federal adjusted gross income of $75,000 or less, and $1,000 for incomes between $75,000 and $150,000 annually. A total of $15 million in credits is available each year on a first-come, first-served basis, with excess credits paid as refunds. The credit applies to tax returns filed for 2026 and later, supporting working families seeking quality early childhood care.