Arizona HB 2011: school buildings; opening windows

Bill Text

HB2011 - 572R - I Ver 

PREFILED��� NOV 17 2025

 REFERENCE TITLE: individual income tax; subtraction; adoption

 State of Arizona

 House of Representatives

 Fifty-seventh Legislature

 Second Regular Session

 2026

 HB 2011

 Introduced by 

 Representative 
 Kupper

AN 
ACT

AMENDING SECTION 43-1022, Arizona 
Revised Statutes; relating to Individual income tax.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 43-1022, Arizona Revised 
Statutes, is amended to read:

START_STATUTE43-1022. Subtractions from Arizona gross income

In computing Arizona adjusted gross income, the following 
amounts shall be subtracted from Arizona gross income:

1. The amount of exemptions allowed by section 43-1023.

2. Benefits, annuities and pensions in an amount 
totaling not more than $2,500 received from one or more of the following:

(a) The United States government service retirement 
and disability fund, the United States foreign service retirement and 
disability system and any other retirement system or plan established by 
federal law, except retired or retainer pay of the uniformed services of the 
United States that qualifies for a subtraction under paragraph 26 of this 
section.

(b) The Arizona state retirement system, the 
corrections officer retirement plan, the public safety personnel retirement 
system, the elected officials' retirement plan, an optional retirement program 
established by the Arizona board of regents under section 15-1628, an 
optional retirement program established by a community college district board 
under section 15-1451 or a retirement plan established for employees of a 
county, city or town in this state.

3. A beneficiary's share of the fiduciary adjustment 
to the extent that the amount determined by section 43-1333 decreases the 
beneficiary's Arizona gross income.

4. Interest income received on obligations of the 
United States, minus any interest on indebtedness, or other related expenses, 
and deducted in arriving at Arizona gross income, that were incurred or 
continued to purchase or carry such obligations.

5. The excess of a partner's share of income 
required to be included under section 702(a)(8) of the internal revenue code 
over the income required to be included under chapter 14, article 2 of this 
title.

6. The excess of a partner's share of partnership 
losses determined pursuant to chapter 14, article 2 of this title over the 
losses allowable under section 702(a)(8) of the internal revenue code.

7. The amount allowed by section 43-1025 for 
contributions during the taxable year of agricultural crops to charitable 
organizations.

8. The portion of any wages or salaries paid or 
incurred by the taxpayer for the taxable year that is equal to the amount of 
the federal work opportunity credit, the empowerment zone employment credit, 
the credit for employer paid social security taxes on employee cash tips and 
the Indian employment credit that the taxpayer received under sections 45A, 
45B, 51(a) and 1396 of the internal revenue code.

9. The amount of exploration expenses that is 
determined pursuant to section 617 of the internal revenue code, that has been 
deferred in a taxable year ending before January 1, 1990 and for which a 
subtraction has not previously been made. The subtraction shall be 
made on a ratable basis as the units of produced ores or minerals discovered or 
explored as a result of this exploration are sold.

10. The amount included in federal adjusted gross 
income pursuant to section 86 of the internal revenue code, relating to 
taxation of social security and railroad retirement benefits.

11. To the extent not already excluded from Arizona 
gross income under the internal revenue code, compensation received for active 
service as a member of the reserves, the national guard or the armed forces of 
the United States, including compensation for service in a combat zone as 
determined under section 112 of the internal revenue code.

12. The amount of unreimbursed medical and hospital 
costs, adoption counseling, legal and agency fees and other nonrecurring costs 
of adoption, including human embryo adoption.� The 
subtraction under this paragraph may be taken for the costs that are described 
in this paragraph and that are incurred in prior years, but the subtraction may 
be taken only in the year during which the final adoption order is granted or, for a human embryo adoption, only in the year during which the 
legal transfer of the human embryo to the adopting parent occurs.� The 
amount subtracted may not exceed:

(a) In taxable years beginning before December 31, 
2025, $3,000. In the case of a husband and wife who file separate returns, the 
subtraction may be taken by either taxpayer or may be divided between them, but 
the total subtractions allowed both husband and wife may not exceed $3,000.� 

(b) In taxable years beginning from and after 
December 31, 2025, $5,000 f