Removed 25yo dependent from Fed return. Both refunds decreased. Why doesn't my AZ tax refund increase when I add an "AZ-only dependent (student)" onto the return?

[SweetieJean · Accepted solution]

Per AZ,

If you do not claim a dependent exemption for a student on your federal return in order to allow the student to claim a federal education credit on the student’s federal return, you may still claim the exemption on your Arizona return. For more information, see Arizona Individual Income Tax Ruling ITR 05-2.

For Arizona income tax purposes, A.R.S. § 43-1001.3 provides that the term “dependent” has the same meaning as prescribed under I.R.C. § 152.

One of those requirements that the dependent be under age 24. Yours is too old.

https://www.freetaxusa.com/FreeTaxUSA/formdownload?form=az_ITR_05-2.pdf

https://www.law.cornell.edu/uscode/text/26/152