momma_blue,
Yes! Indeed, the Arizona income tax booklet
https://azdor.gov/file/12173/download?token=aErrumSx
specifically states on page 15:
NOTE: If you did not claim a dependent who is 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 dependent on your Arizona return.
For more information, see the department’s ruling, ITR 05-2,
Will Arizona Allow a Dependent Exemption When a Taxpayer
Does Not Claim Federal Exemption in Order to Claim the
Education Credit?
