Is Arizona The Only State With Conformity Indecision?
I don't know how to prepare Arizona income tax returns. Neither does anyone else. There is a political battle about conformity to the 2025 federal changes. The legislature is controlled by one party, but the governor is from the other.
One side wants to allow the $6,000 senior standard deduction. The other doesn't. One side wants to allow the $40,000 SALT deduction (including the part from state and local income taxes.) The other doesn't. One side wants to follow the federal cost recovery changes for business. The other doesn't.
Both sides seem to agree on allowing deductions for tips and overtime.
The Department of Revenue released forms that follow the governor's position. This is what the software follows, but the instructions admit that amended returns might have to be filed if the forms don't reflect the law. The legislature passed its version on January 15, and the governor vetoed it on January 16.
The governor and all the legislators are up for reelection in November. We might have a compromise by then.
