ARIZONA HOUSE OF REPRESENTATIVES

Fifty-seventh Legislature

First Regular Session

House: WM DP 5-4-0-0 | 3rd Read DP 45-15-0-0-0

HB 2601: income tax; exemption; minors

Sponsor: Representative Kupper, LD 25

House Engrossed

Overview

Exempts individuals under 18 years of age whose Arizona gross income is $50,000 or less in a taxable year regardless of the source or nature of the income and excludes individuals under 18 years of age from being subject to withholding by an employer.

History

Employees who are under the age of 18 are not excluded from withholding by employers (A.R.S. § 43-403).

Arizona currently taxes 2.5% of an individual's taxable income (A.R.S. § 43-1011). Taxable income is defined in statute as adjusted gross income less any applicable deductions. Arizona gross income is defined as the individuals federal adjusted gross income for the taxable year (A.R.S. § 43-1001).

Provisions

1. Mandates that the first $50,000 paid to an employee under 18 years of age is not subject to withholding by an employer. (Sec. 1)

2. Changes the article heading of title 43, chapter 10, article 4 from Deductions to Deductions and Exemptions. (Sec. 2)

3. Establishes an income tax exemption for individuals under the age of 18 and whose Arizona gross income is $50,000 or less for the taxable year regardless of the source or nature of the income. (Sec. 3)

4. Requires the Department of Revenue to establish a process of verifying the eligibility of the exemption. (Sec. 3)

5. Contains an applicability clause. (Sec. 4)

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9. HB 2601

10. Initials VP/DD Page 0 House Engrossed

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