How does the $10,000.00 Arizona parent exemption work

Under Arizona law, you may be allowed to claim a $10,000 subtraction from income for a parent, grandparent, or great-grandparent who was 65 years or older during 2023.  This means that, for each eligible person, your Arizona adjusted gross income will be reduced by $10,000, potentially lowering your taxes.

The exemption for a qualifying person is claimed on Line 11a of Arizona Form 140, available at the Arizona Department of Revenue's Individual Income Tax Forms page. 

The subtraction, based on the Line 11a exemption, is claimed on Line 41 of Form 140.  The amount is $10,000 for each parent or ancestor of a parent who is not claimed for a different exemption or dependent credit. See Deductions and Exemptions for more details.

According to Box 11a - Qualifying Parents and Grandparents in the Instructions for Arizona Form 140 (also available in the link above): 

You may claim this exemption if all of the following apply: 

 

1. The parent, grandparent, or great-grandparent was 65 years old or older during 2023. 

 

2. The parent, grandparent, or great-grandparent lived in your principal residence for the entire taxable year. 

If your parent or grandparent died during the taxable year, this requirement will still be met if he or she lived with you for the entire part of the year in which he or she was alive. Temporary absences by the parent or grandparent for special circumstances, such as a hospital stay or care in a hospice facility, count as time lived in the taxpayer’s principle residence. 

 

3. You paid more than one-half of the support and maintenance costs of the parent or grandparent during the taxable year. 

To help you determine if you paid more than one-half of your parent or grandparent’s support during the taxable year, it is recommended that you review the department’s procedure, ITP 14-1, Procedure for Determining Support for Purposes of the Parents and Grandparents Exemption Allowed under A.R.S. § 43-1023(C) and complete the worksheet. Keep the worksheet for your records. 

 

4. The parent or grandparent required assistance with activities of daily living. 

The term “activities of daily living” means two or more of the following listed categories. Activities of daily living include both basic activities of daily living and instrumental activities of daily living. The categories of activities of daily living are: dressing, eating, ambulating, toileting, medicating and hygiene, shopping, housekeeping, managing personal finances, basic communication, food-preparation, and transportation.

TurboTax will compute this subtraction for you on your Arizona return, if eligible, based on the information you input into the program.