Quality Jobs Tax Credit

Quality Jobs Tax Credit

Funds job creation for advanced industries in Arkansas and manufacturing.

Arizona's Quality Jobs Tax Credit, authorised under A.R.S. § 41-1525, is a state income and premium tax credit program administered by the Arizona Commerce Authority to incentivise business investment and the creation of high-wage employment in Arizona. For FY2026, the program provides $3,000 per qualifying employee per year for three consecutive years, totalling up to $9,000 per net new qualifying job created. The statewide program is capped at 10,000 pre-approved jobs per fiscal year on a first-come, first-served basis; the FY2026 allocation table was published on 30 March 2026. Any credit that exceeds a taxpayer's income or premium tax liability in a given year may be carried forward for up to five consecutive taxable years.

Eligibility thresholds vary by location type. Urban employers — defined as businesses located in a city or town with a population of 50,000 or more, in a county with a population of 800,000 or more — must create at least 25 net new qualifying positions and make a minimum capital investment ranging from $500,000 (at 200 percent of county median wage) to $5,000,000 (at 100 percent of county median wage). Rural and tribal-area employers face lower thresholds: a minimum of five net new qualifying jobs and capital investment from $100,000 to $1,000,000 depending on the wage tier. Only for-profit businesses are eligible; nonprofits, universities, and research organisations do not qualify.

The application process is two-stage. Businesses first submit a pre-application to ACA before hiring begins, identifying their intended capital investment and job creation plan; ACA issues a written Pre-Approval Letter reserving credit. After the close of the taxable year, a post-application verifies actual job creation, and ACA issues a Tax Credit Allocation Letter. Income tax credit applications must be filed with ACA within six months of the taxpayer's taxable year-end or by the tax return filing date, whichever is earlier. Premium tax credit applications are due by 1 March of the year following job creation. Enquiries can be directed to finance@azcommerce.com.