"we can now exclude 20,400"

I think you mean, the Feds allow you to split income, which means you split the UI (no matter which recipient one, the other, or even both) and then each person gets up to the $10,200 exclusion.

"but will AZ automatically make the additional deduction for the additional unemployment?"

I found this:

https://azdor.gov/legal-research/conformity-irc

"The American Rescue Plan of 2021 included a subtraction from federal adjusted gross income of up to $10,200 in unemployment income per person for the 2020 tax year. Taxpayers who filed their original federal return for tax year 2020 claiming the subtraction should file their Arizona return starting with federal adjusted gross income from their federal return. Taxpayers that did not take the subtraction on their original federal return and are waiting for the IRS to adjust their return to remove the subtraction should wait to amend their Arizona return. The Department is analyzing this situation and will post additional guidance soon."

"Arizona's Department of Revenue is a political playground with novice staff who know little and care less."

Apparently. I can't find that "additional guidance" that is supposed to post "soon."  🙂

They do tell you: "The instructions issued with the 2020 Arizona tax returns are correct. For a complete list of the additions and subtractions that apply to 2020, see the 2020 instructions for Arizona Form 140 (individuals) or Arizona Form 120 (corporations). The statutory additions can be found in A.R.S. § 43-1021 (A.R.S. § 43-1121 for corporations) and the subtractions in A.R.S. § 43-1022 (A.R.S. § 43-1122 for corporations)."

But it might be only 1 times $10,200: "In April, the Arizona Legislature passed SB 1752 unanimously and Governor Doug Ducey signed the bill into law. To highlight the significance of SB 1752 for Arizona taxpayers, President Leach stated, “Many Arizonans and businesses have experienced financial hardships during the pandemic, and this bill will provide immediate tax relief at a time when it is needed the most. Those out of work will now see the first $10,200 in unemployment income excluded from taxation and businesses that participated in the Paycheck Protection Program are provided clarity when filing their taxes. In total, my bill provides more than $600 million in tax relief to Arizonans. It is truly gratifying to sponsor a bill that will have such a positive impact on lives in our state.”"

I suggest checking with your AZ resources.