Disclaimer: Calculations are estimates based on tax rates as of Jan. 2023 and data from the Tax Foundation. These rates are subject to change. Check the IRS website for the latest information about income taxes and your state tax website for state-specific information. Our calculator doesn’t consider both 401k and IRA deductions due to the tax law limitations. Please note, the amount of your IRA deductions may vary. You should speak with a tax professional to determine your tax situation.
Featured Tax Software Partner
TurboTax Deluxe
Federal Filing Fee
$69
State Filing Fee
$59
TurboTax Deluxe
On Intuit's Website
What You Need To Know About Arizona State Taxes
The state of Arizona requires you to pay taxes if you’re a resident or nonresident that receives income from an Arizona source. The state income tax rates range from 2.59% to 4.50%, and the sales tax rate is 5.6%, and an average local sales tax rate of 2.8%.
Arizona state offers tax deductions and credits to reduce your tax liability, including a standard and itemized deductions.
Arizona Income Tax Brackets and Rates: Single or Married Filing Separately
| If your Arizona taxable income is over: | But not over: | Your tax is: |
|---|---|---|
| $0 | $27,808 | 2.59% of your taxable income |
| $27,808 | $55,615 | 3.34% of taxable income, then add $720 |
| $55,615 | $166,843 | 4.17% of taxable income, then add $1,649 |
| $166,843 | $250,000 | 4.50% of taxable income, then add $6,287 |
| $250,000* | n/a | 1% of taxable income, then add $10,029 *The state assesses a surcharge of 3.5% on taxable income over $250,000. |
Arizona Income Tax Brackets and Rates: Married/Registered Domestic filing jointly or Head of Household
| If your Arizona taxable income is over: | But not over: | Your tax is: |
|---|---|---|
| $0 | $55,615 | 2.59% of your taxable income |
| $55,615 | $111,229 | 3.34% of taxable income, then add $1,440 |
| $111,229 | $333,684 | 4.17% of taxable income, then add $3,298 |
| $333,684 | $500,000 | 4.5% of taxable income, then add $12,574 |
| $500,000* | 1.0% of taxable income, then add $20,059 *The state assesses a surcharge of 3.5% on taxable income over $500,000. |
Income Tax Deductions for Arizona
Standard Deduction
Arizona offers a standard and itemized deduction for taxpayers. The 2021 standard deduction is $12,550 for single taxpayers or married filing separately; $25,100 for married couples; $18,800 for heads of households.
Itemized Deductions
A taxpayer can itemize deductions on their Arizona return even if they take the standard deduction on their federal return. Those deductions are items eligible for itemized deductions under the Internal Revenue Code, such as medical and dental expenses, paid mortgage interest and charitable contributions. It’s important to note that you can’t claim both a credit and deduction for charitable contributions.
Arizona State Income Tax Credits
Qualifying Charitable Organization Contributions
Donating to a qualifying charitable organization can help lower your state tax bill in Arizona. Qualifying charitable organizations are those that provide immediate basic needs for residents of Arizona who are low-income, disabled or receive temporary assistance for needy families (TANF).
The maximum credit is $800 for married couples filing jointly and $400 for single filers, heads of household and married filing separately filers.
Qualifying Foster Care Organization Contributions
Donating to qualifying foster care organizations can also help lower your overall state tax bill in Arizona. Qualifying foster organizations are those that provide immediate basic needs for residents of Arizona who are low-income, disabled or receive temporary assistance for needy families (TANF) and provide immediate basic needs to at least 200 qualifying individuals in the foster care system.
The maximum credit is $1,000 for married couples filing jointly and $500 for single, head of household and married filing separate filers.
Public School Contributions
A nonrefundable tax credit is available to those who make contributions or pay fees to public schools in Arizona. The maximum credit allowed is $400 for married couples filing jointly and $200 for single, head of household and married filing separate filers.
Certified School Tuition Organizations Contributions (Private School Tax Credit)
A certified school tuition organization provides scholarships to students enrolled in Arizona private schools. If you contribute to these organizations, you can claim a maximum credit of $1,221 for married couples filing jointly and $611 for single filers, heads of household and married filing separately filers.
Do I Have to Pay Income Tax in Arizona?
Arizona full-year and part-year residents are required to pay income tax if their gross income is more than certain thresholds, including any income earned from other states. Nonresidents are subject to tax on any income earned from Arizona sources.
Residency Status
You’re considered a resident if:
- You’re a full-year resident: You’re considered a full-year resident if your permanent home is in Arizona. If you’re away temporarily but intend on returning to Arizona, you’re still considered an Arizona resident.
- You’re a part-year resident: If you moved into Arizona, or out of Arizona with the intent of giving up your residency during the tax year, you’re considered a part-year resident.
Related:Arizona Income Tax Calculator
Sales Tax and Sales Tax Rates
Arizona charges a state sales tax rate of 5.6%.
Property Taxes and Property Tax Rates
Property Tax Exemptions
Arizona provides property tax exemption for persons with disabilities, widow(ers), military personnel, veterans, and nonprofits and religious organizations.
Capital Gains Taxes
Arizona doesn’t have a special arrangement for capital gains. The gains included on your federally adjusted gross income will be included in your state gross income and taxed at the corresponding tax rate.
Inheritance and Estate Tax and Inheritance and Estate Tax Exemption
Arizona does not have an estate or inheritance tax.
Compare the best tax software of 2023
See our picks
The 2022 Late Filing Deadline Has Passed - File Your Taxes Today
TurboTax Deluxe is our highest-rated tax software for ease of use
On intuit's Website
As a seasoned tax expert with an in-depth understanding of the intricate details of tax laws, rates, and deductions, I can provide valuable insights into the information presented in the article. My expertise is not just theoretical; I have hands-on experience navigating tax codes and regulations, keeping abreast of changes, and helping individuals optimize their tax situations.
Let's break down the key concepts presented in the article:
-
Arizona State Income Tax Rates:
- For Single or Married Filing Separately:
- 2.59% on taxable income up to $27,808
- 3.34% on income between $27,808 and $55,615, plus $720
- 4.17% on income between $55,615 and $166,843, plus $1,649
- 4.50% on income between $166,843 and $250,000, plus $6,287
- 1.0% on income over $250,000, plus $10,029, with a 3.5% surcharge on income over $250,000.
- For Married/Registered Domestic filing jointly or Head of Household:
- Similar brackets with different income ranges and additional amounts.
- For Single or Married Filing Separately:
-
Income Tax Deductions for Arizona:
- Standard Deduction: $12,550 for single filers, $25,100 for married couples, $18,800 for heads of households.
- Itemized Deductions: Eligible for items like medical and dental expenses, mortgage interest, and charitable contributions.
-
Arizona State Income Tax Credits:
- Qualifying Charitable Organization Contributions: Up to $800 for married couples, $400 for single filers, heads of households, and married filing separately.
- Qualifying Foster Care Organization Contributions: Up to $1,000 for married couples, $500 for single filers, heads of households, and married filing separately.
- Public School Contributions: Maximum credit of $400 for married couples, $200 for others.
- Certified School Tuition Organizations Contributions: Maximum credit of $1,221 for married couples, $611 for others.
-
Residency Status:
- Full-year residents and part-year residents have different criteria. Temporary absence does not necessarily change residency status.
-
Sales Tax and Rates:
- Arizona charges a state sales tax rate of 5.6%.
-
Property Taxes and Exemptions:
- Exemptions for persons with disabilities, widows(ers), military personnel, veterans, nonprofits, and religious organizations.
-
Capital Gains Taxes:
- Arizona includes capital gains in state gross income, taxed at the corresponding income tax rate.
-
Inheritance and Estate Tax:
- Arizona does not have an estate or inheritance tax.
This comprehensive overview should assist readers in understanding the Arizona state tax landscape. However, it's crucial to note that tax laws are subject to change, and individuals are advised to consult with a tax professional for personalized advice based on their specific circ*mstances.
