Arizona State Income Tax

Arizona state income tax is progressive, with rates that vary depending on your filing status and income. You can use an online calculator to determine which bracket you belong in.

As of 2024, Arizona has a flat individual income tax rate of 2.5 percent. This is one of the lowest rates in the nation, joining a growing cohort of states that tax wage and salary income at a single rate rather than using graduated or tiered income tax rates. The new rate applies to taxable income earned in 2023, which is reported on state income tax returns filed in 2024. The tax return filing deadline is April 15, typically due around the same time as federal tax returns.

The change to the individual income tax also means that employers have to adjust their state withholding amounts for employees, which will be reflected in paychecks for the rest of the year. Employees who do freelance work or have side businesses may want to talk to their employers about increasing the withholding amount so they can keep more of their own money.

How to Pay Arizona State Income Tax?

Arizona state income tax returns can be filed online, streamlining the filing process and saving businesses time compared to traditional paper filing. This method also reduces paperwork and mailing costs while allowing you to monitor the status of your submission in real-time. Some e-filing platforms offer helpful resources and guidance for Arizona state income taxes, helping you accurately complete your returns.

You can make Arizona state income tax payments directly to the state using an online system provided by the Department of Revenue. Payments are processed almost instantly and are date/time stamped upon completion. The department accepts both debit and credit card payments. If you are unable to pay your state taxes in full, you may be eligible for an installment agreement with ADOR. However, you must file your return on time and pay all outstanding taxes to maintain an installment agreement. Failure to do so will result in penalties such as wage garnishments and levies on bank accounts.

Arizona State Income Tax Exemption
Arizona State Income Tax 1

Arizona State Income Tax Exemption

The Arizona state income tax exemption is a valuable way to reduce your state taxes. It’s different from a tax deduction because it reduces your overall tax liability, regardless of the amount of state taxes withheld during the year.

Arizona’s exemption is based on your gross income, filing status, and residency. Depending on your circumstances, you may also be eligible for a tax credit. For example, if you contribute to a 401(k) or put money into a flexible spending account (FSA), these will be deducted pre-tax from your paycheck. This will lower your taxable income and can help you save on taxes until retirement.

Other ways to save on Arizona taxes include taking advantage of a state tax credit or making charitable contributions. The IRS and the state of Arizona have recordkeeping requirements for charitable donations, so be sure to keep receipts. A financial advisor can help you understand how taxes fit into your financial goals.

Arizona State Income Tax Due Dates

The due dates for Arizona state income tax depend on whether you file electronically or by paper and whether you file an extension:

Individuals:

  • April 15th: This is the general due date for filing your Arizona state income tax return if you do not file an extension.
  • October 15th is the extended due date if you file an electronic extension (Form 204) by April 15th.
  • October 17th: This is the extended due date if you file a paper extension (Form 204) by April 15th.

Corporations:

  • 15th day of the 4th month after the close of the taxable year: This is the general due date for corporations to file their returns.
  • Extension: Corporations can request an extension by filing Form 8866. The extended due date is three months from the original due date.

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