What Is the Current Arizona Income Tax Rate?
Arizona's flat income tax system is more than a single rate. Learn how your final tax liability is determined and the key ways to reduce what you owe.
Arizona residents, and non-residents with income from Arizona sources, are subject to a state income tax. The process involves determining your specific taxable income, applying the state’s tax rate, and then reducing the final amount owed by any available tax credits.
Arizona’s Current Income Tax Rate
Arizona currently has a flat income tax rate of 2.5% for all taxpayers. This system is a change from the state’s previous progressive tax structure, which featured multiple tax brackets with rates that increased as income rose.
The flat tax simplifies the calculation of tax liability, as every dollar of taxable income is treated the same. This rate applies to income earned in the 2024 tax year, which is reported on returns filed in 2025.
Calculating Your Arizona Taxable Income
Calculating your Arizona income tax begins with your federal adjusted gross income (AGI). From there, Arizona allows for specific subtractions and requires certain additions to arrive at Arizona AGI. For most filers, the main calculation involves subtracting deductions and exemptions from their income.
Taxpayers can choose to either itemize their deductions or take the standard deduction. For the 2024 tax year, the Arizona standard deduction is $14,600 for single filers and those married filing separately. For married couples filing a joint return, the standard deduction is $29,200, and for those filing as head of household, it is $21,900.
After applying the appropriate deduction, taxpayers can further reduce their taxable income by claiming personal and dependent exemptions. These exemptions lower the amount of income that is subject to the 2.5% tax rate. The final figure after subtracting all applicable deductions and exemptions is your Arizona taxable income, which is the base amount used to calculate your initial tax liability.
Available Arizona Tax Credits
After calculating your tax liability, you can lower your final tax bill through various tax credits. Unlike deductions, which reduce your taxable income, credits reduce your tax owed on a dollar-for-dollar basis. Arizona offers several non-refundable credits, with some of the most widely used relating to charitable contributions.
One credit is for contributions to Qualifying Charitable Organizations (QCOs), which are non-profits that provide assistance to low-income residents. For the 2024 tax year, single filers can claim a credit of up to $470, while married couples filing jointly can claim up to $938 for these donations. A separate, similar credit exists for contributions to Qualifying Foster Care Charitable Organizations (QFCOs), with maximums of $587 for single filers and $1,173 for joint filers.
Taxpayers can also receive credits for supporting educational institutions. A credit is available for contributions to public or charter schools for extracurricular activities, with a maximum of $200 for single filers and $400 for joint filers. Another credit supports private school scholarships through donations to a School Tuition Organization (STO), capped at $731 for single filers and $1,459 for joint filers.
Contributions for many of these credits can be made up until the tax filing deadline in April of the following year.