Flat Rate: 2.5%No Local Income TaxLowest Flat Rate TiedLast reviewed June 2026

Arizona State Income Tax 2026

Arizona's flat income tax rate is 2.5% for 2026, applied to all taxable income. This is the second-lowest flat rate among US states that levy income tax, behind only North Dakota's 1.95%. Arizona converted from graduated brackets to flat in 2023 after a 2021 law (SB 1828) phased the change in with revenue triggers.

Arizona 2026 Quick Facts

Tax type	Flat 2.5%
Marginal rate	2.5% on all income
Effective rate at $75K	~2.1% after standard deduction
Effective rate at $100K	~2.2%
Standard deduction (single)	Conforms to federal ($15,000 est. 2026)
Standard deduction (MFJ)	Conforms to federal ($30,000 est. 2026)
Local income tax	None
Reciprocity agreements	California, Indiana, Oregon, Virginia
Social Security taxed	No
Military pension taxed	No (fully exempt)
2026 changes	Rate held at 2.5% (flat since 2023)

2026 Arizona Income Tax Brackets

Rate	Single Filer Income	Married Filing Jointly
2.5%	All taxable income	All taxable income

Sources: Arizona Department of Revenue (azdor.gov), Tax Foundation 2026 State Tax Guide, IRS Publication 17. Data verified May 2026.

Arizona Effective Rate Calculator

Annual Gross Income

Filing Status

Standard deduction: $15,000 applied before tax calculation.

Effective Rate

2.00%

State Tax Due

$1,500

Marginal Bracket

2.5%

State income tax only. Does not include federal income tax, Social Security, Medicare, or local income tax. Calculations are estimates for educational purposes. Verify with a licensed CPA before filing.

What You Actually Pay: Worked Examples

$50,000 income

State tax due$875

Effective rate1.8%

Marginal bracket2.5%

After state tax$49,125

$75,000 income

State tax due$1,500

Effective rate2.0%

Marginal bracket2.5%

After state tax$73,500

$100,000 income

State tax due$2,125

Effective rate2.1%

Marginal bracket2.5%

After state tax$97,875

$250,000 income

State tax due$5,875

Effective rate2.4%

Marginal bracket2.5%

After state tax$244,125

Single filer, standard deduction. Does not include federal tax, Social Security, or Medicare.

Local Income Tax in Arizona

Arizona does not have a personal local income tax. No city or county in Arizona, including Phoenix, Tucson, Mesa, Scottsdale or Tempe, levies an additional income tax on residents or workers.

Combined with the 2.5% state flat rate, this gives Arizona one of the simplest income tax structures in the US. Filing is straightforward because there is no need to track multiple jurisdictions.

See the full local income tax guide for all US cities →

Arizona Filing Requirements

Residents: File Arizona Form 140 if gross income exceeds the filing threshold. Residents are taxed on all income, though Social Security and military pensions are fully exempt.

Part-year residents: File Form 140PY for the portion of the year you lived in Arizona.

Non-residents: File Form 140NR for Arizona-source income only.

Reciprocity: Arizona has reciprocity agreements with California, Indiana, Oregon and Virginia. Residents of those states working in Arizona may file a single return in their home state if eligibility is met.

Filing deadline: April 15. Extensions to October 15 available via Form 204.

Retirement Income Treatment in Arizona

Social Security benefits	Exempt	Arizona does not tax Social Security at any income level
Traditional pension income	Taxed	Taxed at flat 2.5% as ordinary income
Government pension	Partial	Up to $2,500 federal/state/local pension exclusion
Military pension	Exempt	Fully exempt from Arizona state income tax since 2021
401(k) and IRA withdrawals	Taxed	Taxed at flat 2.5% as ordinary income
Roth IRA withdrawals	Exempt	Qualified distributions are tax-free

Arizona is moderately retirement-friendly: Social Security and military pension are fully exempt and the 2.5% flat rate is among the lowest in the country, but traditional pensions and 401(k) distributions are taxed. See the full 50-state retirement income scorecard.

Arizona Income Tax: FAQs

What is Arizona's income tax rate for 2026?

Arizona has a flat income tax rate of 2.5% for 2026. This applies to all taxable income regardless of amount. Arizona transitioned to this flat rate in 2023 from a previous graduated system with rates from 2.59% to 4.5%, one of the most aggressive state-level rate cuts in recent US history.

Does Arizona tax Social Security?

No. Arizona does not tax Social Security benefits. Arizona also does not tax military retirement pay. However, traditional pensions, 401(k) withdrawals and IRA distributions are taxed at the 2.5% flat rate.

Does Arizona have a local income tax?

No. Arizona does not allow cities or counties to levy a personal income tax. The state's flat 2.5% rate is the only income tax in Arizona.

What is Arizona's standard deduction?

Arizona conforms to the federal standard deduction. For 2026, this is approximately $15,000 for single filers and $30,000 for married filing jointly (the 2025 federal figures inflation-adjusted). This is far more generous than most state standard deductions and significantly reduces taxable income for Arizona filers.

How did Arizona's rate get so low?

Arizona passed SB 1828 in 2021, which legislated a transition to a flat 2.5% rate. The transition was tied to revenue triggers but completed faster than expected due to strong revenue growth. Arizona is now tied with the lowest flat-rate income tax burden among states that tax income, second only to North Dakota's 1.95% flat rate.

Sources: Arizona Department of Revenue (azdor.gov), Tax Foundation 2026 State Tax Guide, IRS Publication 17. Data verified May 2026. Not tax advice. Always confirm current figures with the Arizona Department of Revenue or a licensed CPA or Enrolled Agent before filing.