Arizona’s income tax is assessed at a rate ranging from 2.59% at the lowest income bracket to 4.54% at the highest income level. There are five income brackets which taxpayers can use to determine their rate of taxation.
Single and Married Filing Separately
- 2.59% on taxable income up to $10,000
- 2.88 % between $10,001 and $25,000 of taxable income
- 3.36 % between $25,001 and $50,000 of taxable income
- 4.24 % between $50,001 and $150,000 of taxable income
- 4.54 % on all taxable income greater than $150,000
Married couples who file jointly and anyone using the head of household status are assessed at the same rates, though the income thresholds are doubled. April 15th is the deadline for all Arizona tax returns unless the date is a weekend or a holiday. In those situations, returns are due on the next business day. Taxpayers are required to abide by Arizona law which states that certain items are considered gross income. For example, interest from municipal bonds outside of the state must be calculated into a taxpayer’s gross income.
Arizona Residents
In Arizona, residency is determined on an individual basis by evaluating all relevant information and circumstances. Typically, there isn’t a hard and fast rule, but the term “resident” can include:
- Someone who is in-state for purposes that are not temporary or transitional
- One who has established a domicile in-state, but may currently be out of state for a temporary period of time. Residents can be absent from Arizona for a temporary time as long as they intend to return to their domicile.
- Anyone who spends a total of nine months or more of the tax year in the state is considered a resident of Arizona. An individual would have to present proof that their purpose in-state is temporary or transitory.
- Some examples of how residency is determined in Arizona:
- A taxpayer is physically present in the state, along with their spouse and any children.
- Vehicle registration
- Driver’s license renewal or surrendering of an old one
- Bank accounts and business records
- Purchase of a home or sale of an old one
- Payment of property taxes
- Payment of state income tax
- Voter’s registration in the new locality
- Use of new permanent address on records and correspondence
Like many other states, Arizona determines residency based on physical location, and intent to either abandon an old residence, or intent to return to current domicile in-state. A new residence can only exist when a former domicile is abandoned and a new one is established.
