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Arizona taxes at a glance (2026)

Arizona has a flat 2.50% income tax with a standard deduction of $16,100 (single) / $32,200 (married). Arizona uses a flat 2.5% individual income tax rate on all taxable income (fully phased in from 2023; lowest flat rate among states with an income tax). Standard deduction is tied to the FEDERAL standard deduction; per IRS 2026 inflation adjustments (incl. OBBBA): $16,100 single/MFS, $32,200 MFJ, $24,150 head of household. (The 2025 federal amounts were $15,750/$31,500/$23,625.) No local/city income taxes. Social Security benefits are fully exempt (subtracted from federal AGI). Up to $2,500 of US government, Arizona state/local government, and qualifying military/uniformed-services retirement pay is excludable; active-duty military pay and certain military retirement/survivor benefits are fully exempt. Personal/dependent exemptions were replaced by a $100-per-dependent tax credit. Taxpayers may itemize (largely conforming to federal itemized deductions) instead of taking the standard deduction. A charitable-contribution subtraction is available for those who take the standard deduction.