Results are estimates for educational purposes only. Based on 2026 IRS federal brackets and Arizona state tax rates. Always consult a qualified tax professional.
Arizona income tax overview
Arizona dramatically simplified its income tax system in 2023, moving to a flat rate of 2.5% — one of the lowest flat income tax rates in the country. Previously Arizona had a progressive system with rates up to 4.5%. The switch to 2.5% flat has made Arizona increasingly competitive for individuals and businesses relocating from higher-tax states, particularly California. The Phoenix metro area has seen massive population growth driven partly by this tax advantage combined with lower housing costs than California. Arizona conforms closely to federal tax rules, making it simpler to file than many states.
2026 Arizona income tax rates
Tax rate
Income range (single filer)
2.5% flat
All taxable income — 2026
Worked example: $75,000 salary in Arizona
A $75,000 salary in Arizona results in approximately $1,875 in state income tax (2.5% flat), plus $12,580 federal tax, $4,650 Social Security, and $1,088 Medicare. Annual take-home is approximately $54,807, or $2,108 bi-weekly.
Key facts: 2.5% flat rate · One of lowest state income tax rates in US · No local income tax
Frequently asked questions — Arizona income tax
Arizona transitioned to a 2.5% flat income tax effective January 1, 2023, after voters passed Prop 208 (a high-earner surtax) which was later struck down, leading the legislature to accelerate flat tax reform instead.
Arizona does not tax Social Security benefits received by residents, making it friendly for retirees on fixed incomes.
A California resident earning $150,000 pays roughly $11,000+ in state income tax. In Arizona they pay $3,750 at 2.5% — saving over $7,000 per year. Combined with lower housing costs, the financial advantage is significant.
No. Arizona cities and counties do not levy local income taxes. Phoenix, Tucson, and other cities have no city income tax.
No. Arizona has no estate tax or inheritance tax, making it attractive for wealth transfer planning.
Compare Arizona to other states
Use our US income tax calculator to compare your take-home pay across all 50 states. You may be surprised how much location affects your net income.