Individual Income Tax Highlights
Due date for Calendar Year Filers
Your 2022 individual income tax return is due by midnight on April 15, 2023. Because April 15, 2023 falls on a weekend, and April 17, 2023 falls on a federal holiday, you have until Tuesday, April 18, 2023 to timely file your 2022 tax return. If you file under a valid extension, your extended due date to file your income tax return is October 15, 2023. Because October 15, 2023 falls on a weekend, you have until Monday, October 16, 2023 to timely file your 2022 tax return.
2022 Changes to Income Tax Forms
Due to recent modifications to Forms 140, 140NR and 140PY certain additions and subtractions (adjustments to Arizona Gross Income) have been moved from pages 1 and 2 to pages 5 (additions) and page 6 (subtractions).
2022 Individual Filing Threshold
The filing threshold used to determine if a taxpayer must file an Arizona individual income tax return was adjusted for inflation.
The filing threshold is based on a taxpayer’s filing status and federal gross income excluding certain income that Arizona does not tax. A taxpayer must file if they are:
- Single and gross income is more than $12,950;
- Married filing joint and gross income is more than $25,900;
- Married filing separate and gross income is more than $12,950; and
- Head of Household and gross income is more than $19,400.
For more information and income that is excluded, see the table, Arizona Filing Requirements, provided on page 1 of the instructions for the income tax form you are filing.
2022 Arizona Standard Deduction Amounts Adjusted
The 2022 Arizona standard deduction amounts are:
- $12,950 for a single taxpayer or a married taxpayer filing a separate return;
- $25,900 for a married couple filing a joint return; and
- $19,400 for individuals filing a head of household return.
Change to Standard Deduction Increase for Charitable Contributions Computation
For taxpayers who do not itemized deductions on their 2022 Arizona income tax return and elect to take the standard deduction, the allowable Standard Deduction Increase was modified. For tax year 2022, the allowable portion of your charitable contributions used to compute your Standard Deduction Increased was increased from 25% to 27% of the qualified charitable contributions made during the tax year. Taxpayers must complete page 3 of their personal income tax form to claim the Standard Deduction Increase. (Arizona Form 140, Form 140PY or Form 140NR)
2022 Individual Income Tax Rates
For 2022, Tax Tables X & Y were adjusted for inflation. Taxpayers with taxable income more than $50,000 must use Tax Tables X and Y to compute their tax liability. Part-year residents and nonresidents must also use Tax Tables X and Y to compute their 2022 tax liability regardless of their taxable income.
The 2022 Optional Tax Table (for Arizona resident taxpayers with taxable income less than $50,000) was also adjusted for inflation. To determine your tax liability, see the Optional Tax Table.
2022 Arizona Small Business Income (SBI) Tax
The tax rate applicable to small business taxable income reported on Forms 140-SBI, 140PY-SBI or Form 140NR-SBI was reduced from 3.5% in 2021 to 3.0% for 2022.
Credit for Contributions to Private School Tuition Organizations (Form 323)
The allowable current year credit for contributions to private school tuition organizations was adjusted for inflation purposes. For 2022, the maximum current year credit is:
- $623 for single or head of household taxpayers;
- $1,245 for married taxpayers filing a joint return; and
- $623 for married taxpayers filing a separate return.
Credit for Contributions Made to Certified School Tuition Organizations (Form 348)
The allowable current year credit for contributions to a certified school tuition organization was adjusted for inflation purposes. For 2022, the maximum current year credit is:
- $620 for single and head of household taxpayers;
- $1,238 for married taxpayers filing a joint return; and
- $620 for married taxpayers filing a separate return.
Repealed Individual Tax Credits
Beginning with tax year 2022, the following income tax credits have been repealed. Taxpayers who claimed either of these credits and established unused carryover amounts from prior tax years, may still claim the carryover amounts for the remaining 5-year carryover period allowed by the credit.
- Pollution Control Credit (Form 315)
- Employment by a Healthy Forest Enterprise Credit (Form 332)
New Individual Tax Credits
Affordable Housing Tax Credit (Form 354)
Beginning with tax year 2022, Arizona allows an individual taxpayer to claim a nonrefundable tax credit for projects in this state that qualify for the federal low-income housing tax credit under section 42 of the Internal Revenue Code (IRC) that are placed in service from and after June 30, 2022 in an amount equal to at least fifty-percent (50%) of the amount of the federal credit allowed in each taxable during the federal credit. Arizona Revised Statute § 43-1074
The tax credit may be claimed on either the individual’s personal income tax return (Form 140, 140NR or 140PY) or the Small Business Income tax return, if filing. (Form 140-SBI, 140NR-SBI or 140PY-SBI)
For more information, see Credit Form 354 and instructions.
Pass-Through Entity (PTE) Tax (Credit Form 355)
Beginning with tax year 2022, Arizona allows an individual partner or an individual shareholder of a partnership/S Corporation a nonrefundable tax credit for the taxes paid by the PTE on the individual’s behalf for their share of the income distributed to the partner/shareholder. If the allowable credit exceeds the taxes otherwise due on the claimants income, or if there are no taxes due, the amount of the claim not used to offset taxes may be carried for not more than five consecutive taxable years as a credit against subsequent years’ income tax liability. Arizona Revised Statute § 43-1077
For more information, see Credit Form 355, Credit for Entity-Level Tax, and instructions.
An individual taxpayer who claims the allowable PTE tax credit, must also adjust their Arizona gross income by adding the amount of the tax payment made by the PTE for which the tax credit is claimed.
A taxpayer who is claiming this credit on their personal income tax return, the add-back adjustment is reported on page 5, “Other Additions to Arizona Gross Income” and included in the total amount reported on the income tax return. Arizona Revised Statute § 43-1021.