Individuals new to Arizona, or contemplating moving to Arizona, have a few things to consider when it comes to filing taxes. Whether the plan is to be in the state temporarily, or to relocate permanently, individuals want to ensure they are adhering to state tax laws. Taxpayers changing from a non-resident to a resident of Arizona during the taxable year can also deduct moving expenses under federal law. An individual may take a standard deduction or itemize deductions. The standard deduction is indexed annually for inflation.
Other Tax Filing Considerations
For those individuals who sold their homes to relocate to Arizona, there is no specific treatment of gain from the sale of a personal residence in the Arizona statutes. Thus, if the gain is excluded from federal adjusted gross income, it will be excluded from Arizona gross income and not subject to Arizona income tax. However, gains included in federal adjusted gross income will be included in Arizona gross income and subject to Arizona tax.
Arizona is also a community property state, and, according to Arizona Revised Statute (click here), that includes all property acquired by either spouse during marriage. This does not include property acquired by gift or inheritance.
Income Tax Rates and Withholding Rates for Arizona
For income tax rates, please refer to the Optional Tax Tables for the Arizona form used. Taxpayers can find these tables under Forms/Individual on ADOR’s website. Individuals will use the Optional Tax Table and filing status applicable to the tax year.
To access Arizona withholding rates, individuals will refer to the Arizona Form A-4 instructions for the applicable tax period. Please note that Arizona withholding rates may change periodically.
Moving to Arizona Resources
For individuals considering moving to Arizona, or for new residents, here are some important resources to check out: