Federal legislation enacted on March 11, 2021 included a provision to exclude up to $10,200 of unemployment benefits from federal income tax. Arizona later conformed to the tax provisions in the American Rescue Plan Act of 2021, resulting in the same $10,200 of unemployment benefits being excluded from Arizona income tax.

Who is impacted?

Taxpayers can file now and schedule payments up until the deadline.

The Arizona Department of Revenue (ADOR) reminds transaction privilege tax filers that monthly returns are due.  Filing before the deadline is highly encouraged in the event assistance is required.

To effectively administer the state, counties, and cities’ transaction privilege tax, the Arizona Department of Revenue issued Arizona Transaction Privilege Tax Ruling TPR 20-2 on October 6, 2020. In summary, this ruling addresses the issue of conflicting sourcing provisions between the state and city statutes. Ultimately, TPR 20-2 ruled that the state sourcing statutes prevail where they conflict with the city statutes.