Arizona imposes personal income tax on residents, part-year residents, and nonresidents according to Arizona law. Part-year residents and nonresidents may be required to file an Arizona income tax return if they meet the filing requirements or have income taxable to Arizona. Arizona taxable income is determined using federal adjusted gross income as a starting point, with Arizona-specific additions, subtractions, deductions, and exemptions applied.
Part-Year Residents
Part-year residents are individuals who were Arizona residents for only part of the tax year. They are generally taxed on all income from all sources received while they were Arizona residents and on income derived from Arizona sources while they were nonresidents.
Arizona allows certain subtractions from income, including 100% of benefits, annuities, and pensions received as retired or retainer pay from the uniformed services of the United States, subject to Arizona law and reporting requirements.
Nonresidents
Nonresidents are generally taxed only on income derived from Arizona sources. This may include wages, salaries, business income, rental income, and other income attributable to Arizona.
Arizona generally does not tax income earned by nonresidents from sources outside Arizona.
Deductions
- Arizona allows taxpayers to claim either the standard deduction or itemized deductions, subject to Arizona law.
- Arizona itemized deductions generally begin with federal itemized deductions and are subject to Arizona-specific modifications and adjustments.
- Arizona's treatment of certain itemized deductions, including medical expenses, may differ from the federal treatment.
- Home mortgage interest, property taxes, and other itemized deductions are generally determined using federal itemized deduction rules, subject to any Arizona-specific adjustments.
Source:
Arizona Department of Revenue - Publication 10
Disclaimer: Always verify details with the current Arizona Department of Revenue forms and instructions, as tax rules may change annually. For complex situations, consult a CPA or tax attorney.