Arizona Income Tax Rate

Arizona has a flat 2.5% individual income tax rate for tax year 2026 — one of the lowest flat rates of any state that taxes income. Every Arizona taxpayer pays the same rate regardless of income level.

How Arizona Income Tax Is Withheld

Unlike federal income tax, which uses withholding tables based on your W-4 and income level, Arizona withholding works differently: on Form A-4, you choose a flat percentage of your gross taxable wages to withhold — 0.0%, 0.5%, 1.0%, 1.5%, 2.0%, 2.5%, 3.0%, 3.5%. If you don't submit an A-4 within five days of starting a job, your employer withholds at the default 2.0% rate.

Because Arizona's actual tax rate is 2.5%, choosing a withholding percentage below that (like the 2.0% default) can under-withhold higher earners, meaning you may owe money when you file your Arizona return. Choosing exactly 2.5% keeps your withholding closely matched to your actual liability.

No City or County Income Tax

Arizona does not levy any city or county income taxes anywhere in the state. Whether you work in Phoenix, Tucson, Flagstaff, Mesa, or any other Arizona city, your state income tax liability is the same 2.5% flat rate.

Arizona Tax vs. Federal Tax

Federal income tax is progressive, with seven brackets from 10% to 37% for 2026, plus a standard deduction that varies by filing status ($16,100 for single filers, $32,200 for married filing jointly). Arizona's flat 2.5% tax applies on top of federal tax, with no separate state standard deduction used in the withholding calculation.

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