People who support the Arizona tax plan say it is a good idea because it makes filing easier. The main benefit is that it will allow workers and small business owners to keep more of their hard-earned money.īut nothing is perfect, and this tax plan comes with both pros and cons. Is the Flat Tax Good?Īccording to Governor Doug Ducey, the state government’s move to a flat individual income tax rate will provide tax relief for residents. The Arizona General Fund revenues amounted to $16.7 billion by 2022, so the state could implement the tax rate in January 2023. Since the state’s economy performed better than expected, the Arizona legislature introduced its lower tax rate one year earlier than planned.Īccording to the state budget, the new tax rate was planned to take effect on January 1, 2024, or when the Arizona General Fund (state revenue surplus) exceeded $12.8 billion. Why Is the New Income Tax Rate Coming a Year Early? Meanwhile, married couples filing a joint return, paid the 2.55% rate for taxable income up to $57,305, and 2.98% for any income over that amount.
Previously (and for the 2022 tax year), Arizonans had to pay one of two tax rates: Single filers with a taxable income of up to $28,652 paid a 2.55% rate, and anyone that made more than that paid 2.98%. Arizona Flat Tax for 2023 and BeyondĪrizona’s income tax for the year 2023 (filed by April 2024) will be a flat rate of 2.5% for all residents. Here’s what you need to know about the changes to Arizona’s state taxes in 2023. The move comes one year earlier than anticipated, which the governor says is due to the state’s continued economic growth. The new Arizona flat tax rate is a tax cut for all Arizona taxpayers, which means employees get to hold on to more of their hard-earned money. Doug Ducey has announced that the state moved to a flat income tax rate on January 1, 2023. The year 2023 brought some good tax news for Arizonians.
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