Phoenix, Arizona—The Arizona Department of Revenue would like to inform taxpayers of the annual adjustments to Arizona’s standard deduction, new tax credit, and reduced small business income tax rate for the 2022 tax year. The 2022 tax year adjustment is generally used for tax returns filed in 2023.

Due date for calendar year filers
April 15, 2023 is a federal holiday, so taxpayers must Tuesday, April 18, 2023 File your 2022 tax returns.When to submit expansionthe income tax filing deadline will be extended to October 16, 2023, as October 15, 2023 falls on a Sunday.

2022 Arizona Standard Deductions Adjusted for Inflation:

• $12,950 for single taxpayers or married taxpayers filing separate returns.
• $25,900 for married couples filing joint returns.When
• $19,400 for individuals filing the Head of Household Declaration.

The standard deduction can be increased to 27% of the charitable deduction that taxpayers would claim if they itemized the deduction. This increase cannot be claimed on Form 140EZ or 140A.

Updated Arizona Form A-4
Arizona personal income tax withholding slip (Arizona Form A-4) has been updated to reflect Arizona’s lower personal income tax rate. All Arizona employers must make this form available to their Arizona employees by January 31, 2023. The new A-4 form has seven new withholding rate boxes (0.5%, 1.0%, 1.5%, 2.0%, 2.5%, 3.0%). , 3.5%) while retaining both the zero withholding rate option and the line of additional Arizona withholding. If the employee does not complete the new A-4 form, the default rate will be 2.0% for her. Please do not send these withholding forms to the Ministry. Employers and employees must keep it with their tax records.

2022 Individual Income Tax Classes
In 2022, the personal income tax rate will be adjusted for inflation and reduced to two rates.

Table X – Use Table X if your application status is Single or Married.

Table Y – Use Table Y if your application status is Marriage Filing Community or Head of Household

Arizona Small Business Income Tax (SBI) Tax
Beginning with tax year 2021, individuals may elect to report small business income on Arizona Form 140-SBI, Small Business Income (SBI), for small business income included in Federal Adjusted Gross Income. SBI tax returns must be timely filed along with regular income tax returns. The tax rate applicable to small business taxable income reported on Form 140-SBI, 140PY-SBI or Form 140NR-SBI has been reduced from 3.5% in 2021 to 3.0% in 2022.

Discontinued Personal Tax Credit
Effective from tax year 2022, the following personal income tax credits have been eliminated:

• Pollution Prevention Credit (Form 315)
• Employment through Sound Forest Business Credit (Form 332)

Affordable Housing Tax Credit (Form 354)
In Arizona, beginning tax year 2022, individual taxpayers may qualify for the federal low-income housing tax credit under Section 42 of the Internal Revenue Code on projects in the state that are servicing after June. You can claim a non-refundable tax credit for anything that starts. On 30 March 2022, an amount equal to at least 50% of the federal deduction allowed for each tax year during the federal deduction period.

The tax credit is claimed either on the individual’s Personal Income Tax Return (Form 140, 140NR or 140PY) or on the Small Business Income Tax Return (Form 140-SBI, 140NR-SBI or 140PY-SBI) if filed can.

Pass-Through Entity (PTE) Tax (Credit Form 355)
Beginning tax year 2022, Arizona will provide individual partners or individual shareholders of a partnership/S corporation with a non-refundable tax credit for taxes paid by the PTE on behalf of the individual on a portion of the income distributed to the partner/shareholder. I admit If the allowable deduction exceeds the tax payable on the claimant’s income, or if there are no taxes owed, the claim amount not used to offset the tax shall be credited for not more than five consecutive tax years. , can be included as a deduction for the following year. Income tax liability.

Individual taxpayers claiming a permissible PTE tax credit must adjust their Arizona gross income by adding the amount of the PTE tax for which the tax credit is claimed. Taxpayers must report additional adjustments in “Other Additions to Arizona Gross Income” on page 5 and include them in the total reported on their income tax returns.

See below for other tax changes, including increases to certain tax credits. personal income highlights.

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