Arizona has made the following changes to the tax laws for the 2019 tax year:
2019 Individual Income Tax Brackets Adjusted – The Arizona individual income tax brackets and the Optional Tax Table have been adjusted for inflation. Tax table X and Y brackets were reduced from five to four brackets from the previous year.
Personal and Dependent Exemptions – The personal and dependent exemptions were repealed for tax years beginning from and after December 31, 2018.
Other Exemptions – A Taxpayer may continue to claim a $2,300 exemption for each person over age 65 no matter the relationship to the Taxpayer, as long as the Taxpayer pays at least $800 toward the person’s medical costs or nursing/residential care institution. A $2,300 exemption may also be claimed for a stillborn child.
2019 Arizona Standard Deductions Adjusted – The 2019 Arizona standard deduction amounts are:
- $12,200 for a single taxpayer or a married taxpayer filing a separate return;
- $24,400 for a married couple filing a joint return;
- $18,350 for individuals filing a head of household return.
Increased Standard Deduction for Charitable Contributions – Certain taxpayers may increase the allowable standard deduction equal to 25% of the total amount of the taxpayer’s charitable deduction that would have been allowed if the taxpayer elected to claim itemized deductions. This increase is not available to taxpayers filing Form 140A or 140EZ.
Arizona Lottery Winnings – The allowable $5,000 subtraction for Arizona Lottery winnings was repealed.
Dependent Tax Credit – Taxpayers may claim a dependent tax credit for individuals that qualify as dependents for federal purposes. The amount of the credit is $100 for each dependent under the age of 17 and $25 for each dependent who is age 17 or over. The total amount of the allowable credit is reduced for taxpayers whose federal adjusted gross income is $200,000 or more (single, married filing separate, or head of household) and $400,000 or more (married filing joint).
Pension for Retired/Retainer Pay of Uniformed Service Subtraction - A taxpayer who receives benefits, annuities, and pensions as retired/retainer pay of the uniformed services of the United States may each subtract the amount received or $3,500, whichever is less. If a married couple file a joint return and both spouses receive such payments, each spouse may subtract up to $3,500.
Credit for Contributions to Qualifying Charitable Organizations(form 321) - Recent legislation expanded the credit for contributions to include qualifying charitable organizations that spend at least 50% of their budget on services to all individuals (previously limited to children) who have a chronic illness or physical disability and who are residents of Arizona
Credit for Contributions Made or Fees Paid to Public School Tuition Organizations(form 322) - Recent legislation also expanded the use of qualifying contributions made after June 30, 2019 through June 30, 2022 to include acquisition of capital items, community school meal programs, student consumable health care supplies, and playground equipment and shade structure for playground equipment.
Credit for Contributions to Private School Tuition Organizations(form 323) - The allowable current year credit for contributions to private school tuition organizations was adjusted for inflation purposes. For 2019, the maximum current year credit is:
- $569 for single and head of household taxpayers
- $1,138 for married taxpayers filing a joint return
Credit for Contributions Made to Certified School Tuition Organizations(form 348) - The allowable current year credit for contributions to a certified school tuition organization was adjusted for inflation purposes. For 2019, the maximum current year credit is:
- $566 for single and head of household taxpayers
- $1,131 for married taxpayers filing a joint return
For more information, please review the Arizona Instructions for Form 140, here.