Arizona Capital Gains Tax Calculator
Arizona taxes capital gains as ordinary income at the state level, which means a gain on selling shares, property or other investments is added to your other income and taxed using the Arizona income tax brackets, with no separate preferential long-term rate like the federal system provides. This calculator estimates the Arizona state tax on a capital gain by stacking the gain on top of your other taxable income and applying the sourced Arizona Department of Revenue brackets for tax year 2025, then taking the difference. Enter your gain, your other annual taxable income and your filing status to see the state tax attributable to the gain and the effective rate on it. The result is the Arizona state portion only; federal capital gains tax, which has separate short-term and long-term rates set by the IRS, is calculated separately. Because the gain stacks on your other income, the same gain is taxed at a higher rate the more you already earn. Some states provide specific exclusions or preferential treatment for certain gains; this tool uses the standard ordinary-income method and links the Arizona Department of Revenue so you can confirm any special rule that applies to you.
Arizona taxes capital gains as ordinary income. A $20,000.00 gain on top of $60,000.00 of other income (single) adds about $500.00 in Arizona state tax, an effective rate on the gain of 2.50%.
How Arizona taxes capital gains
Arizona taxes capital gains as ordinary income, so the gain is added to your other income and taxed at the Arizona bracket rates.
state tax on gain = state income tax on (other income + gain) - state income tax on (other income)
effective rate on gain = state tax on gain / gain x 100
Arizona capital gains tax: frequently asked questions
How are capital gains taxed in Arizona?
Arizona taxes capital gains as ordinary income at the state level: the gain is added to your other taxable income and taxed using the Arizona income tax brackets published by the Arizona Department of Revenue. This calculator applies those brackets to your gain. Some states provide specific exclusions or rates for particular gains; confirm your situation with the Arizona Department of Revenue.
How much state tax will I pay on a $20,000.00 capital gain in Arizona?
Stacked on $60,000.00 of other income, a $20,000.00 gain adds about $500.00 of Arizona state income tax for a single filer, an effective rate on the gain of 2.50%. Your figure depends on your total income and filing status; enter them above.
Does Arizona have a separate long-term capital gains rate?
Most states, including the default treatment here, tax long-term and short-term capital gains at the same ordinary income rates, unlike the federal system which has preferential long-term rates. Any state-specific exclusion or preferential rate is set by the Arizona Department of Revenue; this calculator uses the ordinary income method and links the source.
What is Arizona's income tax rate?
Arizona taxes all individual taxable income at a flat rate of 2.5%, effective January 1, 2023. This rate applies to all filing statuses and all income levels. It is set in ARS §43-1011 and was locked in place by Arizona Proposition 132, approved by voters in November 2022.
Did Proposition 208 change Arizona income taxes?
Proposition 208 (2020) proposed adding a 3.5% surtax on high incomes (above $250,000 for single filers and $500,000 for joint filers) to fund education. Courts blocked implementation pending challenges, and Arizona voters subsequently passed Proposition 132 in 2022, which requires any future income tax increase to be approved by a 60% legislative supermajority, effectively preventing the Prop 208 surtax. The current flat rate of 2.5% reflects the consolidated rate that replaced the previous graduated schedule.
Does Arizona have a standard deduction?
Yes. Arizona conforms to the federal standard deduction amounts under ARS §43-1041. For 2024, the amounts are $14,600 for single filers and married filing separately, $29,200 for married filing jointly, and $21,900 for head of household. Taxpayers may alternatively itemize Arizona deductions if that results in a lower tax.
What other major taxes does Arizona impose?
Arizona levies a statewide transaction privilege tax (TPT, equivalent to a sales tax) at 5.6% on most retail sales. Cities and counties add local rates, bringing typical combined rates to 8-10%. Arizona also has a corporate income tax (4.9% flat rate) and various excise taxes on fuel, tobacco, and alcohol.
Official sources
- Arizona income tax rates applied to capital gains (tax year 2025): Arizona Department of Revenue, as at Jun 12, 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 25 June 2026. See our methodology. General information, not financial or tax advice. State-specific exclusions, if any, are set by the Arizona Department of Revenue.