Arizona Capital Gains Tax (2026)
Arizona taxes capital gains as ordinary income at a flat 2.5% rate. Run your own numbers with the free capital gains tax calculator, which estimates federal, NIIT, and Arizona tax together.
In short: federal long-term rates of 0%, 15%, or 20% apply everywhere. Arizona adds state tax on top, at up to 2.5%.
How Arizona treats capital gains
Arizona taxes capital gains as ordinary income at a flat 2.5% rate. The estimate subtracts Arizona's standard deduction ($8,350 single / $16,700 married).
A worked example
Say you are a single filer in Arizona with $60,000 of taxable income who sells stock held over a year for a $25,000 long-term gain. Federal tax on the gain is $3,750 (all of it lands in the 15% bracket at this income; no NIIT applies below $200,000 MAGI). Arizona adds an estimated $625, for a combined $4,375, an effective 17.5% on the gain. These figures use the same math as the calculator, 2026 federal brackets per IRS Rev. Proc. 2025-32, and state figures from the Tax Foundation's State Individual Income Tax Rates and Brackets, 2026.
Frequently asked questions
Does Arizona tax capital gains?
Yes. Arizona taxes capital gains as ordinary income. Arizona taxes capital gains as ordinary income at a flat 2.5% rate.
What will I pay on a long-term gain in Arizona?
Combined, our worked example ($25,000 long-term gain on $60,000 of income, single) comes to $4,375: $3,750 federal plus $625 Arizona tax, an effective 17.5%.
Do I still owe federal capital gains tax in Arizona?
Yes. Federal capital gains tax (0%, 15%, or 20% long-term, ordinary rates short-term, plus the 3.8% NIIT for high earners) applies no matter your state. The free calculator estimates federal, NIIT, and Arizona tax together.
More
- Every state's capital gains treatment
- Capital gains tax explained: short-term vs long-term
- Neighbors alphabetically: Alaska · Arkansas
This page is general information, not tax, legal, or financial advice. Rates and rules can change and depend on your situation. Confirm details with a tax professional, the IRS, or your state's revenue department.
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