Governor Brewer's Office of Economic Recovery Az.gov

State Agencies

Agency Contact Info

Anthony Forschino, Public Information Officer
email: AForschino@azdor.gov
phone: 602-716-6921
url: www.azdor.gov

Arizona Department of Revenue

Agency Plan

Impact of Stimulus on Arizona Withholding (PDF)

 

AMERICAN RECOVERY AND REINVESTMENT TAX ACT OF 2009

Provision Summary Arizona Impact
Income Tax Reduction via Withholding (Making Work Pay Credit) Provides a credit equal to 6.2% of earned income or $400 per taxpayer in 2009 and 2010. The credit is implemented through a reduction in federal withholding. Revenue reduction in state withholding due to reduction in federal withholding (state rates tied to federal withholding). Federal withholding adjustment begins 4/1/09.
New Car Deduction Provides an individual income tax deduction (both standard and itemized deductions) for sales taxes paid on the purchase of new vehicles valued at $49,000 or less in 2009. Will reduce state taxable income due to increased itemized deductions (adjusted standard deduction does not flow through to state).
Suspend Taxation of Unemployment Benefits Temporarily excludes up to $2,400 of unemployment compensation from gross income in 2009 Will reduce FAGI and therefore reduce state taxable income.
Bonus Depreciation/Small Business Expensing (Section 179) Extends the increased bonus depreciation and Section 179 expensing through 12/31/09. Arizona does not conform to bonus depreciation or Section 179 expensing and therefore no revenue impact.
Alternative Minimum Tax Patch Raises the AMT exemption amounts for 2009. Not included in FAGI and therefore does not impact state individual income tax.
Child Tax Credit Provides a temporary increase in the refundable portion of the child tax credit for 2009 and 2010. Not included in FAGI and therefore does not impact state individual income tax.
Energy Tax Credits Various energy incentive credit changes (Residential Energy Property Credit, Residential Energy Efficient Property Credit, Alternative Fuel Pump Credit, Renewable Electricity Production Credit, Energy Investment Credit, and Plug-in Electric Vehicles). Not included in FAGI and therefore does not impact state individual income tax.
Higher Education Tax Credit Temporarily increases the credit amount and phase-out level in 2009 and 2010. Makes a portion of the credit refundable. Not included in FAGI and therefore does not impact state individual income tax.
First-Time Home Buyer Credit Raises the credit amount and eliminates the required repayment to the IRS after 36 months in the home. Not included in FAGI and therefore does not impact state individual income tax.
Earned Income Tax Credit Provides a temporary increase in the EITC for 2009 and 2010. Not included in FAGI and therefore does not impact state individual income tax.