Arizona Nonresident Filing Requirements: Income, Forms, and Deadlines

If you live outside Arizona but earned money from Arizona sources, you generally meet the Arizona nonresident filing requirements when your Arizona-source income exceeds a prorated version of the standard filing threshold, or when any Arizona tax was withheld from a payment to you. Arizona taxes nonresidents only on the slice of income tied to activities or property inside the state, and the threshold, deductions, and calculations all get scaled to match that slice.

Who Counts as a Nonresident

You are a nonresident if your permanent home (your domicile) stayed in another state for the entire tax year. If you moved into or out of Arizona at any point during the year, you are a part-year resident instead, and you file Form 140PY rather than Form 140NR. That distinction changes what gets taxed: part-year residents owe Arizona tax on everything they earned while living in the state plus any Arizona-source income earned during the rest of the year. Nonresidents owe only on Arizona-source income, no matter when it was earned.¹

When You Have to File

Arizona starts with the same gross income thresholds it applies to residents, then requires nonresidents to prorate them. For the 2025 tax year (returns due April 2026), the base amounts are $15,750 for single or married filing separately, $31,500 for married filing jointly, and $23,625 for head of household.

To find your personal filing threshold, multiply the base for your filing status by your income ratio: Arizona gross income divided by federal adjusted gross income. If your Arizona gross income tops the prorated figure, you must file Form 140NR.²

File anyway, even below the threshold, if any Arizona income tax was withheld from your wages or other payments. Filing is the only way to recover it as a refund.³

How the Proration Works in Practice

Take a single filer with $100,000 of federal AGI and $5,000 of Arizona gross income. Multiply $15,750 by 5,000/100,000 and the prorated threshold comes out to $787.50. Since $5,000 exceeds $787.50, a return is required. The smaller your Arizona share relative to your total income, the lower this threshold drops, which is why even modest Arizona earnings can pull you into the filing system.

What Counts as Arizona-Source Income

Arizona gross income for a nonresident is the portion of federal AGI that comes from sources inside the state. What matters is where the income-producing activity happened, not where the check was cut or where your employer sits.⁴

Wages and Personal Services

Pay for work you physically did in Arizona is Arizona-source income, regardless of your employer’s location. Thirty working days spent in Arizona for a Texas-based company means the wages tied to those thirty days are taxable here. The rule covers all personal service income, including fees earned by attorneys, accountants, engineers, and other professionals for work performed in the state, even those not regularly doing business in Arizona.⁵

Real Estate and Tangible Property

Rental income from an Arizona property, capital gains from selling Arizona real estate, and any other income tied to physical property in the state count as Arizona-source. Where the transaction closed and where you live make no difference.⁵

Business Income

If you run a business or hold an interest in a partnership or S corporation doing business in Arizona, the portion of income allocable to Arizona activity is Arizona-source. When the business operates in more than one state, income gets apportioned using rules that look at factors like sales, payroll, and property inside Arizona. The pass-through entity reports each nonresident owner’s share on a Schedule K-1(NR), which flows onto your Form 140NR.

Interest, Dividends, and Investment Income

Passive investment income (interest, dividends, and capital gains on stocks, bonds, and bank accounts) is generally not Arizona-source income for a nonresident. It stays taxable in your home state. The exception involves intangibles tied to Arizona business activity: royalties for the use of patents, copyrights, trademarks, or franchises within the state are specifically Arizona-source.⁵

Military Spouse Exemption

Under the federal Military Spouses Residency Relief Act, a nonresident military spouse can be entirely exempt from Arizona income tax on wages earned in the state. Three conditions all have to hold: the service member is stationed in Arizona under military orders, the spouse is in Arizona only to be with the service member, and the spouse shares the service member’s state of legal residence, which cannot be Arizona. A qualifying spouse can give their employer a withholding exemption certificate to stop Arizona withholding. If tax was already withheld earlier in the year, file Form 140NR to claim the refund.

How the Tax Gets Calculated

Once filing is required, the math runs in three steps: identify your Arizona AGI, prorate your deductions, and apply the rate.

Your Arizona AGI is the total of the Arizona-source income described above. Divide that by your federal AGI to get your income ratio. That ratio governs how much of your standard or itemized deductions you can claim.

Prorated Deductions

For 2025, Arizona’s standard deduction is $15,750 for single and married filing separately, $31,500 for married filing jointly, and $23,625 for head of household. Filers 65 or older get higher amounts. Nonresidents multiply the deduction by the income ratio. If your Arizona AGI is 10% of your federal AGI, you claim 10% of the standard deduction for your filing status.²

You can itemize on your Arizona return even if you took the standard deduction federally.⁶ The same proration rule applies to itemized amounts, reported on Schedule A(NR) attached to your 140NR.⁷

The Rate

Subtract the prorated deductions from your Arizona AGI and you have Arizona taxable income. Arizona applies a flat 2.5% to that figure regardless of filing status or income level.⁸

Estimated Tax Payments

Nonresidents whose Arizona gross income clears certain levels must make quarterly estimated payments, especially when no employer is withholding Arizona tax. This is common for nonresidents with Arizona rental income or business distributions. You need to make estimated payments during 2026 if your Arizona gross income exceeded $75,000 in 2025 ($150,000 for married filing jointly) and you expect to top the same figure in 2026.⁹

Payments go in on Form 140ES or through AZTaxes.gov, on the following schedule:

First quarter: April 15, 2026
Second quarter: June 15, 2026
Third quarter: September 15, 2026
Fourth quarter: January 15, 2027

Skipping required payments triggers an underpayment penalty. No penalty applies if your total Arizona tax liability on the return, minus withholding and credits, is under $1,000.¹⁰

Forms, Deadlines, and How to Submit

Form 140NR is the primary return. You use it to report Arizona-source income, run the proration, and compute the tax. Itemizers attach Schedule A(NR).²

For calendar-year filers, the deadline is April 15, matching the federal deadline. Filing Form 204 gets you an automatic six-month extension to October 15. The extension gives you more time to file, not more time to pay. Any tax owed still has to be in by April 15 to avoid late-payment penalties.¹¹

You can file electronically through approved tax software or through AZTaxes.gov, and you can authorize a direct debit at the same time. Payments can also be made separately at AZTaxes.gov by e-check, debit card, or major credit card.¹² Paper filers use different Phoenix P.O. boxes depending on whether a payment is enclosed; the correct address is printed in the Form 140NR instructions.¹³

Penalties If You Miss the Deadline

Arizona’s late-filing and late-payment penalties run at the same time and stack fast.

Late filing: 4.5% of the tax due for each month or partial month the return is late.
Late payment: 0.5% of the unpaid tax for each month or partial month the payment is late.
Extension underpayment: if you file under an extension but haven’t paid at least 90% of the tax shown on your return by April 15, a 0.5% monthly penalty applies to the unpaid amount.
Interest: unpaid tax also accrues interest from the original due date until paid, at the federal underpayment rate.

The penalties overlap. A nonresident who files three months late with an unpaid balance faces both the 4.5%-per-month filing penalty and the 0.5%-per-month payment penalty for those same three months, plus interest. Filing on time, even if you can’t pay the full balance, cuts out the largest of the three.¹⁴

1
Arizona Department of Revenue. Determining Filing Status for Nonresidents and Part-Year Residents
2
Arizona Department of Revenue. Arizona Nonresident Personal Income Tax Booklet
3
Arizona Department of Revenue. Arizona Form 140NR Nonresident Personal Income Tax Return Instructions
4
Arizona Legislature. Arizona Revised Statutes Title 43-1091 – Gross Income of a Nonresident
5
Legal Information Institute. Arizona Administrative Code R15-2C-601 – Income of a Non-Resident
6
Arizona Legislature. Arizona Revised Statutes Title 43-1042 – Itemized Deductions
7
Arizona Department of Revenue. Itemized Deductions for Nonresidents Form
8
Arizona Department of Revenue. Individual Income Tax Highlights
9
Arizona Department of Revenue. Arizona Form 140ES Estimated Tax Booklet
10
Arizona Legislature. Arizona Revised Statutes Title 43-581 – Payment of Estimated Tax
11
Arizona Department of Revenue. Arizona Form 204 Filing Extension for Individuals
12
Arizona Department of Revenue. Make a Payment Online
13
Arizona Department of Revenue. Mailing Addresses
14
Arizona Department of Revenue. Filing Notices of Penalties and Interest