- Arizona's individual income tax is a flat 2.5%.
- You can subtract 25% of net long-term capital gains from assets acquired after December 31, 2011.
- Effective rate on long-term crypto gains: about 1.875%. Short-term gains pay the full 2.5%.
- Arizona starts from federal AGI, so federal rules decide what's taxable.
- In 2025, Arizona passed a law letting the state keep unclaimed crypto in its original form, a step toward a state crypto reserve.
How Arizona Taxes Crypto
Arizona starts with your federal adjusted gross income. That already includes crypto gains from Form 8949 and Schedule D, and crypto income such as staking rewards. After Arizona's additions and subtractions, the result is taxed at a flat 2.5%.
Arizona is one of the few states with a capital gains break: it allows a subtraction of 25% of net long-term capital gain included in federal income, for assets acquired after December 31, 2011. Bitcoin you bought in 2012 or later and held more than a year qualifies. The subtraction is claimed on Arizona Form 140.
Arizona Crypto Tax Calculator (2026)
Free crypto tax calculator for Arizona: estimate the federal capital gains tax and Arizona state tax on a crypto sale, using 2026 tax brackets.
Example
Bought crypto for $5,000 and sold it for $8,000 after holding it more than a year. Single filer, $60,000 income: $3,000 long-term gain, estimated federal tax about $0 because the whole gain falls in the 0% long-term bracket (2026 brackets). Arizona adds about $56.
Enter your own numbers and press "Calculate my crypto tax". Nothing you type leaves your browser.
Estimate only. Not tax advice.
How to report a crypto sale on Form 8949 →How this calculator works, with worked examples →
Arizona Rates for Crypto
| Type of gain | Arizona treatment | Effective Arizona rate |
|---|---|---|
| Short-term (held one year or less) | Fully taxed | 2.5% |
| Long-term, acquired after 2011 | 25% subtracted, 75% taxed | ~1.875% |
| Staking, mining, airdrop income | Ordinary income | 2.5% |
Worked Examples
Example 1: a $20,000 long-term gain
Arizona subtracts 25% ($5,000), leaving $15,000 taxed at 2.5%: $375. Federal tax at 15% is $3,000.
Example 2: a $20,000 short-term gain
No subtraction applies, so Arizona tax is $20,000 × 2.5% = $500. The federal bill is higher too, at ordinary rates.
Example 3: long-term gains with a loss
The subtraction is based on your net long-term capital gain. If you have a $20,000 long-term gain and an $8,000 long-term loss, the subtraction is 25% of $12,000, or $3,000. Short-term losses can reduce the net figure as well, so check the Form 140 instructions for the calculation.
What's Taxable in Arizona
- Selling crypto for dollars, swapping coins, and spending crypto are taxable disposals.
- Staking, mining, and airdrop rewards, and crypto pay, are income when received.
- Buying with dollars, holding, and moving between your own wallets aren't taxable.
Arizona and Crypto Policy
In 2025, Arizona enacted HB 2749, which lets the state hold unclaimed digital assets in their original form instead of selling them. This effectively creates a small state crypto reserve. It doesn't change how individuals are taxed.
How to File
- Complete your federal Form 8949 and Schedule D.
- File Arizona Form 140. Your federal AGI carries crypto gains in.
- Claim the net long-term capital gain subtraction for assets acquired after 2011. Keep purchase records that prove the acquisition dates.
- Make estimated payments if a large gain leaves you under-withheld.
Federal + Arizona Combined Crypto Tax Rate
The rate that matters is the combined rate on your next dollar of crypto gain: federal plus state. The table shows approximate 2026 rates for a single filer at two income levels. Arizona's 2.5% applies to short-term gains; the 25% long-term subtraction makes it about 1.875% on long-term gains.
| Taxable income (single) | Short-term gain (held ≤ 1 year) | Long-term gain (held > 1 year) |
|---|---|---|
| $60,000 | 24.5% | 16.9% |
| $250,000 | 38.3% | 20.7% |
Federal: 22% / 15% at $60,000, and 32% / 15% plus the 3.8% Net Investment Income Tax at $250,000, from the IRS 2026 brackets. Marginal rates only. Your average rate on the whole gain can be lower. See our federal crypto tax guide for the full brackets.
Arizona Crypto Tax FAQ
What is Arizona's tax rate on crypto?
Arizona taxes crypto gains at its flat 2.5% income tax rate. For long-term gains on assets acquired after 2011, 25% of the net gain can be subtracted, giving an effective rate of about 1.875%.
Does the Arizona capital gains subtraction apply to Bitcoin?
Generally yes, if the Bitcoin was acquired after December 31, 2011 and held more than one year, so the gain is long-term. The subtraction is 25% of your net long-term capital gain included in federal income.
Is crypto staking income taxed in Arizona?
Yes. Staking rewards are income when you gain control of them. They flow into Arizona income through your federal AGI and are taxed at 2.5%.
What is the combined federal and Arizona tax rate on crypto?
For a single filer with $60,000 of taxable income, the combined federal and Arizona rate on additional crypto gains is about 24.5% short-term and 16.9% long-term in 2026. At $250,000, including the 3.8% Net Investment Income Tax, it is about 38.3% short-term and 20.7% long-term.
Written by Asad Shaikh
Founder of StartCryptoNow. Nine years researching, trading, and teaching crypto; BSCS from Virtual University of Pakistan. Every tax figure is checked against IRS and state revenue publications. Our editorial policy.