Arizona PTET 2026: deadline, rate, who can elect
Arizona (AZ), tax year 2026, from the same rules the connector returns. Last verified October 24, 2026.
Informational. Not tax advice.
Elective PTET
Yes
For taxable years beginning from and after December 31, 2021, the partners or shareholders of a partnership or S corporation may consent to be taxed at the entity level.
Who can elect
A business treated as a partnership or an S corporation for federal income tax purposes. The election does not apply to partners or shareholders that are not individuals, estates, or trusts, or to those who opt out.
A.R.S. section 43-1014 states those rules.
How the election is made
The partners or shareholders may consent to entity-level tax. The election is made by filing the business's return. The entity must notify each partner or shareholder who is an individual, estate, or trust and allow at least 60 days to opt out. No response, or a waiver, means that owner is included.
A.R.S. section 43-1014 states the consent, the return filing, and the opt-out.
Election deadline
No later than the due date or the extended due date of the partnership return.
The page states that deadline for the partnership election.
Rate
The 2026 Form 120/PTE-W instructions state that the PTE tax rate is 2.5 percent of Arizona taxable income. A.R.S. section 43-1014 states that the rate is the highest rate prescribed by section 43-1011.
The worksheet is titled for 2026. The partnership highlights page stated 2.5 percent for 2025.
Owner relief
Not verified. A.R.S. section 43-1014 does not state an owner credit or exclusion.
Estimates
Partnerships and S corporations that make the election must make estimated payments if taxable income from the previous year exceeds $150,000. Those payments are due on or before the 15th day of the 4th, 6th, and 9th months of the taxable year and the 15th day of the 1st month following the close of the taxable year. A due date that falls on a Saturday, Sunday, or legal holiday is timely on the next business day.
The 2026 Form 120/PTE-W instructions state the threshold and those dates. Section 43-1014 also requires estimated tax under section 43-581 as necessary.
Sunset or repeal
A.R.S. section 43-1014 does not state an end date. It applies for taxable years beginning from and after December 31, 2021.
The full section was read, through the Department's authority to adopt rules.
Still open in the source review
- A.R.S. section 43-1014 does not state an owner credit or exclusion.
Sources for this year
Bonus-depreciation conformity is on its own page.