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HB2019 • 2026

individual income tax; filing exemption

HB2019 - individual income tax; filing exemption

Labor Taxes
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Rachel Keshel
Last action
2026-01-13
Official status
House second read
Effective date
Not listed

Plain English Breakdown

The official status indicates the bill passed both chambers, but no effective date is listed beyond the applicability clause; executive action (such as signing) is not shown in the provided text.

HB2019: Income Tax Exemption for Young Married Couples

This law creates a new income tax exemption for married couples where both spouses are under age twenty-five and updates the heading of an existing tax article.

What This Bill Does

  • Creates a full income tax exemption for individuals who are under twenty-five years old and married to someone also under twenty-five, regardless of their income source or type.
  • Requires the state department to create a process to check if people qualify for this new exemption.
  • Updates an existing law about wage withholding by adding rules that exclude wages paid to young married employees from having taxes taken out automatically.
  • Changes the official heading of Title 43, Chapter 10, Article 4 in state laws from 'Deductions' to 'Deductions and Exemptions'.
  • Sets a rule that this law applies only to tax years starting after December 31, 2026.

Who It Names or Affects

  • Married individuals who are both under the age of twenty-five.
  • Employers in Arizona who pay wages to employees fitting the new exemption criteria.
  • The state department responsible for collecting taxes and verifying eligibility.

Terms To Know

Withholding
Money taken out of a paycheck by an employer before it is paid to cover tax obligations.
Taxable year
The specific time period, usually one calendar year, used for calculating how much income tax someone owes.

Limits and Unknowns

  • This law does not take effect until the first day of a tax year that begins after December 31, 2026.
  • The specific steps or forms needed to verify eligibility for the exemption are not described in this text because they will be created later by the department.

Bill History

  1. 2026-01-13 House

    House second read

  2. 2026-01-12 House

    House Rules: None

  3. 2026-01-12 House

    House Ways & Means: None

  4. 2026-01-12 House

    House first read

Official Summary Text

HB2019 - individual income tax; filing exemption

Current Bill Text

Read the full stored bill text 
HB2019 - 572R - I Ver

PREFILED��� NOV 19 2025

REFERENCE TITLE:
individual income tax; filing exemption

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2019

Introduced by

Representative
Keshel

AN
ACT

amending section 43-403, Arizona
Revised Statutes; amending title 43, chapter 10, article 4, Arizona Revised
Statutes, by adding section 43-1043; relating to individual income tax.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 43-403, Arizona Revised
Statutes, is amended to read:

START_STATUTE
43-403.

Employment excluded from withholding

A. No amount shall be deducted or retained from:

1. Wages or salary paid to an employee of a common
carrier when such employee is a nonresident of this state as defined in section
43-104 and regularly performs services both within and without this
state.

2. Wages paid for domestic service in a private
home.

3. Wages paid for casual labor not in the course of
the employer's trade or business.

4. Wages paid to part-time or seasonal employees
whose services to the employer consist solely of labor in connection with the
planting, cultivating, harvesting or field packing of seasonal agricultural
crops, except such employees whose principal duties are operating any
mechanically-driven device in such operations.

5. Wages or salary paid to a nonresident of this
state who is:

(a) An employee of an individual, fiduciary,
partnership, corporation or limited liability company having property, payroll
and sales in this state, or of a related entity having more than fifty per cent
direct or indirect common ownership.

(b) Physically present in this state for less than
sixty days in a calendar year for the purpose of performing a service that will
benefit the employer or the related entity. For purposes of
determining the number of days of service in this state, days spent in the
following activities are not included:

(i) In transit.

(ii) Engaging in personal activities.

(iii) Participating in training or professional
development activities or attending meetings that are not directly connected to
the Arizona operations of the employer or the related entity.

6. Wages or salary paid to a nonresident who is in
this state on a temporary basis for the purpose of performing disaster recovery
from a declared disaster during a disaster period as defined in section 42-1130.

7. Wages paid to an employee who is
under twenty-five years of age and Married to an individual who is under
twenty-five years of age.

B. In addition to the exemptions from the
withholding provisions contained in subsection A of this section, because of
the temporary nature of such employment, no amount shall be deducted or
retained from wages paid to a nonresident of this state engaged in any phase of
motion picture production when, prior to the time of payment of such wages, an
application is made by the employer to the department, on forms prescribed by
the department, for an exemption from the withholding provisions of this
section and the department determines that the nonresident would be allowed a
credit under section 43-1096 against all of the taxes upon such wages
imposed by this chapter.

C. Subsection A, paragraph 5 of this section does
not apply to a nonresident employee who is in this state solely for athletic or
entertainment purposes.

D. Notwithstanding subsection A, paragraphs 4 and 5
of this section:

1. A nonresident employee under subsection A,
paragraph 5 of this section or a part-time or seasonal employee under
subsection A, paragraph 4 of this section may elect to have withholding
deducted in the manner prescribed by section 43-401, subsection E and the
employer shall withhold tax pursuant to that election.

2. The employer may elect to withhold tax from the
nonresident employee before the sixty-day limitation has elapsed.
END_STATUTE

Sec. 2.
Heading change

The article heading of title 43,
chapter 10, article 4, Arizona Revised Statutes, is changed from
"DEDUCTIONS" to "DEDUCTIONS AND EXEMPTIONS".

Sec. 3. Title 43, chapter 10, article 4,
Arizona Revised Statutes, is amended by adding section 43-1043, to read:

START_STATUTE
43-1043.

Exemption; individuals under twenty-five years of age and
married

A. An individual who is under twenty-five
years of age and married to an individual who is under twenty-five years
of age is exempt from the tax imposed under this chapter with respect to that
taxable year, regardless of the source or nature of the income.

B. The department shall establish a
process to verify eligibility for the exemption under this section.

END_STATUTE

Sec. 4.
Applicability

This act applies to taxable years
beginning from and after December 31, 2026.