Mortgage Interest Deduction in Arizona
State income tax rate
2.5%
Itemized deductions allowed
✅ Yes
State-Level Mortgage Interest Deduction
Arizona has a flat 2.5% income tax and generally conforms to federal itemized deductions, including mortgage interest.
Combined Federal + Arizona Savings
If you paid $18,000 in mortgage interest last year and itemize on both returns, your combined tax savings would be approximately:
- Federal (22% bracket): $3,960
- Arizona (2.5% rate): $450
- Total estimated savings: $4,410
These are estimates based on a 22% federal bracket. Your actual savings depend on your specific tax situation.