Arizona QSBS Capital Gains Tax 2026: Graduated income tax (top rate up to 2.5%)

Arizona QSBS capital gains in this model: Graduated income tax (top rate up to 2.5%). Use this calculator to stack federal long-term or short-term tax, NIIT when it applies, and Arizona's modeled treatment.

Rates last verified: August 2026

Capital Gains Calculator

Federal · NIIT · All 50 states

2026 ratesIRS verified

Follow the three steps, save the sale, then calculate. Required fields are marked with *.

Your tax profile

These apply to every sale in this estimate.

Tax year

Filing status

State

Annual taxable income (before these gains)

Capital loss carried from prior years

What you sold

Prices and quantity for this lot. Give it a name if you will add more than one sale.

Asset type

Asset name

Buy price

Sell price

Quantity / units

Selling expenses

Qualified Small Business Stock (Section 1202)

When you bought and sold

The IRS uses these dates to decide short-term vs long-term rates.

Buy date

Sell date

Next: Save this sale to the order log, then click Calculate now. Tax results do not update until you calculate.

Order log

Sales included in this tax estimate.

Please fill in the details to see your results. Follow the three steps on the left, then save a sale here.

Arizona tax on qualified small business stock

Arizona generally taxes qualified small business stock gains under its graduated income-tax framework (Graduated income tax (top rate up to 2.5%)). This estimate applies the top modeled Arizona rate to remaining taxable gain.

Federal rules for qualified small business stock: IRC Section 1202 may exclude eligible qualified small business stock gain after a more-than-five-year hold, subject to per-issuer caps. State conformity is not guaranteed. Holding period still matters for LTCG vs STCG except where a longer QSBS or real-estate test applies.

Open the parent Arizona calculator for a generic sale, or the national QSBS lander for asset-only copy. Nearby states below keep the same qsbs preset so you can compare residency. Estimates are not tax advice.

This model applies Section 1202 only after a more-than-five-year hold, capped at the greater of $10 million or 10 times basis. That is the pre-4 July 2025 rule as implemented here. Stock acquired after 4 July 2025 is not modeled for a $15 million cap, a 50% exclusion at three years, a 75% exclusion at four years, or a $75 million gross-asset limit. California adds the federal exclusion back into the state tax line. Other states are not given a separate QSBS adjustment in this model.

Arizona’s model uses graduated income tax with a top rate up to 2.5% on taxable capital gain. Among states that tax the gain, that top rate is one of the lower ones encoded here.

The 2.5% figure is a planning ceiling in this tool, not a flat tax on the first dollar. Federal NIIT is still added when MAGI is high enough, and it does not shrink because Arizona’s rate is low.

Rates last verified: August 2026. Official source: https://azdor.gov/.

Arizona calculator QSBS (all states)U.S. Capital Gains Tax Calculator How to calculate gain Schedule D and Form 8949

Illustrated tax on a long-term gain

QSBS held long enough for long-term treatment in Arizona. Investment real estate does not use Section 121 in this table. QSBS uses a more-than-five-year hold.

Gain	Federal	NIIT	Arizona	Texas state tax
$25,000.00	$0.00	$0.00	$0.00	$0.00
$100,000.00	$0.00	$0.00	$0.00	$0.00
$250,000.00	$0.00	$0.00	$0.00	$0.00

Single filer, tax year 2026, $80,000.00 of other taxable income. Texas is the no-tax comparison. Illustration only, not your return.

FAQ

Arizona QSBS FAQs

How does Arizona tax qualified small business stock capital gains?

Does Arizona honor the federal QSBS exclusion?

This tool applies a modeled federal Section 1202 exclusion when QSBS is checked, then estimates Arizona tax on remaining gain (Graduated income tax (top rate up to 2.5%)). Some states decouple from Section 1202 — verify before you sell.

Which IRS forms apply to a Arizona qsbs sale?

Plan around acquisition records, Form 8949, Schedule D, and Section 1202 support. Arizona may require its own income-tax return when the state line is not $0. NIIT, if any, is computed on Form 8960.

Does Arizona tax qsbs gains if I am a part-year resident?

This page assumes full-year Arizona residency and applies graduated income tax (top rate up to 2.5%) to taxable qualified small business stock gain. Part-year allocation and nonresident sourcing are not modeled — use Arizona instructions or a CPA.

What does the Arizona QSBS illustration assume?

The Arizona QSBS rows use a single filer with $80,000 of other income and a long-term gain in 2026. This model applies Section 1202 only after a more-than-five-year hold, capped at the greater of $10 million or 10 times basis. That is the pre-4 July 2025 rule as implemented here. Stock acquired after 4 July 2025 is not modeled for a $15 million cap, a 50% exclusion at three years, a 75% exclusion at four years, or a $75 million gross-asset limit. California adds the federal exclusion back into the state tax line. Other states are not given a separate QSBS adjustment in this model. Texas is the no-tax comparison, not a second residency.