Gov. Katie Hobbs has signed a new executive order aimed at speeding up tax relief for middle-income Arizonans. The directive, issued Thursday, instructs the Arizona Department of Revenue to update state tax forms so residents can benefit from her proposed Middle Class Tax Cuts Package when filing 2025 returns.
The order requires tax documents to reflect the higher standard deduction already approved under H.R. 1 and to include provisional instructions for additional deductions — including those for tips, overtime pay, car-loan interest and senior taxpayers — ahead of expected legislative action. Hobbs is urging lawmakers to codify the full package at the start of the 2026 session, noting that most residents will file long before the state finalizes its fiscal year 2027 budget.
The proposed plan would raise the standard deduction to $15,750 for single filers and $31,500 for joint filers, add a $6,000 deduction for residents 65 and older, and allow deductions for tipped income, qualifying overtime earnings and interest paid on new American-made vehicle loans. According to an example released by the governor’s office, a typical older service-industry worker could save several hundred dollars under the changes.
Any tax-conformity measures affecting corporations or high-income filers would be handled during regular budget negotiations.
More information, including the full text of Executive Order 2025-15, is available through the Office of the Governor’s executive orders page.