Retirement pay will not be taxed
Arizona joined a list of 22 other states with a state income tax that do not tax military retirement pay. Previously, Arizona exempted military pay only up to $3,500.
The full exemption went into effect July 1, 2021 when Gov. Doug Doucey signed the legislation into law and it is retroactive to Jan. 1, 2021.
The exemption applies to retirees from the Army, Navy, Marine Corps, Air Force, Coast Guard and Public Health Corps.