Bill > SB1155

This bill modifies Section 43-1022 of Arizona's tax code, specifically addressing income tax subtractions for uniformed services retired or retainer pay. The bill updates the existing provision for military retirement benefits by gradually increasing the amount of such benefits that can be subtracted from Arizona gross income. For taxable years through December 31, 2018, individuals could subtract up to $2,500 in uniformed services retirement pay. From December 31, 2018 through December 31, 2020, this increases to $3,500, and for taxable years beginning after December 31, 2020, the full amount of retirement pay can be subtracted. The change is part of a broader set of income tax subtraction provisions and appears to be aimed at providing more favorable tax treatment for military retirees. The bill will become effective for taxable years beginning after December 31, 2025, which means taxpayers will first be able to apply these new subtraction rules in their 2026 tax filings. The modification replaces the term "armed forces" with "uniformed services" in the existing statute, which may reflect a more comprehensive definition of military service.

Budget and Finance

https://apps.azleg.gov/BillStatus/BillOverview/82324