Governor Ducey Calls For Tax Relief For Arizona Veterans

PHOENIX — In his State of the State address Monday, Governor Ducey called for letting Arizona veterans keep more of the benefits they earned.

“Arizona has more than 600,000 veterans, and for the military retirees who qaulify for the exemption, inflation alone has chopped it in half. Their service has earned them a lifetime benefit from our nation. So please, send me a bill that increases the exemption and demonstrates to our vets that we value this service.”

Since 1989, Arizona has provided an exemption from state Individual Income Tax for the first $2,500 in military retirement pay received by a retired service member. Unfortunately, for the 52,000 retired military personnel living in Arizona, inflation alone has reduced the value of that exemption by more than half.

1. Governor Ducey’s Executive Budget will include an increase in the level of the military retirement pay exemption from $2,500 to $10,000, phased in over the next two tax years. The increased exemption, representing approximately $15 million in tax relief for veterans when fully phased in, is expected to save an Arizona retired service member more than $280 in state income taxes annually. Under the plan, it will be phased in over two years.