During today’s State of the State address, Governor Doug Ducey announced an elimination of all state income taxes on our veterans’ military pensions.

During the speech, Governor Ducey said: “Our vets have already earned their benefits. Put their lives on the line. The government shouldn’t be taxing their service to country, it should be honoring their service to country. Our budget does this, by eliminating all state income taxes on our veterans’ military pensions once and for all.”

We have a goal: To make Arizona homebase for veterans everywhere in the country. These women and men make our state stronger. To all our veterans, everywhere, from California to New York State, Arizona wants you. All of you. You’ve put our country first; now with this budget, Arizona will put you first.

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. In Fiscal Year 2019, Arizona increased the exemption to $3,500.

The FY 2021 Executive Budget will fully exempt all pension pay of the Uniformed Services of the United States. This new exemption – retroactive to tax year 2020 – is expected to save the average military pensioner nearly $900 year. More than 50,000 veterans in Arizona will benefit from this proposal.