Arizona allows for a subtraction of certain pension income. If you receive pension income from any of the following sources, you may qualify for a subtraction on your Arizona return:
- United States Government Service Retirement and Disability Fund
- United States Foreign Service Retirement and Disability System
- Retired or retainer pay of the uniformed services of the United States
- Any other retirement system established by federal law
- Public and State retirement plans
- a retirement plan for which county, city, or town in Arizona has been established
- a retirement program established by the Board or Regents or another community college district.
You are allowed to subtract the amount you received or $2,500, whichever is less. You can only include the amount that was included on your federal return. If you are married filing joint and you and your spouse both receive such pension, you may both subtract what you received or $2,500, whichever is less.
Where to enter?
- State Section
- Subtractions from Income and enter the amount in the entry box labeled for qualified pension.
See also Is my military pension/retirement income taxable to Arizona?