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February 2, 2025
Question

Arizona income tax deduction(s) for military retirement pay

  • February 2, 2025
  • 1 reply
  • 0 views

Fo Arizona income tax can we do both: deduct military retirement income AND take the $2500 federal retirement deduction? TurboTax would not let us enter both without flagging it as an error, so we filed without the $2500 deduction.

 

But now I'm being told we could have included both deductions, (which would have meant a small refund instead of a $1000 additional payment!).

 

Thank you for any clarification.

 

    1 reply

    AmyC
    Employee
    February 5, 2025

    You can't claim a reduction on military pay when you have excluded it.

     

    Arizona exempts your military retirement 100% on linr29b and your social security on line 30. I think you are referring to line 29a for other government pensions, up to $2500 each.

     

    If you have a state pension or another government pension, then you could reduce it. You can't reduce income from one source below zero. 

     

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