Arizona will not tax your military income. If your only income is military income, you should not file an Arizona income tax return. Just to clarify- is Arizona your resident state? What other types of income did you have? Thanks!
A full year resident of AZ, takes the military subtraction on Form 140. Your spouse's income would be taxable to AZ as a resident. If your spouse is not a resident, then the income is not subject to tax. See Taxpayers in the Military -- Update
Please preview your AZ return to see what is happening. Verify the income and the tax on the return belong to your resident spouse. To view your return,
If you are using the online version:
Go to the state return and enter it
go to Tax Tools,
then select Tools,
select View Tax Summary,
you should see your state summary, if not, look on the left side and select it.
In the desktop program, switch to forms mode.
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