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Summary of Arizona Military and Veteran Benefits: Arizona offers special benefits for service members, Veterans and their families including, tax and license fee exceptions, education and tuition assistance, vehicle license plates, state park benefits, as well as hunting and fishing license privileges. Eligibility for some benefits may depend on residency, military component and Veteran disability status.

Arizona Veterans Benefits Counselors (VBCs): The Arizona Department of Veterans’ Services has a network of trained VBCs who can assist service members, Veterans, retired service members and their families find and apply for military/Veterans’ benefits under federal, state and local laws. All their services are provided free of charge. To request an appointment to speak with a VBC, call 602-535-1215.

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Arizona Military and Veterans State Benefit Highlights and Eligibility

What are my Arizona Military and Veterans State Tax Benefits?

Arizona Income Tax on Military Pay: Arizona does not tax military pay received by service members serving in an active or reserve component of the U.S. Armed Forces.

Arizona Income Tax Exemption for Military Retired Pay: All military retired pay is exempt from Arizona income taxes.

Thrift Savings Plan (TSP) does not withhold taxes for state or local income tax, but it is reported annually on IRS Form 1099-R. All TSP distributions are subject to state taxes and early distributions may incur higher taxes.

Arizona State Taxes on U.S. Department of Veterans Affairs Military Disability Retirement Pay: Military Disability Retirement Pay received as a pension, annuity or similar allowance for personal injury or sickness resulting from active service in the U.S. Armed Forces should not be included in taxable income. Some of the payments which are considered disability benefits include:

Arizona State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation (DIC): DIC is a tax-free monetary benefit paid to eligible survivors of military service members who died in the line of duty or eligible survivors of Veterans whose death resulted from a service-connected injury or disease.

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Military Survivor Benefit Plan (SBP), Reserve Component Survivor Benefit Plan (RCSBP), and Retired Serviceman’s Family Protection Plan (RSFPP) Arizona State Tax Benefits: SBP, RCSBP and RSFPP annuities are not subject to Arizona income taxes.

Nonresident Military Spouses do not Pay Arizona Income Tax: Income earned in Arizona by a nonresident spouse of a nonresident active duty service member is not taxed in Arizona if all the following apply:

The military spouse’s income is subject to state income tax in their state of residence.

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Arizona Property Tax Exemptions for Disabled Veterans and Surviving Spouses: The property of a resident disabled Veteran, or their surviving spouse may be exempt from taxation up to $4,476 of the assessed value. The amount of the exemption is equal to $4,476 multiplied by their VA disability percentage. Total assessed value of property in Arizona must not exceed $30,099.

Income from all sources cannot exceed:

The exemption is applied to the real estate first, then to a mobile home or an automobile.
Who is eligible for Arizona Property Tax Exemptions for Disabled Veterans and Surviving Spouses? All applicants must be Arizona residents, Veterans must have received an honorable discharge from service in an active or reserve component of the U.S. Armed Forces and received a disability rating from the VA (may be service-connected or non-service-connected).

Applicants must provide the following documentation when they apply:

Property tax is administered by county assessors. Valuations and income limits for the current tax year are available after January 1st of each year from the county assessor. Applicants should contact their local county assessors for more information and to apply.
Arizona Affidavit of Individual Tax Exemption
Arizona Department of Revenue, Property Tax Frequently Asked Questions
Arizona County Government Directory

What are my Arizona Military and Veterans Education Benefits?

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Arizona In-State Tuition Status for Veterans and their Dependents: Eligible Veterans and their dependents can be granted immediate residency, making them eligible for in-state tuition rates when using VA educational benefits.
Who is eligible for Arizona In-State Tuition Status for Veterans and their Dependents? To be eligible the student must be a Veteran, the spouse or dependent of a Veteran, who has been discharged within the last 36 months from a period of active duty 90 days or longer and is using either VA Chapter 30 or Chapter 33 benefits.

Students must also comply with the following requirements: