Governor’s Office Reminds Military Veterans Of New Pension Exemption

July 24, 2021

By Terri Jo Neff |

Gov. Doug Ducey wants to remind the more than 50,000 military veterans living in Arizona that he signed legislation which now fully exempts military pensions from state income taxes.

“Veterans put the safety of our great nation first. We should honor their service, not tax it,” Ducey tweeted this week.

Arizona’s tax code previously exempted only $3,500 of a veteran’s military pension. Getting it to a full exemption was something Ducey announced as a priority during his January 2020 State of the State speech, but then the COVID-19 pandemic shut down all but priority budget considerations.

When the new legislative session convened in January 2021, the governor once again made tax relief for veterans a priority.  It took until the last week of June, but the full exemption passed and Ducey signed the legislation.

“Our nation’s greatest heroes will no longer pay taxes on their retirement pay. This saves the average veteran an additional $650 a year,” Ducey said after signing the bill.

In addition to the pension income tax exemption, the Fiscal Year 2022 budget package signed by the governor includes $25 million for construction and operation of a State Veterans Home in northwestern Arizona. Additional funds were appropriated for operating State Veterans Homes recently opened in Flagstaff and Yuma.

Nearly $775,000 was appropriated to ADVS for the hiring of 12 additional Veteran Benefits Counselors, and the budget includes $100,000 earmarked for distribution to a charitable organization located in southern Arizona to work with regional Veterans organizations to improve services which can reduce Veteran suicides.

Ducey also signed SB1802 which establishes the date every August when Arizonans will recognize National Navajo Code Talkers Day.

Among those getting the word out to veterans is Col. Wanda Wright, director of the Arizona Department of Veterans’ Services (ADVS).

“This budget is a real win for Arizona Veterans,” Wright posted to the ADVS website. “It further proves that here in Arizona, we honor and support service members, Veterans and their families.”

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