AZ HB2391

Amends Arizona Revised Statutes section 43-1022 to add a new income tax subtraction for retired or retainer pay of the uniformed services of the United States received by honorably discharged veterans.

Allows honorably discharged veterans to subtract the full amount of their military retirement or retainer pay from Arizona gross income when computing Arizona adjusted gross income.

The subtraction applies to compensation received from retirement or retention in any branch of the United States Armed Forces for veterans with honorable discharge status.

Represents an expansion of existing federal pension deductions, which are currently capped at $2,500 per year, by allowing full deduction of military service pay specifically for eligible veterans.