AZ SB1060

Creates a new subtraction from Arizona gross income for military retirees receiving retired or retainer pay from the uniformed services of the United States, allowing up to $3,000 in annual deductions.

This new military pay subtraction is an alternative to the existing $2,500 cap under the general federal retirement benefits category, giving military retirees a higher exclusion amount.

Removes "retired or retainer pay of the uniformed services of the United States" from the general federal retirement benefits category (paragraph 2(a)) to avoid double benefits.

Applies retroactively to taxable years beginning after December 31, 2014.