AZ HB2236

Creates a new tax subtraction (item 32) for retired or retainer pay from the uniformed services of the United States, separate from the existing $2,500 pension subtraction.

Establishes a phased increase in the military pension subtraction amount, starting at $2,500 for 2018 and incrementally rising by $1,000 per year through 2028.

Increases the military pension tax subtraction to $15,000 for taxable years beginning December 31, 2028 and thereafter.

Removes the military pension component from the existing general pension subtraction (section 2(a)) and creates a dedicated military pension subtraction with its own dollar limits.