AZ SB1375

Amends section 43-1022 of Arizona Revised Statutes to modify gross income subtractions for state income tax purposes.

Changes paragraph 11 to clarify that compensation for active service in the uniformed services of the United States is subtractable, replacing references to "armed forces" with "uniformed services."

Expands paragraph 26 to allow full subtraction of retired or retainer pay from uniformed services of the United States beginning in taxable year 2021 and beyond, increasing from $2,500 (through 2018) to $3,500 (2019-2020) to unlimited amount (2021+).

Makes technical correction to paragraph 2(a) to exclude retired or retainer pay of uniformed services from the $2,500 benefits limitation by cross-referencing the expanded paragraph 26 subtraction.

Effective for taxable years beginning January 1, 2024 and thereafter.