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Arizona Retirement Income Tax Calculator

Arizona exempts Social Security and taxes IRAs at a flat 2.5%; public pensions get $2,500 each.

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Arizona resident retirement worksheet

Use the year income is received, not the filing year. Later years use a separately approved assessment until the next return rules are verified.

Approved federal AGI, ordinary positive-income full-year resident scope, benefit and public-pension eligibility, owner allocation and Arizona modifications. No unresolved community-property split, negative income, separate small-business return election or special distribution taxation. Confirm the correct deduction / exemption treatment for Form 140ES estimates.

Prepare community-property income, pension ownership and deductions for the actual return. Changing status does not automatically allocate joint income or recalculate prepared deductions.

Includes only the federally taxable amounts in the distinct categories below, plus other taxable income. Cash receipts and federal taxable income after deductions are different amounts.

Use only the amount included in federal AGI. Eligible Railroad Retirement Act benefits include tiers 1 and 2; omit these amounts from the public-pension field.

Approved uniformed-service retired / retainer pay, or qualifying surviving-spouse payments from the uniformed services, excluded in full. Do not enter already-excluded benefit amounts again.

Approved federally included U.S. government or listed Arizona state / local retirement pension after basis. Pensions from another state, private qualified plans and ordinary IRA payouts do not automatically qualify.

Each qualifying recipient has their own $2,500 ceiling. Unused room cannot cover the other owner’s pension.

Prepare all applicable state modifications, including obligations / basis differences. Enter a known zero when none applies.

Exclude the benefits, military and capped public pension amounts already calculated above. Current state conformity, special income and additional subtractions need independent approval.

Illustrative approved joint amount. Form 140ES directs the allowable 2025 standard deduction for estimates, or your estimated 2026 itemized amount. Prepare charitable increases and other permitted changes; do not automatically use a federal 2026 deduction.

Illustrative approved age-65 exemption for two eligible recipients using $2,100 each in the referenced resident instructions. Form 140ES directs allowable prior-year exemptions. Blindness, dependents and supported relatives require their own approval.

Prepare applicable current-year credits and limits. Do not enter withholding, estimated payments, prior-year overpayments or refundable credits. Blank keeps the before-credit estimate and leaves after-credit tax unresolved.

Arizona · 2026 estimate

Waiting on a figure

Arizona ordinary estimate before credits —
Modeled adjusted Arizona income
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Estimated Arizona taxable income
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Included exempt benefits and qualified military pay
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Your capped eligible public-pension subtraction
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Spouse’s capped eligible public-pension subtraction
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Combined eligible public-pension subtraction
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Estimate after approved nonrefundable credits
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Calculation scopeConfirm ordinary full-year resident scope and approved Arizona inputs

Illustrative defaults. Enter approved taxable amounts and confirm eligibility. The result covers the displayed worksheet conditions; a complete return may require other income, adjustments, deductions or credits.

Verified 2026 Form 140ES estimate worksheet and current section 43-1022, reviewed October 2, 2026. Form 140ES directs the prior-year allowable standard deduction and exemptions for estimates; prepare those amounts and current-year itemized deductions / credits independently. This is an estimate, not a completed final return.

Reviewed October 2, 2026. Does Arizona tax retirement income? Separate exempt benefits and public-pension caps

What Arizona taxes in retirement

Partly taxed: limits by age, plan, owner or income apply. Military retirement is covered in the guide. How these labels work.

Does Arizona tax retirement income? Separate exempt benefits and public-pension caps

Estimate Arizona retirement tax at the verified 2026 2.5% estimate rate. Separate exempt benefits, military retirement and each owner’s public-pension allowance.

Arizona generally includes the federally taxable portion of private pensions and IRA distributions in the state calculation. Social Security and qualified Railroad Retirement Act benefits are excluded, including eligible tier 1 and tier 2 benefits. Enter only the amount actually included in federal adjusted gross income for subtraction; subtracting gross benefit receipts from an AGI that includes only a taxable portion would overstate the relief. A rollover or already-tax-free distribution does not create another subtraction.

Approved U.S. government and listed Arizona state / local public pensions qualify for a subtraction of up to $2,500 per recipient. Combine that owner’s eligible plans under one cap. If you receive $20,000 and your spouse receives $1,000, the joint subtraction is $3,500, not $5,000. A public pension from another state and an ordinary private IRA do not qualify merely because federal law regulates the plan. Keep contribution basis, eligible source and the actual recipient with the pension record.

Qualifying uniformed-service retired or retainer pay is excluded in full under the continuing 2021-and-later rule. The resident instructions also allow qualifying surviving-spouse payments from the uniformed services. Keep these approved benefits separate from the capped public-pension category; military retirement does not use up the $2,500 public-pension allowance. Active-service pay and civilian military-technician compensation have different classifications and require their own state review.

The official 2026 Form 140ES booklet uses a 2.5% rate after Arizona adjustments, deductions and exemptions. For a standard-deduction estimate it expressly directs the allowable 2025 amount; for itemizing it directs estimated 2026 deductions. It also directs allowable prior-year exemption amounts. This worksheet therefore requires prepared Arizona deductions and exemptions rather than silently importing a federal 2026 deduction. Current state conformity, charitable increases, senior rules, dependent conditions and special income adjustments need independent review.

An approved joint illustration starts with federal AGI of $100,000, including $15,000 Social Security / qualified railroad benefits, $20,000 qualifying military retirement, your $20,000 eligible public pension and your spouse’s $1,000 eligible public pension. Separate benefit and pension subtractions total $38,500, leaving adjusted Arizona income of $61,500. An approved estimate deduction of $31,500 and $4,200 other exemptions leave $25,800 taxable; the 2.5% estimate is $645 before credits, or $545 after an approved $100 nonrefundable credit.

Use the actual filing status and prepared community-property allocation. A status change does not automatically divide AGI, move a pension allowance or recalculate deductions. Negative adjusted income, a separate Arizona small-business income election and unresolved source or distribution rules need the complete return. The state estimate and federal benefit calculation remain separate tools. Withholding and estimated payments affect the eventual payment or refund; they do not reduce ordinary liability as a nonrefundable credit.

Prepare these Arizona records

Official Arizona source. 2026 Arizona Form 140ES booklet; continuing retirement eligibility in current section 43-1022 and published 2025 Form 140 instructions.

Calculate the federal portion separately

Use the federal retirement-tax worksheet to prepare federally included benefits and ordinary income. Its federal deduction and rates do not replace the Arizona rules above.

Compare Arizona with nearby states

California, Nevada, Utah and New Mexico border Arizona. Run each one’s worksheet with the same household figures before deciding where a move would leave you.

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Updated / verified · Retirement Income Tax Calculator Editorial Team