Arizona Military and Veterans Benefits

State Taxes
Education Benefits
Employment Benefits
Unemployment Compensation
Motor Vehicles Division (MVD) Benefits
Health Insurance Benefits
Parks and Recreation Benefits
Miscellaneous Benefits
Arizona Military Resource Locator
U.S. Department of Veterans Affairs (VA)Facilities
Resources

Summary of Arizona Military and Veteran Benefits: The Arizona Department of Veterans' Services is a state agency with offices located throughout Arizona that provides direct assistance in all matters pertaining to benefits and entitlements of Veterans, their dependents and survivors. The department is responsible for apprising Veterans and their Families residing in Arizona of the federal and state benefits available to them. The department's staff offers professional services. Arizona currently offers special benefits for its military Service members and Veterans including, Tax and License Fee Exceptions, Education and Tuition Assistance, Vehicle License Plates, State Park benefits, as well as Hunting and Fishing License privileges. Eligibility for some benefits may depend on residency, military component and Veteran disability status.

 
Arizona Military and Veterans State Benefit Highlights and Eligibility


What are my Arizona Military and Veterans State Tax Benefits?

Arizona Resident Military Active Duty Pay is Tax Free: Beginning in 2006, Arizona does not tax active duty military pay. Members of the U.S. Armed Forces may subtract the amount of pay received for active duty military service, including pay received for active service in a combat zone or an area given the treatment of a combat zone, to the extent included in Arizona gross income and subject to Arizona tax.

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Arizona State Tax Exemption of $3500 on Retired Military Pay: Benefits, annuities and pensions in an amount totaling not more than $3,500 received from one or more of the following shall be exempt from Arizona gross income:

  • The United States government service retirement and disability fund;

  • retired or retainer pay of the uniformed services of the United States,

  • the United States foreign service retirement and disability system and

  • any other retirement system or plan established by federal law.

Who is eligible for Arizona State Tax Exemption of $5500 on Retired Military Pay? Retired Members of the Armed Forces in receipt of Retired pay are eligible for the exemption

Note:
Governor Ducey’s Executive Budget, for January 2018, will include an increase in the level of the military retirement pay exemption from $2,500 to $10,000, phased in over the next two tax years. The increased exemption, representing approximately $15 million in tax relief for Veterans when fully phased in, is expected to save an Arizona retired Service member more than $280 in state income taxes annually. Under the plan, it will be phased in over two years.
Arizona Governor's Press Release

Learn more about Arizona State Tax Exemption of $3500 on Retired Military Pay

Arizona State Taxes on U.S. Department of Veterans Affairs Military Disability Retired Pay: Military Disability Retirement Pay received as a pension, annuity or similar allowance for personal injury or sickness resulting from active service in the Armed Forces should not be included in taxable income if any of the following conditions apply:

  • You were entitled to receive a disability payment before September 25, 1975;

  • You were a member of the military (active or reserves) or were under a binding written commitment to become a member on September 24, 1975;

  • You receive disability payments for a combat-related injury. This is a personal injury or sickness that:

    • Resulted directly from armed conflict,

    • Took place while you were engaged in extra-hazardous service,

    • Took place under conditions simulating, including training exercises such as maneuvers, or

    • Was caused by an instrumentality of war.

  • You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it (the exclusion under this condition equals the amount you would be entitled to from the VA).

Learn more about Arizona State Taxes on U.S. Department of Veterans Affairs Military Disability Retired Pay

 Arizona State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation: Dependency and Indemnity Compensation (DIC) is a tax-free monetary benefit paid to eligible survivors of military Service members who died in the line of duty or eligible survivors of Veterans whose death resulted from a service-related injury or disease.

Learn more about Arizona State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation

Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Arizona State Tax Benefits: Benefits, annuities and pensions in an amount totaling not more than $3,500 received from one or more of the following shall be exempt from Arizona gross income:

  • The United States government service retirement and disability fund;

  • retired or retainer pay of the uniformed services of the United States,

  • the United States foreign service retirement and disability system and

  • any other retirement system or plan established by federal law.

Note: Governor Ducey’s Executive Budget, for January 2018, will include an increase in the level of the military retirement pay exemption from $3,500 to $10,000, phased in over the next two tax years. The increased exemption, representing approximately $15 million in tax relief for Veterans when fully phased in, is expected to save an Arizona retired Service member more than $280 in state income taxes annually. Under the plan, it will be phased in over two years.
Who is eligible for Arizona State Tax Exemption of $3500 on Survivor Benefit  Annuities? Surviving Beneficiaries of a Service member’s SBP/ RCSBP/ RSFPP are eligible for the tax exemption.

Learn more about Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Arizona State Tax Benefits

Nonresident Military Spouses do not Pay Arizona Income Tax : Starting with 2009, income earned for services performed in Arizona by an Arizona nonresident Spouse of an active duty military member will not be subject to Arizona income tax if all of the following apply:

  • The active duty military member is present in Arizona in compliance with military orders.

  • The Spouse is in Arizona solely to be with the active duty military member.

  • The Spouse maintains residence in another state, which is the same state of residence as the military member.

Learn more about Nonresident Military Spouses do not Pay Arizona Income Tax

Arizona Property Tax Exemptions for Surviving Spouses and Disabled Persons: There is no state property tax. Property tax is administered by county assessors. The property of Surviving Spouses and disabled persons who are residents of the state of Arizona may be exempt from taxation to the extent allowed by law.

The assessed value of the property may be reduced by $3,965 or more with a corresponding reduction in tax. Legislative changes, effective August 2005, have indexed the amount to the GDP indicator. Valuations for the current tax year are available from the county assessor after January 1st of each year. The exemption is applied to the real estate first, then to a mobile home or an automobile.
Who is eligible for Arizona Property Tax Exemptions for Surviving Spouses and Disabled Persons?

  • You must be a resident of Arizona.

  • Total assessed valuation of property in Arizona must not exceed $26,965 for the 2019 tax year.

  • This amount is indexed and changes each year. Total income from all sources, excluding social security, cannot exceed $33,037

  • If Children under 18 years of age or disabled Children reside in the household, income cannot exceed $39,634

For Disabled persons exemptions the disability must be total and permanent and certified by a licensed physician For Surviving Spouses the applicant and Spouse must have been Arizona residents at time of Spouse’s death, or applicant must have been a Surviving Spouse residing in Arizona prior to January 1, 1969.

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What are my Arizona Military and Veterans Education Benefits?

 Arizona In-state Tuition Status for Veterans: Eligible Veterans and dependents can be granted immediate residency, thereby receiving in-state tuition rates, by:

  • Residing in the state

  • Completing at least one of the following:

    • Registering to vote in Arizona

    • Getting an Arizona driver license

    • Arizona motor vehicle registration

    • Employment history in Arizona

    • Transfer of major banking services to Arizona

    • Change of permanent address on all pertinent records

    • Other materials of whatever kind or source relevant to domicile or residency status

Who is eligible for Arizona In-state Tuition Status for Veterans? individuals must be a Veteran, or a Spouse or dependent of a Veteran, that has been discharged within the last 36 months from a period of active duty that was 90 days or longer AND using either VA Chapter 30 or Chapter 33 benefits.

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Tuition and Fees Deferred Payment at Arizona State Supported School: Any person who is eligible for and has applied for benefits for education available to Veterans of the United States Armed Forces under federal law may apply for a deferment of payment of tuition, fees and required books and materials for a period not to exceed one hundred twenty days. The community college, college or university shall defer payment for that period on receipt of a signed and acknowledged promissory note for the amount of the tuition, fees and required books and materials, with no interest charge, that is due and payable at the end of the deferral period. This deferment is available during any registration in which a Veteran is awaiting education benefits available to Veterans of the United States Armed Forces under federal law.
Who is eligible for Tuition and Fees Deferred Payment at Arizona State Supported School? An Arizona Veteran or their dependent is eligible for the tuition waiver while awaiting federal education benefits.

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Tuition Waivers for Arizona Public Universities for Certain Veterans and Dependents: A tuition waiver scholarship shall be provided after verification from an appropriate authority, so long as they otherwise meet the qualifications for admission to an Arizona Public University.
Who is eligible for Tuition Waivers for Arizona Public Universities for Certain Veterans and Dependents?

  • A resident of the state of Arizona or stationed in Arizona

  • Children who are thirty years of age or younger or an un-remarried Spouse of a Service member who was killed in the line of duty or who died from injuries suffered in the line of duty while traveling to or from duty

  • A member of the Arizona National Guard or Armed Forces who received a Purple Heart citation and whose disability rating determined by the United States department of Veterans affairs is 50% or more.

  • A former member of the Arizona National Guard who was medically discharged from the Arizona National Guard due to an injury or disability suffered during status under title 10, United States Code, in weekend training status, in annual training status or in response to a state of emergency declared by the governor.

A person who is convicted of a felony is ineligible for a tuition waiver scholarship.

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Arizona Interstate Compact on Educational Opportunity for Military Children: It is the purpose of this compact to remove barriers to educational success imposed on Children of military Families because of frequent moves and deployment of their parents by:

  • Facilitating the timely enrollment of Children of military Families and ensuring that they are not placed at a disadvantage due to difficulty in the transfer of educational records from the previous school district or variations in entrance or age requirements.