Arizona retirement taxes at a glance
| Income | Taxed? | How |
|---|---|---|
| Social Security | No | Taxable Social Security and railroad retirement are subtracted. |
| IRA withdrawals | Yes | Taxable at 2.5%. |
| 401(k), 403(b) and 457(b) | Yes | Taxable at 2.5%. |
| Private pensions | Yes | Taxable at 2.5%. |
| Government pensions | Partly | Up to $2,500 subtracted for federal, Arizona state and Arizona local pensions (ASRS, PSPRS, CSRS, FERS and others). Other states’ pensions do not qualify. |
| Military retirement pay | No | Fully exempt since 2021. |
| Roth conversions and Roth withdrawals | Partly | Conversions are taxable; qualified Roth withdrawals are not. |
What retirees pay in Arizona
Five households, priced on the same 2026 tax engine Killion’s planner uses: Social Security plus withdrawals from a traditional IRA, the standard deduction, and every age break the state and federal returns give. Estimates for planning, not tax advice.
| Household | Social Security | IRA withdrawals | Arizona tax | Federal tax |
|---|---|---|---|---|
| Single, 67 | $24,000 | $20,000 | $0 (0.0%) | $0 |
| Single, 67 | $30,000 | $50,000 | $646 (0.8%) | $6,016 |
| Married, both 67 | $42,000 | $40,000 | $0 (0.0%) | $1,295 |
| Married, both 67 | $50,000 | $100,000 | $1,290 (0.9%) | $10,904 |
| Single, 62, before Social Security | $0 | $60,000 | $1,098 (1.8%) | $5,020 |
Arizona compared with other states
The same two households in each state we cover. In the nine states with no income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming) both pay $0 of state tax.
| State | Married, 67: $42,000 Social Security, $40,000 IRA | Single, 67: $30,000 Social Security, $50,000 IRA |
|---|---|---|
| Arizona | $0 | $646 |
| California | $0 | $815 |
| Colorado | $0 | $1,139 |
| Maryland | $0 | $964 |
| Massachusetts | $1,490 | $2,245 |
| Michigan | $0 | $0 |
| North Carolina | $579 | $1,486 |
| Ohio | $347 | $682 |
| Pennsylvania | $0 | $0 |
| Virginia | $0 | $1,325 |
2026 rates and senior breaks
Arizona’s rate: Flat 2.5%.
- $2,100 exemption for each person 65 or older.
- The federal senior deduction (up to $6,000 per person 65 or older, 2025 to 2028) comes off Arizona income too, under HB 4168 of 2026.
- The standard deduction was set to the federal amount and is indexed the same way.
Local taxes: No local income tax.
What people get wrong about Arizona
- The $2,500 government pension subtraction does not cover a pension from another state.
Tax on a 401(k) withdrawal in Arizona
A single filer aged 60 with no other income, taking one withdrawal in 2026:
| Withdrawal | Federal | Arizona |
|---|---|---|
| Tax on a $25,000 401(k) withdrawal | $890 | $223 |
| Tax on a $50,000 401(k) withdrawal | $3,820 | $848 |
| Tax on a $100,000 401(k) withdrawal | $13,170 | $2,098 |
| Tax on a $200,000 401(k) withdrawal | $36,734 | $4,598 |
Social Security across all fifty states, including the eight that can tax it, is on which states tax Social Security. Required minimum distributions add to this income from 73: see the RMD on $1 million.
The retirement tax calculator, set to Arizona
Set to a married couple, both 67, with $42,000 of Social Security and $40,000 of IRA withdrawals. Change any input, including the state.
On $82,000 of income, the 2026 tax is about $1,295: $1,295 federal and $0 Arizona. $20,450 of your Social Security is taxable. The next $1,000 you withdraw from an IRA would cost $185 in tax.
This year’s income sets your Medicare premiums for 2028. See your IRMAA tier.
Figures checked on against Arizona Laws 2026, Chapter 140 (HB 4168), A.R.S. 43-1023, exemptions and A.R.S. 43-1011.01, tax rate.