Updated January 2026

Arizona Veteran Benefits 2026

Arizona offers several benefits for veterans and military retirees. Here is a summary of the key tax and property benefits available in AZ for 2026.

Arizona Highlights

  • Full military retirement pay tax exemption
  • Property tax exemption for disabled veterans
  • Free vehicle license plates for disabled veterans
  • State veterans homes

Income Tax Treatment

Arizona has a state income tax.

Military Retirement Pay: Arizona has fully exempted military retirement pay from state income tax since tax year 2021, with no dollar cap.

Active Duty Pay: Active duty pay earned outside Arizona may be exempt.

VA Disability Compensation: VA disability compensation is tax-free at both the federal and state level in all 50 states. Arizona does not tax VA disability payments.

Property Tax Exemption for Disabled Veterans in Arizona

Type: Graduated by disability rating

As of tax year 2026, Arizona fully exempts the primary residence of a veteran with a 100% VA service-connected disability rating; veterans rated below 100% get a partial exemption equal to their disability percentage applied to a capped assessed-value amount, subject to income and home-value limits.

VA disability rating / categoryWhat you get
100% service-connected FULL exemption of the primary residence from property tax (new under HB2792, effective for TY2026). No income or property-value cap for this tier.Must be a 100% VA service-connected disability rating on the veteran's primary residence; jointly owned home with a spouse is treated as solely owned by the veteran.
Below 100% (e.g., 10%-99%) service-connected or non-service-connected disability Partial exemption: the maximum exemption amount of assessed value (approx. $4,873 for 2026) multiplied by the VA disability percentage, subtracted from assessed valuation. Example: a 50%-rated veteran gets ~$2,436 of assessed value exempted.For TY2026 the veteran's total Arizona property assessed value (Limited Property Value) must not exceed roughly $36,865, and household income must be under roughly $39,865 (or ~$47,826 with minor children); VA disability compensation, Social Security, and Railroad Retirement are excluded from the income count. These limits adjust annually.
  • Income limit: Yes for the partial (below-100%) tier: roughly $39,865/yr (or ~$47,826 with minor dependents) for TY2026, excluding VA/SSA/RR income. NO income limit for the 100%-rated full exemption. Note: all income limits for this program are scheduled to be eliminated beginning tax year 2027.
  • Age requirement: None.
  • Surviving spouse: A surviving spouse of a 100%-disabled veteran may continue the full exemption as long as they do not remarry and occupy the home as their primary residence. Arizona also has a separate widow/widower exemption (same prorated framework and limits) independent of the veteran benefit.
  • Counts being paid at 100% via unemployability (TDIU)? Varies / not explicitly addressed — confirm with the assessor or state VA
Recent change: MAJOR: HB2792 (57th Leg., 2nd Reg. Session) was enacted as an emergency measure effective February 12, 2026, applying to taxable years beginning January 1, 2026. It grants a FULL primary-residence property tax exemption to veterans with a 100% VA service-connected disability rating, replacing the previously tiny prorated amount for that tier. The underlying exemption derives from 2022's Proposition 130, which restored the constitutional veteran exemption. A separate 2026 constitutional ballot measure regarding combat-veteran exemptions may also appear; confirm its status.
Before you rely on a dollar figure: the exact current amount can change year to year. Confirm with your county assessor or the Arizona Department of Veterans Affairs using the source link below.

Source: Ariz. Const. art. IX, sec. 2 / 2.3; A.R.S. 42-11111; HB2792 (2026) and a second official source. Verified June 2026 against primary sources.

To apply, contact your county assessor's office or the Arizona Department of Veterans Affairs. You will typically need your VA disability rating letter (and often your DD‑214) and proof that the home is your primary residence.

Real estate vs. personal property: this benefit applies to real-estate (home/homestead) property tax. Personal-property taxes — such as the annual tax some states levy on vehicles — are separate and generally still apply, even at a 100% rating, unless your state specifically exempts them.

Check your exemption by rating & state →

VA Healthcare in Arizona

Arizona has approximately 3 VA medical centers along with community-based outpatient clinics (CBOCs) throughout the state. Veterans enrolled in VA healthcare can receive care at any VA facility nationwide.

To find the nearest VA facility, visit VA.gov Facility Locator.

Disclaimer: State benefits can change. This information is current as of early 2026. Verify specific benefits with the Arizona Department of Veterans Affairs before making financial decisions.