No. Arizona Department of Revenue materials say Arizona does not tax Social Security retirement benefits received under Title II of the Social Security Act. If those benefits show up in your federal adjusted gross income, Arizona law provides a subtraction. Other retirement income, like IRA withdrawals and most pensions, is treated differently.
Arizona Social Security tax rules at a glance
- Social Security: AZDOR lists Title II Social Security retirement benefits among the income Arizona excludes.
- Railroad Retirement: Benefits received under the Railroad Retirement Act are also excluded, per AZDOR.
- The statute: A.R.S. 43-1022 lists the Arizona subtractions, including Social Security and Railroad Retirement amounts included in federal income.
- Other retirement income: Generally taxable for residents, including retirement income from another state, with specific subtractions for some public pensions and uniformed services retired pay.
- Rate structure: AZDOR describes one rate for all income levels and filing statuses for tax year 2025.
- Not tax advice: Confirm every rule for your tax year with a tax professional.
See Arizona 55+ homes Call Terry: 602-483-4665
Retirees moving to Arizona often hear a quick answer about Social Security at a neighborhood get-together and stop there. This page sums up what the Arizona Department of Revenue (AZDOR) and the Arizona Legislature actually publish, points you to the official sources, and explains when to bring in a tax professional. I help with the home search and purchase. Tax filing belongs with a qualified tax professional who can apply current law to your facts.
The short Social Security answer
On its individual income tax page, AZDOR says Arizona residents may exclude Social Security retirement benefits received under Title II of the Social Security Act from taxable income. Because Arizona starts its return from federal adjusted gross income, some of your Social Security may already be counted on the federal side. Arizona law then removes it.
That removal comes from A.R.S. 43-1022, the statute that lists subtractions from Arizona gross income. One paragraph subtracts the amount included in federal adjusted gross income under section 86 of the Internal Revenue Code, which is the federal section covering the taxation of Social Security and Railroad Retirement benefits.
Read the current year's form instructions yourself. Forms and line numbers change from year to year, so do not use a blog post, including this one, as your filing guide.
Railroad Retirement benefits
AZDOR also says Arizona excludes benefits received under the Railroad Retirement Act. The 2025 nonresident return instructions describe tier 1 and tier 2 railroad retirement benefits as income Arizona does not tax. If you receive any Railroad Retirement Board payments, check the exact benefit type on your federal forms with your tax preparer before assuming every payment follows the same rule.
How Arizona starts the income tax calculation
Arizona's return builds on your federal return. The 2025 AZDOR instructions tell filers to complete the federal return first, and the Arizona return then uses your federal adjusted gross income as the starting point. From there, Arizona applies its own additions and subtractions. That is why Social Security can appear on a federal return and still be taken out for Arizona.
Which Arizona form you file depends on residency. AZDOR instructions say full-year residents file Form 140, 140A or 140EZ, part-year residents file Form 140PY, and nonresidents file Form 140NR.
Other common retirement income
Arizona does not treat all retirement income like Social Security. AZDOR says a full-year resident is taxed on all income, including earnings from another state, and that Arizona will also tax retirement income from another state. A part-year resident is taxed on income received while a resident, including retirement from another state.
A.R.S. 43-1022 does list some specific subtractions:
- Federal, state and local public pensions: The statute provides a capped subtraction for benefits from certain federal retirement systems and from Arizona state, county, city and town retirement plans.
- Uniformed services retired or retainer pay: For taxable years beginning after December 31, 2020, the statute allows a subtraction of the full amount received.
Private pensions, IRA distributions and 401(k) or other workplace plan withdrawals are not on AZDOR's Social Security exclusion list. Your tax professional should match each Form 1099 you receive to the current Arizona instructions. I am not listing caps or dollar figures here on purpose, since they belong on the official pages for the year you file.
Arizona's flat income tax, in general terms
AZDOR's Individual Income Tax Highlights page describes a 2.5% rate for all income levels and filing statuses for tax year 2025. In plain terms, Arizona uses one rate instead of a multi-bracket schedule. Rates can change by law, so check the Highlights page on azdor.gov for the tax year you are filing.
Residency questions snowbirds ask
These come up a lot while I am showing homes:
- "If I keep a home in another state, am I an Arizona resident for tax purposes?"
- "Does part-year residency change how my retirement income is handled?"
- "What about rental income from the Arizona house while I am gone for the summer?"
Those are tax residency and income-sourcing questions, and Arizona has separate forms for full-year, part-year and nonresident filers. Bring your calendar, domicile facts and prior-year returns to a tax professional before you decide anything based on a neighbor's story.
How this ties to buying a home in Arizona
Income tax treatment of Social Security is one piece of the retirement budget. It does not replace title review, inspections or financing work on a purchase. Property taxes are a separate topic with their own rules. If you are 65 or older, read our guide to the Arizona senior property tax freeze, and see Arizona property taxes: due dates and primary residence for how bills work.
For the bigger picture, the retiring to Arizona checklist covers the move step by step, and the Arizona 55+ living hub covers age-restricted communities, whose rules are set out in each community's CC&Rs.
This page is general information, not tax or legal advice. Talk with a qualified tax professional about your situation.
Questions buyers ask
Does Arizona tax Social Security benefits?
No. AZDOR says Arizona excludes Social Security retirement benefits received under Title II of the Social Security Act, and A.R.S. 43-1022 subtracts any amount included in federal adjusted gross income.
Does Arizona tax Railroad Retirement benefits?
AZDOR says Arizona excludes benefits received under the Railroad Retirement Act. Confirm your specific benefit type with your tax preparer.
Are IRA or 401(k) withdrawals treated like Social Security in Arizona?
No. They are not on AZDOR's Social Security exclusion list, and AZDOR says residents are taxed on retirement income from another state. Some public pensions and uniformed services retired pay have their own subtractions under A.R.S. 43-1022.
Does Arizona have a flat income tax?
Yes. For tax year 2025, AZDOR describes a 2.5% rate for all income levels and filing statuses. Check azdor.gov for the year you are filing.
Where do I verify the rules?
Start with the individual income tax pages and current form instructions on azdor.gov, and read A.R.S. 43-1022 on azleg.gov.
Is this tax advice?
No. This is general information for retirees and snowbirds thinking about buying a home in Arizona. Talk with a qualified tax professional about your own situation.
Planning a retirement move to Arizona?
Terry Day, REALTOR® with DeLex Realty, helps retirees and snowbirds with the home search, the offer and closing across Greater Phoenix. For Social Security and retirement-income tax questions, Terry will point you to a tax professional.