Does Arizona Tax Social Security?

The short answer: no, Arizona does not tax Social Security benefits. But the federal government still might, and how you plan your other income decides how much. Here is how it works, from a CFP® professional based in Surprise.

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CFP®CERTIFIED FINANCIAL PLANNER™ Professional

ChFC®Chartered Financial Consultant®

Since 2008Advising Clients On Major Financial Decisions

Cetera Advisors LLCMember FINRA/SIPC

The Short Answer

No. Arizona does not tax Social Security benefits. Arizona is one of the majority of states that fully exempt Social Security from state income tax. If any part of your benefits is included in your federal income, Arizona lets you subtract the full amount, so the state takes none of it, at any income level.

There is a catch that surprises many retirees, though: the federal government may still tax up to 85% of your benefits, depending on your total income. So the complete answer is "Arizona no, Washington maybe," and how much the federal side takes is something you can influence with planning. The rest of this guide explains how.

This guide is general and educational, current as of the 2026 tax year, and is not tax or legal advice. Please consult your tax professional about your own situation.

How The Federal Tax On Benefits Works

Whether the IRS taxes your benefits comes down to one number it calls your combined income, or provisional income. Three simple inputs decide it.

Your other income
wages, pension, IRA and 401(k) withdrawals, dividends + Tax-exempt interest
such as municipal bond interest + Half of your Social Security
50% of your annual benefit = Combined income

Compare that combined income to the thresholds below to see how much of your benefit can be taxed federally. The percentages are ceilings, not flat rates: they are the most that can be taxed, and the IRS phases it in gradually using the worksheet in IRS Publication 915.

Single, Head Of Household

Below $25,0000% taxable
$25,000 to $34,000Up to 50%
Above $34,000Up to 85%

Married Filing Jointly

Below $32,0000% taxable
$32,000 to $44,000Up to 50%
Above $44,000Up to 85%

Here is the part worth knowing: these thresholds were written into law in 1983 and 1993 and have never been adjusted for inflation. Because they never rise, a little more of every retiree's benefit becomes taxable over time. No matter how high your income, though, no more than 85% of your benefit is ever federally taxable.

Figures per IRS Publication 915. Thresholds are set by federal statute. This is general educational information, not tax advice.

What You Can Do About The Federal Tax

Because the federal tax depends on your combined income, and combined income depends on choices you control, planning can influence how much of your benefit is taxed. These are the levers we model, coordinated with your CPA.

Roth Conversions Before Claiming

Qualified Roth withdrawals do not count toward combined income. Converting in lower-income years, before benefits begin, can reduce the taxable income that pushes benefits over the thresholds later.

Explore Roth Conversions

Withdrawal Timing And Sequencing

Spreading taxable withdrawals across years, and choosing which accounts to draw from, can help keep combined income under a threshold in a given year.

Retirement Income Planning

When You Claim Benefits

The age you claim changes your benefit amount and how it interacts with your other income. Claiming decisions are best made alongside the rest of your income plan, not alone.

Social Security Planning

Coordinating The Whole Tax Picture

Charitable distributions, capital-gain timing, and the order of your income all feed combined income. A written tax plan pulls them together instead of treating each one on its own.

Tax Planning For Retirees

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Nicholas Bair, CFP®, ChFC®

Managing Partner & Senior Wealth Advisor

Nick began his career at JPMorgan in 2008, specializing in financial planning and investment management for pre-retirees and retirees, and rose to Senior Vice President of Wealth Management over a 15-year tenure before choosing independence. He serves on the Council of Professional Advisors for the Sun Health Foundation and lives in the West Valley with his family.

Plan Your Social Security With Confidence

If you want help deciding when to claim and how to manage the tax on your benefits, we would welcome a conversation. Share a few details and we will reach out to schedule a time that works for you. There is no cost and no obligation for the introductory call.

Prefer to pick a time yourself? Schedule An Introductory Call Or call us now at 602-336-4659

Frequently Asked Questions

Does Arizona tax Social Security benefits?

No. Arizona does not tax Social Security benefits at any income level. If a portion of your benefits is included in your federal income, Arizona lets you subtract the full amount, so the state collects nothing on them. Your benefits may still be partly taxable at the federal level depending on your combined income.

How much of my Social Security is taxable federally?

It depends on your combined income, which is your adjusted gross income plus any tax-exempt interest plus half of your benefits. For single filers, none is taxable below $25,000, up to 50% between $25,000 and $34,000, and up to 85% above $34,000. For married couples filing jointly, the thresholds are $32,000 and $44,000. No more than 85% of your benefit is ever federally taxable.

What is combined income for Social Security?

Combined income, sometimes called provisional income, is the figure the IRS uses to decide how much of your Social Security is taxable. It equals your adjusted gross income, plus any tax-exempt interest such as municipal bond interest, plus 50% of your annual Social Security benefits. Roth withdrawals do not count toward it, which is part of why Roth planning matters.

Do the Social Security tax thresholds adjust for inflation?

No, and this surprises many retirees. The combined-income thresholds were set in federal law in 1983 and 1993 and have never been adjusted for inflation. Because they stay fixed while incomes rise over time, a gradually larger share of retirees find part of their benefits federally taxable each year.

Which retirement income does Arizona tax?

Arizona taxes most other retirement income at its flat 2.5% state rate, including withdrawals from traditional IRAs, 401(k)s, and pensions. Social Security is fully exempt, military retirement pay is fully exempt, and up to $2,500 of certain government pension income can be subtracted. Arizona has no state estate or inheritance tax.

Can I reduce the tax on my Social Security benefits?

Often you can influence it, because the federal tax depends on combined income and combined income depends on choices you make. Strategies such as Roth conversions before claiming, spreading taxable withdrawals across years, and coordinating when you claim can all help manage which threshold you land in. The right approach depends on your full situation, so it is worth reviewing with a financial advisor and your tax professional.