Updated October 19, 2026. Quick answer: Line 29a of Arizona Form 140 is the subtraction for pensions paid by the federal government or by Arizona state and local retirement systems. It is for retirees who reported that pension income on their federal return, and the booklet sets an amount per taxpayer. The result is one of the subtractions that lower Arizona income on the way down the page.
What this form does
Form 140 is the Arizona resident personal income tax return, and the booklet puts the pension subtraction under the heading “Exclusion for U.S. Government, Arizona State or Local Government Pensions”. The form face labels the line “Exclusion for federal, Arizona state or local government pensions (up to $2,500 per taxpayer)”.
For the wider picture, see Arizona retirement taxes, whether Arizona taxes pensions and Arizona treatment of out-of-state pensions. Pensions from private plans and IRAs are reported on Form 1040 lines 5a and 5b and Form 1040 lines 4a and 4b of the federal return and are not part of this line.
Who it applies to
The booklet limits the line to income from listed public plans: “If you received pension income from any of the sources listed below, subtract the amount you received or $2,500, whichever is less.” “Include only the amount you reported as income on your federal return.”
For couples: “If both you and your spouse receive such pension income, each spouse may subtract the amount received or $2,500, whichever is less.”
The booklet also states a limit on federal plans and on other states: “applies only to those retirement plans authorized and enacted into the U.S. Code” and “retirement pensions from states other than Arizona do not qualify for this subtraction”.
The lines, one by one
| Line | What the form says |
|---|---|
| Line 29a, form face | “Exclusion for federal, Arizona state or local government pensions (up to $2,500 per taxpayer)” |
| Line 29a, instructions heading | “Line 29a” “Exclusion for U.S. Government, Arizona State or Local Government Pensions” |
| Line 29a, the rule | “If you received pension income from any of the sources listed below, subtract the amount you received or $2,500, whichever is less.” |
| Line 29a, what to include | “Include only the amount you reported as income on your federal return.” |
| Line 29a, both spouses | “If both you and your spouse receive such pension income, each spouse may subtract the amount received or $2,500, whichever is less.” |
| Line 29a, federal sources | “the United States Government Service Retirement and Disability Fund”; “the United States Foreign Service Retirement and Disability System”; “any other retirement system or plan established by federal law” |
| Line 29a, Arizona sources | “the Arizona State Retirement System”; “the Public Safety Personnel Retirement System”; “a retirement plan established for employees of a county, city, or town in Arizona” |
| Line 29a, federal plans note | “applies only to those retirement plans authorized and enacted into the U.S. Code” |
| Line 29a, other states | “retirement pensions from states other than Arizona do not qualify for this subtraction” |
| Line 29a, line 29b pointer | “Do not enter any subtraction for pension income received from retired or retainer pay of the Uniformed Services.” “The allowable subtraction for this pension type is entered on line 29b.” |
Line 29b, the exclusion for retired or retainer pay, is its own line with its own instructions and is not covered on this page. Line 29a is the one for government pensions.
The figures the form prints
The limit appears in the form face and in the instructions, each inside one line or sentence: “up to $2,500 per taxpayer” on the form and “subtract the amount you received or $2,500, whichever is less” in the booklet text.
Where the result goes next
Line 29a is one of the subtraction lines between the additions subtotal and the next subtotal. The form’s line 35 says “Subtract lines 24 through 34c from line 19.” That line 35 result is the next figure carried down the return.
A worked example
Illustration, not a state example. The booklet’s rule is the amount received or the $2,500 amount, whichever is less, for each spouse. Suppose one spouse received $1,800 (computed) of qualifying pension income that was reported on the federal return. The smaller of $1,800 (computed) and $2,500 is $1,800 (computed). If the other spouse received $4,000 (invented, for the computation), the smaller of $4,000 (invented, for the computation) and $2,500 is $2,500.
Edition and line numbers
This page reads the Arizona Form 140 Resident Personal Income Tax Booklet (2025) for tax year 2025, the current file the Arizona Department of Revenue served on 2026-10-19. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Putting a state pension from another state on line 29a. The booklet says “retirement pensions from states other than Arizona do not qualify for this subtraction”.
- Entering military retired pay on line 29a. The booklet says “Do not enter any subtraction for pension income received from retired or retainer pay of the Uniformed Services.”
- Subtracting more than the amount reported on the federal return. The booklet says “Include only the amount you reported as income on your federal return.”
Related: Arizona retirement taxes, whether Arizona taxes pensions, Arizona treatment of out-of-state pensions, Form 1040 lines 5a and 5b, and Form 1040 lines 4a and 4b.
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Answer againSources
- Arizona Form 140 Resident Personal Income Tax Booklet (2025), Arizona Department of Revenue: azdor.gov
- Related official page (not quoted): 2025 Arizona Form 140 Resident Personal Income Tax Instructions, Arizona Department of Revenue: azdor.gov
Read from the state revenue documents linked above on October 19, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the state revenue department is the right place to confirm anything consequential.