Sen. Mesnard Proposes Groundbreaking Bill to Exempt Retirement Savings from State Income Tax

A bill aimed at relieving the financial burden on retirees is currently under consideration by the Arizona House of Representatives.

Senate Bill 1371, introduced by Senator JD Mesnard, proposes that all retirement savings—including 401(k)s, IRAs, Roth IRAs, and pensions—be exempt from state income tax for individuals making withdrawals after the age of 59 and a half.

The Arizona Senate Republicans communicated via social media that the legislation’s intent is to alleviate financial pressures on residents over that age threshold. According to the Republicans, “This bill works to reduce financial burdens on Arizonans who are over the age of 59.5 by exempting retirement income from taxation.”

After passing the Finance Committee with no support from Democrats, SB 1371 made it through the Arizona Senate on March 6, following a party-line vote.

In a statement, Senator Mesnard emphasized the importance of allowing residents to retain more of their earnings. He asserted, “Arizonans deserve to keep more of what they earn so they can plan for retirement at an appropriate age. This bill allows retirees to enjoy their responsible savings while securing a comfortable and stable life in their golden years, free from unnecessary financial burdens.”

He further remarked on the rising cost of living, stressing the need to prioritize the welfare of citizens and foster a pro-growth, taxpayer-friendly environment. The bill was read for a second time in the Arizona House on March 17 and is awaiting evaluations from the Rules and Appropriations committees.

Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories or email tips to Matthew@azfreenews.com.