I know this was posted a while ago and marked as solved. But I wanted to give some references for those who search this forum in the future.

A.R.S. Sect 43-1022(2)(a) says:

2. Benefits, annuities and pensions in an amount totaling not more than $2,500 received from one or more of the following:

(a) The United States government service retirement and disability fund, the United States foreign service retirement and disability system and any other retirement system or plan established by federal law, except retired or retainer pay of the uniformed services of the United States that qualify for a subtraction under paragraph 29 of this section.

and A.R.S. Sect 43-1022(29) says:

29. Benefits, annuities and pensions received as retired or retainer pay of the uniformed services of the United States in amounts as follows:

(a) For taxable years through December 31, 2018, an amount totaling not more than $2,500.

(b) For taxable years beginning from and after December 31, 2018, an amount totaling not more than $3,500.

Because of the wording of 43-1022(2)(a) which says EXCEPT section 29, my interpretation is that for a military pension, they may ONLY deduction $3500 for the same pension.  If on the other hand they have a civil service pension and a separate military pension they can deduct $2500 for the civil service and $3500 for the military.  And if both spouses are receiving military pensions, they may each deduct $3500.