Does Arkansas tax retirement income?

Does Arkansas tax Social Security?

Arkansas does not tax Social Security benefits.

Social Security, VA benefits, workers’ compensation and Railroad Retirement benefits are exempt, with no age or income test.

Your federal return is a separate question — see how much of your benefit the IRS taxes with the taxable Social Security calculator.

Are pensions taxed in Arkansas?

The first $6,000 per person of employer pension income is exempt; the rest is taxed.

The first $6,000 a year of public or private employer-sponsored retirement benefits is exempt per taxpayer, at any age and with no income test. That $6,000 is one combined cap across all plans, including IRAs. A surviving spouse is limited to a single $6,000.

Public vs. private pensions: Public and private employer pensions share the same $6,000 exemption.

Are IRA and 401(k) withdrawals taxed in Arkansas?

IRA withdrawals after 59½ and 401(k) payouts share the same $6,000-per-person exemption.

Traditional IRA distributions qualify only after age 59½ (or on death or disability); 401(k) and other employer plans fall under the employer-plan exemption. Total exemptions from all plans cannot exceed $6,000 per taxpayer.

Required minimum distributions (RMDs) are IRA and 401(k) withdrawals, so the same rules apply. Estimate your RMD.

Is military retirement pay taxed in Arkansas?

Military retirement pay is fully exempt. If it uses less than $6,000, the rest of the $6,000 exemption can cover other retirement income.

What is Arkansas’ income tax rate?

5 brackets, topping out at 3.7%.

Top rate 3.7% for 2026, down from 3.9% in 2025 (Act 2 of 2026, retroactive to January 1). Arkansas taxes each person separately — married couples may file separately on the same return — and the brackets are indexed each year.

This table applies when net income is $94,700 or less, for every filing status. Above $94,700 a different table applies: 2% on the first $4,700 and 3.7% on the rest, less a bracket adjustment that shrinks from $290 to $0 between $94,701 and $97,600. Above $97,600 that works out to 3.7% of net income minus $79.90.

Standard deduction and exemptions

For 2025 the standard deduction is $2,470 single and $4,940 married filing jointly. The 2026 return amount is indexed and not yet published (the 2026 withholding formula still uses $2,470). Each personal tax credit is $29.

What tax breaks do seniors get in Arkansas?

Filers 65 or older get an extra personal tax credit, and anyone 65+ who does not claim the retirement income exemption gets an additional $29 “65 Special” credit.

What changed for 2026?

Act 2 of the 2026 First Extraordinary Session (approved May 6, 2026) cut the top individual rate to 3.7% for tax years starting January 1, 2026. We found no 2025 or 2026 law changing the $6,000 retirement exemption.

2026 rates come from Act 2 of the 2026 First Extraordinary Session; retirement exemptions from the 2025 AR1000F instructions, unchanged.