Arkansas retirement taxes at a glance (2026)
| State income tax | Graduated, top rate 3.9%Arkansas has graduated rates from 0% to 3.9%. |
|---|---|
| Social Security | Not taxedArkansas does not tax Social Security benefits. |
| Pensions | Partly taxedUp to $6,000 per person of pension and qualified retirement income is exempt; the rest is taxed at regular rates. Exclusion: up to $6,000. |
| 401(k) and IRA withdrawals | Partly taxedIRA and 401(k) distributions count toward the same $6,000 per-person retirement exclusion; IRA distributions qualify from age 59 1/2. |
| Government pensions | Partly taxedGovernment pensions share the $6,000 per-person retirement exclusion; amounts above that are taxed. |
| Military retirement pay | Not taxedMilitary retired pay and SBP annuities are exempt from Arkansas income tax. |
| Estate tax | No |
| Inheritance tax | No |
| Property tax help for seniors | A homestead credit gives up to $600 a year, and homeowners 65+ or disabled can have their home's assessed value frozen. |
| Sales tax | Average combined state and local sales tax is about 9.46%, among the highest in the U.S. |
Recent changes and good to know
- The top rate was cut to 3.9% in recent years; confirm no further 2026 cut before publishing.
- The age 59 1/2 condition for IRA distributions comes from secondary sources; the DFA pension guide URL now redirects.
How to lower your retirement taxes in Arkansas
- Mix your income sources. Roth IRA withdrawals are tax-free at the federal level and generally in Arkansas too, so a Roth conversion before retirement can cut state tax later. Try the Roth conversion calculator.
- Watch federal Medicare costs. Large IRA withdrawals can raise your Medicare premiums. Check the 2026 IRMAA brackets.
- Think about your heirs. See what your IRA will really cost your family with the Family Tax Rate calculator.
- Comparing states? These have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
Frequently asked questions
Does Arkansas tax retirement income?
Partly: Arkansas exempts Social Security and military pay, and taxes other pension and IRA income above a $6,000 per-person exclusion at up to 3.9%.
Does Arkansas tax Social Security?
Arkansas does not tax Social Security benefits.
Does Arkansas tax pensions?
Up to $6,000 per person of pension and qualified retirement income is exempt; the rest is taxed at regular rates.
Does Arkansas tax 401(k) and IRA withdrawals?
IRA and 401(k) distributions count toward the same $6,000 per-person retirement exclusion; IRA distributions qualify from age 59 1/2.
Does Arkansas tax military retirement pay?
Military retired pay and SBP annuities are exempt from Arkansas income tax.
Sources (last verified 2026)
- Arkansas State Taxes for 2026 — AARP (2026-03-17)
- Arkansas Military and Veterans Benefits — U.S. Army (MyArmyBenefits) (2026-09-24)
- Arkansas Taxes on Pensions, IRAs, and 401(k)s — National Tax Reports (2026)
- Arkansas Retirement Income Tax: A Guide for Seniors (2026) — Brevy Care (2026)
Educational content only, not tax, legal or investment advice. Plans and tax laws change; confirm details with your employer's plan documents or your state revenue department. Smart Financial Lifestyle is not affiliated with any employer named on this site.