How Arkansas taxes retirement income

Some 2026 figures pending confirmation Tax year 2026 · research last updated October 2, 2026

Arkansas doesn't tax Social Security benefits.
Exclusions and subtractions for retirement income (details below):
- $6,000 retirement income exemption: at most $6,000 per person.
Rates for 2026: 0% to 3.7%, graduated.

At a glance

Income tax	Yes
Rates (2026)	0% to 3.7%, graduated
Starts from	Its own definition of income (not the federal return)
Standard deduction	$2,470 single, $4,940 married filing jointly
Personal credit	$29 per person
Age 65 and older	$29 extra credit per person
Social Security	Not taxed
Retirement income exclusions	1 (see below)
Roth conversions	Taxable
Capital gains	Special treatment (see below)
Local income tax	None

Tax rates

Brackets apply to Arkansas taxable income. Other filing statuses are in the rules reference.

Rate	Single: taxable income	Married filing jointly: taxable income
0%	$0 to $5,599	$0 to $5,599
2%	$5,599 to $11,199	$5,599 to $11,199
3%	$11,199 to $15,999	$11,199 to $15,999
3.4%	$15,999 to $26,399	$15,999 to $26,399
3.7%	$26,399 and up	$26,399 and up

Arkansas doesn't tax Social Security benefits.

Pensions, IRAs and 401(k)s

$6,000 retirement income exemption (A.C.A. 26-51-307)

Limit: $6,000 per person · Applies to: pensions, annuities, 401(k) distributions/403b/457 and other employer plans, IRA distributions (only if age 59.5+, or death/disability)

First $6,000 per taxpayer of taxable distributions from public or private employment-related retirement plans (no age requirement; recipient need not be retired) and from traditional IRAs received after age 59 1/2 (or on account of death/disability). Combined cap across all plans is $6,000 per taxpayer, not per plan; a surviving spouse gets a single $6,000. Taken separately by each spouse against his/her own distributions (AR1000F lines 18A/18B). Using the exemption bars the Low Income Tax Tables and the '65 Special' credit. Military retirees whose (fully exempt) military retirement already exceeds $6,000 cannot also claim it; if less, the remainder is available. Social Security, interest, dividends and capital gains do not count toward it.

Roth conversions

A Roth conversion counts as taxable income for Arkansas. Whether a retirement income exclusion can cover part of it depends on the rules above.

Capital gains

50% of Arkansas net capital gain (net long-term gain after netting short-term losses) is excluded; net capital gain above $10,000,000 in a year is fully exempt; net short-term capital gains are 100% taxable (Form AR1000D). Capital losses limited to $3,000 ($1,500 per taxpayer filing status 4/5).

Credits and relief for older residents

Age 65 personal tax credit. Additional $29 credit for each taxpayer/spouse age 65 or over (2025 return test: 'On January 1, 2026, were you age 65 or over?').
'65 Special' credit. A further $29 per taxpayer age 65+ who does NOT claim the $6,000 retirement exemption (you cannot take both). Relevant only when retirement distributions are tiny.
Low Income Tax Tables. Filers whose total income from all sources (including non-taxable income such as Social Security) falls under the table limits (2025 table caps shown as $29,000 and $36,100 on different tables, varying by filing status and dependents; married must file jointly) use special tables with the standard deduction built in; unavailable if the $6,000 retirement exemption or military exemptions are used, or if itemizing. Low-income retirees may elect to forgo the $6,000 exemption to use these tables.

More detail from our research notes

Arkansas computes its own income (AR1000F), not federal AGI; items generally follow federal amounts. RATE STRUCTURE (Act 1 of the 2026 First Extraordinary Session, HB1001, approved 5/6/2026, retroactive to 1/1/2026; A.C.A. 26-51-201(a)(4)): the brackets above apply only when net taxable income <= $94,700. If net income > $94,700 a different table applies: 2% on the first $4,700 and 3.7% on the rest, minus a bracket adjustment of $290 at $94,701-$94,800 falling by $10 per $100 band to $10 at $97,501-$97,600 and $0 from $97,601. The same table applies to every filing status (joint filers apply it to combined income; filing status 4 lets spouses compute separately on one return). Tables are indexed annually under 26-51-201(d); the Act's 2026 numbers already match DFA's indexed 2026 withholding brackets. For net income under $100,001 DFA tax tables look up income at the $50 midpoint of each $100 row, so table tax can differ by ~$2 from the exact formula. Standard deduction $2,470 per taxpayer (2025 booklet; also used in the 2026 withholding formula); joint $4,940. Personal tax credit $29 per taxpayer/spouse (additional credits for HoH, 65+, deaf, blind). Early IRA/plan distributions: additional 10% of the federal early-distribution penalty is owed to Arkansas. Military retirement fully exempt.

Pending confirmation

These points were still being confirmed against Arkansas's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.

7 items

2026 standard deduction: $2,470 is the 2025 booklet amount and the 2026 withholding-formula amount; the SD is inflation-indexed and the 2026 AR1000F booklet (expected December 2026-January 2027, https://www.dfa.arkansas.gov/office/taxes/income-tax-administration/individual-income-tax/) could differ. Note the withholding formula's SD has historically equalled the PRIOR year's return amount (2024 formula $2,340 vs 2024 return $2,410), so 2026's return SD may be higher than $2,470.
2026 personal tax credit $29 (from the 2026 withholding formula); confirm in the 2026 booklet (same date/URL).
Whether Act 1's 2026 tables will be further inflation-adjusted for 2026 under 26-51-201(a)(5)/(d) (assumed not; the Act's figures equal DFA's 2025 and 2026 indexed bracket bounds). DFA did not repost a revised 2026 withholding formula at the original URL as of 2026-10-02 (the file there is still the Dec 2025 3.9% version).
Whether a Roth conversion from a traditional IRA (age 59.5+) qualifies for the $6,000 exemption: the instructions say 'traditional IRA distribution after reaching age 59 1/2' and do not address conversions; assumed yes pending DFA confirmation.
Age-65 credit timing: 2025 booklet tests age on January 1 of the following year (i.e., 65 by Jan 1, 2027 for tax year 2026); confirm for 2026.
Low Income Tax Table income limits for 2026 not published; 2025 limits cited are from the 2025 booklet headers.
2027: no enacted individual change; brackets, the $94,700 high-income threshold and the standard deduction are indexed (26-51-201(d): DFA prescribes the 2027 tables by December 15, 2026). Taxtirement indexes `brackets`, `highIncomeStart` and the standard deduction but not `highIncomeLowBand` ($4,700) or the $290/$10/$100 bracket-adjustment table, which (d) would also round-adjust; replace with DFA's 2027 tables when published.

Sources

Every figure comes from these documents, mostly the state's own forms, instructions and statutes.

Act 1 of 2026 First Extraordinary Session (HB1001): 2026 rate tables, >$94,700 table, bracket adjustments; 2027 check (2026-10-02): Act 1 sections 2-3 change only corporate rates for 2027; no other 2025/2026 enacted individual change relevant to retirees found (secondary summary: Wright Lindsey Jennings 2025 Arkansas tax legislation summary, used only to find…https://arkleg.state.ar.us/Acts/FTPDocument?path=%2FACTS%2F2026S1%2FPublic%2F&file=1.pdf&ddBienniumSession=2025%2F2026S1
2026 DFA withholding formula (pre-Act 1 version): 2026 brackets, $2,470 standard deduction, $29 personal credit, worked examplehttps://www.dfa.arkansas.gov/wp-content/uploads/whformula_2026.pdf
2025 AR1000F/AR1000NR instructions: $6,000 exemption rules, 59 1/2 IRA rule, SS exempt, personal credits incl. 65 and 65 Special, standard deduction, low income tables; Itemized deductions (group-d, 2026-10-02): Form AR3 instructions pp.17-18 (medical over 10% of AR AGI, real estate and personal property tax in full, no Arkansas income or sales tax, contributions up to 60% of AGI, status-4 proration by AGI lines 31-35);…https://www.dfa.arkansas.gov/wp-content/uploads/2025_AR1000F_and_AR1000NR_Instructions.pdf
2025 AR1000D capital gains: 50% of net capital gain taxed, >$10M exempthttps://www.dfa.arkansas.gov/wp-content/uploads/2025_AR1000D_CapitalGains.pdf
Secondary: DFA revised 2026 withholding to 3.7% top rate on May 29 2026https://news.bloombergtax.com/payroll/arkansas-reduces-highest-tax-rate-in-2026-withholding-methods

Taxtirement's Arkansas calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.

See your own years. Taxtirement applies these Arkansas rules, and the federal and Medicare rules, to your household for every year of retirement, and shows the calculation behind each number. Coming November 2026 for iPhone, iPad and Mac.

This page summarizes Arkansas's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.