Retiring in Arkansas: how your income is taxed
Arkansas is fairly tax-friendly for retirees. On a typical retirement income it ranks tied for #37 of 51 with 1 other state for the lowest state income tax.
The rules in Arkansas
- Social Security: Social Security benefits are fully exempt from Arkansas income tax.
- Pensions: Each person can exclude up to $6,000 a year of employer pensions (public or private) and traditional IRA withdrawals combined. Married couples each get their own $6,000 if each has qualifying income. The exclusion can't be combined with the low-income filing option or the '65 Special' credit.
- 401(k), 403(b) and IRA withdrawals: 401(k) and IRA withdrawals count toward the same $6,000-per-person limit as pensions. Traditional IRA withdrawals qualify only after age 59½ (or on death or disability); 401(k) payouts count as employer-plan benefits.
- At 65 and older: Filers 65 or older who do not take the retirement income exemption get an extra $29 credit each.
Calculate your Arkansas retirement taxes
State income tax in Arkansas: $791 a year
In Arkansas, the 401(k)/IRA amount counts as IRA withdrawals, which don't qualify for the pension exclusion. Enter withdrawals from employer plans such as a 401(k) or 403(b) as pension.
In Arkansas you'd pay about $791 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $64,873 (7.3% total).
Arkansas ranks tied for #37 of 51 with 1 other state for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in Arkansas
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 401(k)/IRA | $0 | $0 | $0 |
| $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA | $791 | $445 | $4,336 |
| $40,000 Social Security, $40,000 pension, $50,000 401(k)/IRA, $10,000 other income | $3,131 | $2,771 | $19,812 |
Age 67 or older, 2026 rules including the federal senior deduction. For married couples, income is the household total and both spouses are 67 or older. State estimates apply Arkansas's main exclusions and may differ for income-tested credits.
States with lower retirement taxes
Moving to Arkansas in retirement?
Compare the tax on your Social Security, pension and 401(k)/IRA income, and typical living costs, with the state you'd leave. These are the states most households moving to Arkansas come from (IRS migration data, 2022–2023).
- Texas to Arkansas
- Missouri to Arkansas
- Oklahoma to Arkansas
- California to Arkansas
- Tennessee to Arkansas
- Florida to Arkansas
Frequently asked questions
Does Arkansas tax Social Security?
Not taxed. Social Security benefits are fully exempt from Arkansas income tax.
Does Arkansas tax pensions?
Partly taxed. Each person can exclude up to $6,000 a year of employer pensions (public or private) and traditional IRA withdrawals combined. Married couples each get their own $6,000 if each has qualifying income. The exclusion can't be combined with the low-income filing option or the '65 Special' credit.
Does Arkansas tax 401(k) and IRA withdrawals?
Partly taxed. 401(k) and IRA withdrawals count toward the same $6,000-per-person limit as pensions. Traditional IRA withdrawals qualify only after age 59½ (or on death or disability); 401(k) payouts count as employer-plan benefits.
Is Arkansas a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA, Arkansas charges about $791 in state income tax, ranking tied for #37 of 51 with 1 other state (lowest tax first).
Related
Sources: dfa.arkansas.gov, codes.findlaw.com, aarp.org. Rules reviewed .