Clear Money Guide
What this state guide covers
A quick view of the questions, practical details and source notes below.
Updated August 12, 2026. Quick answer: Yes. Arkansas taxes a Roth conversion at its regular rates (top 3.9%). The $6,000 retirement exemption reaches traditional-IRA money only from age 59½, so a conversion before then gets nothing; from 59½ a conversion looks like an ordinary IRA distribution and appears to qualify, but Arkansas DFA guidance does not address conversions, so we flag that rather than promise it.
Confidence note: high on the rate and on the age rule; lower on whether the $6,000 exemption is applied to conversion income after 59½, because the DFA guidance we can cite does not address conversions.
Why a conversion is a different question from a withdrawal
Almost every state summary answers “how does Arkansas tax retirement income?” That is a question about distributions. A Roth conversion is not a distribution in the ordinary sense — it is a voluntary election to recognise income now in exchange for tax-free growth later. Whether a state’s retirement exclusion reaches that election is a separate question, and it is the one that decides your bill.
The number that matters here is small and age-gated. A conversion before 59½ has no Arkansas shelter at all; from 59½ the same $6,000 that covers pension and IRA income is the most that can come off, and your other retirement income is competing for it.
Two practical consequences. Converting after 59½ rather than before is the difference between no exemption and a possible one. And because $6,000 is small against most conversions, the timing lever — splitting across tax years, or converting in a low-income year — moves more money than the exemption does.
What Arkansas does with the converted amount
State income tax: graduated to 3.9% (2 brackets: 2%/3.9%)
How Arkansas treats IRA and plan income: Up to $6,000 per person exemption for employer-sponsored pension/qualified plan distributions; same $6,000 covers traditional IRA distributions taken at 59½ or later (earlier only on death/disability). Amounts above $6,000 taxable.
What to ask a preparer about Arkansas
Does the $6,000 exemption get applied to conversion income after 59½ in practice, and how much of it will my other retirement income already have used?
The state bill is only half the decision
What a conversion costs depends on the federal bracket it fills as well as the state you are resident in when you make it, and an adviser can price both together before you decide how much to convert.
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Converting around a move
Converting in the year you move into Arkansas is the case that catches people. Residency at the moment of conversion is what generally determines which state gets to tax it, so a conversion executed a week before a move and one executed a week after can produce different bills.
Four separate taxes change when you move, not one: income tax on withdrawals, treatment of Social Security, estate tax, and inheritance tax. A state that looks good on conversions can be worse on the other three.
The state bill is the smaller half
Whatever Arkansas does, the conversion is federal ordinary income first. The federal bracket you land in, and whether the conversion pushes you over an IRMAA threshold two years later, will usually move more money than the state line does. The state answer tells you whether to convert here; the federal answer tells you how much to convert at once.
Paying the tax from outside the account matters more than either. Using converted dollars to pay the bill shrinks the balance that was the entire point of converting.
Sources
Authority: Ark. Code § 26-51-307; DFA Subject 206: Pensions and Annuities.
Compiled from state statutes, session laws and revenue-department publications and adversarially verified in July 2026. Dataset confidence for Arkansas: high.
This page states what the cited authority says. It is not tax advice, and a conversion large enough to matter is worth putting in front of a preparer who can see your whole return.