Clear Money Guide
What this state guide covers
A quick view of the questions, practical details and source notes below.
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2026 edition · statute-cited · part of Clear Money Guide’s 51-state retirement tax series. This guide covers state taxes on retirement income and estate transfers; property and sales taxes vary by county and are outside its scope.
Updated July 24, 2026. Quick answer: Arkansas exempts Social Security entirely, gives every taxpayer a $6,000 exemption for employer-plan and IRA distributions (IRA withdrawals qualify at 59½+), and taxes the rest on a two-bracket schedule topping out at 3.9% — a rate that has been cut repeatedly and now undercuts most of its neighbors. Military retirement is fully exempt and stackable with the $6,000. The estate side is clean — no estate or inheritance tax — but Arkansas probate carries a statutory attorney-fee schedule most guides never mention.
How Arkansas taxes retirement income (statute-cited)
| Income tax | Two brackets: 2% / 3.9% top rate |
| Social Security | Not taxed (fully exempt) |
| Pension / 401(k) / IRA | $6,000/person exemption for employer-sponsored plan distributions; the same $6,000 covers traditional IRA distributions at 59½+ (earlier only on death/disability). Taxable above |
| Military retirement | Fully exempt — separate from and stackable with the $6,000 |
| Estate / inheritance tax | None |
Does Arkansas have an inheritance tax?
No. Arkansas levies neither an estate tax nor an inheritance tax, so nothing is owed to the state on what you leave. The cost that does bite in Arkansas is probate, which carries a statutory attorney-fee schedule most guides never mention — a computable number rather than an estimate. For the Arkansas/federal distinction and the 2026 federal filing threshold, see Does Arkansas have an inheritance tax?
Probate: the attorney-fee schedule nobody quotes
Arkansas sets a statutory fee basis for probate attorneys (Ark. Code §28-48-108) computed on the total market value of real plus personal property: 5% of the first $5,000; 4% of the next $20,000; 3% of the next $75,000; 2.75% of the next $300,000; 2.5% of the next $600,000; 2% above — the court may adjust it, but the schedule anchors the negotiation. Small estates: up to $100,000 (less encumbrances, excluding the homestead and statutory allowances) passes by affidavit under Ark. Code §28-41-101 after a 45-day wait. Context: probate cost by state · small-estate limits by state.
What the tax picture means for your own accounts
A state guide can set out how the rules treat retirement income in general, but not how they land on your particular mix of pensions, withdrawals and savings, and an adviser can work that through with you.
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Is Arkansas a good state to retire in for taxes?
Better than its word-of-mouth: Social Security untaxed, a 3.9% top rate that beats every neighbor except Tennessee and Texas (which tax nothing), and full military exemption. The honest limits are the small $6,000 exemption — a $50,000 annual 401(k) drawdown pays tax on most of itself — and the probate fee schedule, which argues for beneficiary designations and trust planning on larger estates. For pension-modest, Social-Security-heavy retirees, Arkansas is quietly one of the cheapest states in the country to grow old in.
Arkansas vs. common alternatives
| State | Social Security | Pension / 401(k) / IRA | Estate tax | Inheritance tax |
|---|---|---|---|---|
| Arkansas | Not taxed | $6,000/person exemption; 3.9% top rate above | None | None |
| Missouri | Not taxed | Public pensions exempt to SS max; private capped at $6,000 (income-tested) | None | None |
| Tennessee | Not taxed | Not taxed (no income tax) | None | None |
| Mississippi | Not taxed | Qualified retirement income fully exempt | None | None |
Comparison rows summarize general rules; see our 51-state retirement tax table for statute-cited detail.
Considering a Roth conversion? The converted amount is taxed as ordinary income in the year you convert, and Arkansas may treat it differently from the retirement income above — see how all 51 jurisdictions tax Roth conversions.
Finding a financial advisor in Arkansas
Per the SEC’s July 2026 Investment Adviser roster, Arkansas has 60 SEC-registered advisory firms (#36 nationally) managing $61.3 billion (#41 by AUM). Full breakdown: Arkansas advisor statistics. Reviewing fee structures: fee-drag calculator.
What probate costs in Arkansas
Arkansas is one of only seven jurisdictions that publish an actual statutory percentage schedule, so the probate fee can be computed exactly rather than estimated. Its small-estate route of $100,000 does reach real property: the Arkansas Supreme Court’s own Form 23 requires the affidavit to give “a legal description and valuation of the decedent’s real property, including homestead, if any” (Ark. Code Ann. § 28-41-101). Full detail with the governing statute, the court filing fee and the threshold: Arkansas probate cost. To price a specific estate, use the probate cost calculator.
Cite or share this guide
Suggested citation: Clear Money Guide, “Arkansas Retirement Taxes (2026 edition),” statute-cited; clearmoneyguide.com/arkansas-retirement-taxes/. Free to cite with attribution and a link. Data verified July 23–24, 2026 against state statutes, session laws, and revenue-department guidance.
Primary sources
- https://www.dfa.arkansas.gov/wp-content/uploads/206-PensionsAnnuities.pdf
- https://law.justia.com/codes/arkansas/title-26/subtitle-5/chapter-51/subchapter-3/section-26-51-307/
- https://taxfoundation.org/data/all/state/state-income-tax-rates-2026/
- https://taxfoundation.org/data/all/state/estate-inheritance-taxes/
- https://law.justia.com/codes/arkansas/title-28/subtitle-4/chapter-48/subchapter-1/section-28-48-108/
- https://codes.findlaw.com/ar/title-28-wills-estates-and-fiduciary-relationships/ar-code-sect-28-48-108/