Arkansas Retirement Taxes 2026: 3.7% Rate, $6,000 Exemption

How Arkansas taxes retirement income (statute-cited)

Does Arkansas have an inheritance tax?

Probate: the attorney-fee schedule nobody quotes

Is Arkansas a good state to retire in for taxes?

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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 at graduated rates topping out at 3.7% for 2026 — a rate that has been cut repeatedly and now undercuts most of its neighbors. Military retirement is fully exempt, but claiming it generally means giving up the $6,000 exemption (only an unused amount under $6,000 carries over). The estate side is clean — no estate or inheritance tax — but Arkansas probate carries a statutory attorney-fee schedule most guides never mention.

More on public pension systems, topic by topic: Arkansas LOPFI service credit purchase, Arkansas LOPFI benefit payment options and Arkansas LOPFI return to work after retirement.

More on public pension systems, topic by topic: Arkansas ATRS T-DROP, Arkansas ATRS working after retirement and Arkansas ATRS purchasing service credit.

More state retirement-income schedules, line by line: Arkansas AR1000F retirement exemptions.

Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Arkansas tax on inherited IRA withdrawals.

Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Arkansas tax 403(b) and 457(b) withdrawals.

Before the tax question, the local police and fire system (LOPFI), with its options and DROP rules from its own handbook: Arkansas LOPFI retirement decisions.

Drawing a pension? Whether the state withholds tax from it, from its own documents: Arkansas tax withholding on pension payments.

Selling your home? How the state taxes the profit, from its own tax documents: Does Arkansas tax the profit from selling your home?.

The state’s income tax schedule: the Arkansas tax brackets for 2026.

Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Arkansas tax withholding on IRA and 401(k) withdrawals.

Taking money out of your TSP? How the state taxes it, from its own tax documents: Does Arkansas tax TSP withdrawals?.

For trust income specifically: does Arkansas tax trust income.

For dividends and interest specifically: does Arkansas tax dividends and interest.

For annuity payments specifically: does Arkansas tax annuity income.

Making a gift or planning an estate? The state’s gift tax answer, from its own tax documents: Does Arkansas have a gift tax?.

Planning for what you leave behind? The state’s estate tax answer, from its own tax documents: Does Arkansas have an estate tax?.

For military retired pay: does Arkansas tax military retirement.

Saving for a child’s college? The state’s 529 break has its own page: Arkansas 529 plan tax deduction.

For the sale of stocks, funds or real estate: does Arkansas tax capital gains.

For 401(k) and IRA withdrawals specifically: does Arkansas tax 401(k) and IRA withdrawals.

Before the tax question, the ATRS annuity options, T-DROP and refund rules: Arkansas ATRS retirement decisions.

Before the tax question, the APERS annuity options, DROP and refund rules: Arkansas APERS retirement decisions.

How Arkansas taxes retirement income (statute-cited)

Income tax	Graduated, 3.7% top rate (2026): net income of $94,700 or less uses a table of 0% (to $5,599), 2% ($5,600 to $11,199), 3% ($11,200 to $15,999), 3.4% ($16,000 to $26,399) and 3.7% ($26,400 to $94,700); net income above $94,700 uses a table of 2% on the first $4,700 and 3.7% above that, reduced by a bracket adjustment amount for net income of $94,701 to $97,600
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, but not stackable: claiming it forgoes the $6,000 exemption except for any unused amount under $6,000 (Ark. Code §26-51-307(e) and (f))
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 3.7% top rate that beats most of its neighbors (Tennessee and Texas tax nothing, and Louisiana’s flat 3% is lower too), 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 is one of 43 jurisdictions that do not tax Social Security at any income level in 2026. The other 8 exempt benefits only up to an income or age limit. Full rules and statutes: the 51-state table.

Arkansas vs. common alternatives

State	Social Security	Pension / 401(k) / IRA	Estate tax	Inheritance tax
Arkansas	Not taxed	$6,000/person exemption; 3.7% 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.

Figures verified against Arkansas Code §§26-51-307, 28-41-101 and 28-48-108, Arkansas DFA Subject 206 and the 2025 AR1000F instructions, the DFA fiscal impact statement for 2026 first extraordinary session SB1 (Act 2), and the Louisiana Department of Revenue rate page on September 30, 2026; the Arkansas no-estate-or-inheritance-tax statement, the seven-jurisdiction probate comparison and the SEC advisor statistics were not re-checked.

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Arkansas Retirement Taxes (2026): The 3.7% Rate, the $6,000 Exemption, and the Fee Schedule Nobody Quotes

What this state guide covers