Arkansas Retirement Taxes 2026: 3.9% Rate, $6,000 Exemption

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

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.

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.

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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. Whether its small-estate route of $100,000 reaches real property is not clearly stated in the statute, so treat that as unresolved rather than permission. 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.

Arkansas Retirement Taxes (2026): The 3.9% Rate, the $6,000 Exemption, and the Fee Schedule Nobody Quotes