Updated October 16, 2026. Quick answer: Yes, unless you opt out. Arkansas treats periodic pension and annuity payments like wages, and the form lets you choose not to have it: “CHECK HERE if you do not want any Arkansas income tax withheld”.
More on public pension systems, topic by topic: Arkansas LOPFI return to work after retirement.
More on public pension systems, topic by topic: Arkansas ATRS disability retirement, Arkansas ATRS divorce and QDRO and Arkansas ATRS purchasing service credit.
Arkansas pension withholding at a glance
| Item | What the documents say |
|---|---|
| Is state withholding required on regular pension payments? | Yes, unless you check the no-withholding box on Form AR4P (some periodic payments, such as certain nonqualified deferred compensation plan payments, are already defined as wages and cannot use the AR4P; ask the payer) |
| Default rate if you give the payer no form | With no AR4P on file the payer withholds as if you were married claiming three allowances, using the Arkansas tables |
| Lump sum or one-time payment | Nonperiodic payments: a flat 3% unless you opt out. Eligible rollover distributions paid to you: a flat 5% that cannot be waived; distributions required by law, a specified series of equal payments and hardship distributions are not eligible rollover distributions, and a full direct rollover to an IRA or qualified plan is not withheld on |
| Form to start, change or stop it | Form AR4P (R 12/04/2025), given to the payer |
| Changed for 2026? | No change stated; the form read is the December 2025 revision |
What the Arkansas documents say
On periodic pension and annuity payments the Arkansas payer withholds as for wages unless you check the no-withholding box on Form AR4P. With no AR4P on file, the payer withholds as if you were married and claimed three withholding allowances.
For a one-time payment the rules differ: “Your payer must withhold at a flat 3% rate from nonperiodic payments”. You can opt out of that 3% on line 1 of the form. An eligible rollover distribution paid to you is different, because the form says such payments “are subject to a flat 5% state withholding rate”, and that rate cannot be waived.
The AR4P stays in effect until you change or revoke it. To restart withholding on periodic payments after opting out, you complete another AR4P and submit it to your payer. If you want withholding at the rate set by law (married with three allowances), write Revoked next to the checkbox on line 1; otherwise give your filing status and number of allowances. The form also lets you add an extra amount to be withheld.
What the printed rate means in dollars
For a $50,000 nonperiodic payment with no opt-out: 3% of $50,000 is $1,500 (computed as $50,000 times 3%).
For a $50,000 eligible rollover distribution paid to you: 5% of $50,000 is $2,500 (computed as $50,000 times 5%).
These are illustrations of the rate the state document prints, not a prediction of how your payer will calculate or what you will owe at filing.
What a mover should know
This page is about Arkansas as a state of residence. An instruction line written for a nonresident or part-year filer is not the rule for a resident, and none of the documents read settles a part-year or two-state case, so check each state’s own rule. The federal side is the same everywhere; CMG’s federal 20% withholding on a pension lump sum page covers it, state tax withholding on IRA and 401(k) withdrawals in Arkansas covers the account side, and state withholding on retirement withdrawals lists the other states checked.
What the documents do not say
- If the plan administrator transfers the entire distribution in a direct rollover to a traditional IRA, qualified pension plan, governmental section 457(b) plan (if the plan allows it) or tax-sheltered annuity, the AR4P instructions say the payer will not withhold Arkansas income tax. The documents read describe no change for 2026 beyond the December 2025 revision date of the form.
Common mistakes
- Giving the payer a federal W-4P and assuming it also settles the state; check whether the state’s own form is needed.
- Assuming the answer for one state applies to another, or that state withholding settles the state tax owed at filing.
Related: state tax withholding on IRA and 401(k) withdrawals in Arkansas, Arkansas retirement taxes, whether Arkansas taxes pensions, state withholding on retirement withdrawals, and retirement withholding calculator.
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Answer againSources
- AR4P Employee’s Withholding Certificate for Pensions and Annuity Payments with instructions (R 12/04/2025): https://www.dfa.arkansas.gov/wp-content/uploads/AR4P2026.pdf
- IRS Tax Topic 413, Rollovers from retirement plans: https://www.irs.gov/taxtopics/tc413
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.