Updated October 30, 2026. Quick answer: Partly. The 2025 instructions never name CSRS or FERS, but they extend the retirement exemption to public and private employment related plans: “The method of funding is irrelevant.” The first $6,000 is exempt, and the instructions say “(The recipient does not have to be retired.)”
What Arkansas does with a FERS or CSRS annuity
| Question | What the Arkansas documents say |
|---|---|
| What the source says | The Arkansas instructions never name CSRS, FERS or federal civil service pensions, but they extend the retirement exemption to distributions from public or private employment-related retirement systems, plans, or programs, so a federal annuity falls under the general partial exemption rather than a full one. |
| Amount or limit | The first $6,000 of employer-sponsored retirement income (including disability retirement) is exempt from tax, entered as a Less $6,000 reduction on lines 18A and 18B of the AR1000F. |
| State rate printed | The 2025 instructions print a marginal income tax rate of 3.9% for 2025. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the Arkansas documents’ own words
- “eligible for the $6,000 exemption for retirement or disability benefits” (2025 AR1000F and AR1000NR Instructions)
- “Marginal Income Tax rates for 2025 are 3.9%, as amended in 2024.” (2025 AR1000F and AR1000NR Instructions)
- “Retirement benefits received by a member of the uniformed services are exempt” (2025 AR1000F and AR1000NR Instructions)
How this differs from other pensions in Arkansas
The federal pension is treated the same as other public or private employment-related pensions under the $6,000 exemption, and the method of funding is irrelevant; military retirement benefits are exempt in full under a separate rule. See also Does Arkansas tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The state documents cited here do not address TSP withdrawals, though they state a traditional IRA distribution after age 59 and one-half qualifies for the first $6,000 exemption. For the Thrift Savings Plan itself, see Does Arkansas tax TSP withdrawals? and the TSP calculator.
Where this rule sits on the Arkansas return
The exemption is entered as a Less $6,000 reduction on lines 18A and 18B of the AR1000F, the line pair for retirement benefits received.
Checks before you rely on this answer
- Enter the first $6,000 once per person, not once per pension, and read lines 18A and 18B together.
- Compare the exemption with your federal taxable annuity, because only the taxable amount is in income to begin with.
- If you also draw from a traditional IRA, read the age test for IRA distributions separately; it differs from the employer plan rule.
What the Arkansas documents leave open
The instructions do not mention CSRS, FERS or federal civil service by name, so the federal case is read from the public employment related plans wording. The statute text was not read, TSP withdrawals are not addressed, and no 2026 booklet exists yet.
Common mistakes
- Expecting a full exemption like military retirement. Uniformed service retirement is exempt in full; a federal civilian annuity falls under the $6,000 exemption.
- Waiting until you retire to claim the exemption. The instructions say the recipient does not have to be retired.
Related: Does Arkansas tax pensions?, Arkansas military retirement pay, Arkansas retirement deduction line by line, and FERS, TSP and Social Security sequencing.
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Answer againSources
- 2025 AR1000F and AR1000NR Instructions: https://www.dfa.arkansas.gov/wp-content/uploads/2025_AR1000F_and_AR1000NR_Instructions.pdf
- 2025 AR1000F Full Year Resident Individual Income Tax Return: https://www.dfa.arkansas.gov/wp-content/uploads/2025_AR1000F_FullYearResidentIndividualIncomeTaxReturn_1.pdf
Read from the state documents linked above on October 30, 2026. General information, not tax advice.