How to apply for Arkansas income tax: $6,000 retirement income exemption and Social Security exemption

Who it's for

Arkansas does not tax Social Security benefits, VA benefits, or Railroad Retirement benefits. If you get money from a work-related pension or retirement plan, including disability retirement, the first $6,000 a year is not taxed. Traditional IRA withdrawals taken after age 59 and a half also count toward the same $6,000 exemption. Each spouse with retirement income gets a separate $6,000. Military retirement pay is not taxed. If you are 65 or older and do not claim the retirement exemption, you can claim an extra $29 tax credit instead (the "65 Special" box). You claim these on your Arkansas income tax return (Form AR1000F). For help, call the DFA Individual Income Tax Hotline at 1-501-682-1100 or toll-free 1-800-882-9275.

What you'll need

• Form 1099-R for each pension or IRA payment (attach it to your return)
• Arkansas Form AR1000F (full-year resident return)

Where to apply

What to say when you call

"Hello, I'm calling to ask about Arkansas income tax: $6,000 retirement income exemption and Social Security exemption. I'd like to know whether I may qualify, what documents I need, and whether I can apply online, by mail, by phone, or in person. I understand I may need form 1099-R for each pension or IRA payment (attach it to your return), arkansas Form AR1000F (full-year resident return) — is anything else required? What is the best next step?"

Tip: have a pen ready, ask for the person's name, and write down any case or reference number they give you.

Step by step

1. Gather your Arkansas Form AR1000F and a Form 1099-R for each pension or IRA payment.
2. Check which tax break fits your situation. Arkansas does not tax Social Security, VA benefits, Railroad Retirement benefits, or military retirement pay. For other work-related pensions, disability retirement, and traditional IRA withdrawals taken after age 59 and a half, you may exempt up to $6,000 per person total from all pensions and IRAs combined.
3. Complete Form AR1000F and claim the retirement income exemption if it applies to you. If you are married and each spouse has retirement income, each spouse may claim a separate $6,000 exemption.
4. If you are age 65 or older and do not claim the retirement exemption, claim the extra $29 credit by checking the "65 Special" box instead. Do not take both the retirement exemption and the $29 credit.
5. Attach each Form 1099-R to your return.
6. Submit your Arkansas return online. If you need help, call the DFA Individual Income Tax Hotline at 1-501-682-1100 or toll-free at 1-800-882-9275.

What to expect: After you submit your Arkansas return, DFA reviews the claim and makes the final decision. Processing times vary, so ask the agency for an estimate if needed. Claim this exemption or credit again each year when you file your Arkansas tax return. Keep in mind that early IRA withdrawals do not count unless they are due to death or disability, and military retirees who already exempt more than $6,000 cannot also take the $6,000 exemption.

Renewals

annual (claim on each year's tax return)