Miscellaneous

Arkansas Military Retirement Income Tax Exemption

All military retired pay, including Guard and reserve retirement, and Survivor Benefit Plan annuities are exempt from Arkansas income tax. The catch is that a retiree whose exempt military pension is $6,000 or more loses the separate $6,000 exemption for any other pension or IRA.

Also called: 26-51-307(e), 26-51-307(f), military retired pay, Survivor Benefit Plan, Act 141 of 2017, Act 358 of 2023, $6,000 retirement exemption, Public Health Service, NOAA, Space Force.

For: Veteran or service member, survivor.

Where it applies

Written for the jurisdictions listed here.

ArkansasState

Arkansas has exempted military retired pay in full since tax year 2018. What is exempt. Arkansas Code section 26-51-307, subsection (e): "retirement benefits received by a member of the uniformed services" and "survivor benefits that are funded by the retirement pay of a member of the uniformed services". A member of the uniformed services is a retiree of the Army, Marine Corps, Navy, Air Force, Space Force or Coast Guard, their reserve components, the National Guard of any state, and the commissioned corps of the Public Health Service and NOAA. Act 508 of 2025 added the Space Force by name from August 5, 2025. There is no age, residence or dollar limit. The trade-off with other pensions. Every Arkansas resident may exclude the first $6,000 of employer retirement benefits or IRA distributions under subsection (a). Subsection (f) says a taxpayer claiming the military exemption is not eligible for that $6,000, except that Act 358 of 2023 lets a taxpayer whose military exemption is less than $6,000 claim the difference against other retirement income. The Department of Finance and Administration's instructions put it plainly: "Retirees cannot claim the $6,000 exemption for traditional or employer sponsored distributions if their military retirement exemption exceeds $6,000." So a retired sergeant who also draws a state teacher pension pays tax on the whole teacher pension, while a neighbour with only the teacher pension excludes $6,000 of it. What else is outside Arkansas tax. VA disability compensation and dependency and indemnity compensation are not federal income and never reach the Arkansas return. The Department's 2025 instructions add that disability income "MAY BE exempt from tax pursuant to Internal Revenue Code §104", which reaches military disability retired pay for injury or sickness from active service, and that Act 238 of 2009 extends the time to claim a refund when VA later decides that retired pay was for a service-connected disability. How to claim it. Report the military pension and the SBP annuity on the retirement lines of Form AR1000F or AR1000NR and attach the 1099-R. The exemption is not automatic.

Thresholds

Thresholds for Arkansas Military Retirement Income Tax Exemption
Gate	Rule
A military pension of $6,000 or more cancels the $6,000 exemption for other retirement income	Ark. Code Ann. § 26-51-307(f), as amended by Act 358 of 2023; DFA AR1000F instructions.

Sources

Legislation

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Act 508 of 2025 (HB 1638) Added the Space Force across Arkansas law, including the military pay and retirement exemptions and the licensing examination credit

Catalog reconciledEnactedScope changed

Signed 2025-04-10Takes effect 2025-08-05

Introduced Done, 2025-03-03, step 1 of 6
In committee Done, 2025-03-03, step 2 of 6
Passed one chamber Done, 2025-04-02, step 3 of 6
Passed both chambers Done, 2025-04-07, step 4 of 6
Signed by the governor Done, 2025-04-10, step 5 of 6
In effect Done, 2025-08-05, step 6 of 6

Expands benefits Adds the Space Force to the military pay and retirement exemptions and the licensing examination credit.

Amended dozens of definitions to include the Space Force, among them Ark. Code Ann. § 26-51-306(c) (military pay), § 26-51-307(e)(2) (military retirement), § 17-1-101 (the 10 percent licensing examination credit, which until then named only the Army, Navy and Marine Corps and now also the Air Force, Space Force and Coast Guard), § 21-4-301 (military leave) and § 12-62-413 (state active duty employment protection). Approved April 10, 2025; effective August 5, 2025.

Act 358 of 2023 (SB 313) Let a military retiree whose exempt pension is under $6,000 use the rest of the $6,000 retirement exemption on other pensions

Catalog reconciledEnactedScope changed

Signed 2023-03-21

Introduced Done, 2023-02-23, step 1 of 6
In committee Done, 2023-02-23, step 2 of 6
Passed one chamber Done, 2023-03-09, step 3 of 6
Passed both chambers Done, 2023-03-15, step 4 of 6
Signed by the governor Done, 2023-03-21, step 5 of 6
In effect Done, 2023-03-21, step 6 of 6

Expands benefits Lets a retiree whose military exemption is under $6,000 use the rest of the $6,000 exemption on other pensions.

Amended Ark. Code Ann. § 26-51-307(f) for tax years from January 1, 2023. A taxpayer claiming the full military retirement exemption still cannot also claim the $6,000 exemption for other retirement income, except for the difference when the military exemption is below $6,000. Approved March 21, 2023.

Updated

Last updated 2026-10-24.

What changed then:

New official source added: “DFA, 2025 AR1000F and AR1000NR instructions (read 2026-10-24)”.
Source removed: “DFA, 2024 AR1000F and AR1000NR instructions”.
Source removed: “U.S. Army benefits library, Arkansas”.
And 1 more change.

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Disclaimer

VetTOC is not affiliated with the U.S. Department of Veterans Affairs or the Department of Defense. Information is for reference only and is not an eligibility determination. Verify with VA, the relevant state or territory, or an accredited VSO.