Arkansas tax deductions and write-offs (2026)

No. Arkansas fully exempts military retired pay from state income tax (since tax year 2017). Other retirement income: Each taxpayer may exclude up to $6,000 of retirement income from employer pensions/plans and IRA distributions taken after age 59½ (one combined $6,000 limit per person).

Partly. Each taxpayer may exclude up to $6,000 of retirement income from employer pensions/plans and IRA distributions taken after age 59½ (one combined $6,000 limit per person).

No. Arkansas does not tax Social Security benefits; they are listed as nontaxable income for state purposes. This is a long-standing rule (Ark. Code 26-51-404).

No: Arkansas doesn't offer a state earned income credit. No state earned income tax credit as of tax year 2026. Arkansas does offer a child care credit: 20% of the federal child and dependent care credit. The 20% credit for care at an approved early-childhood program facility is refundable; you cannot claim both versions for the same expenses.

Only instead of income tax: itemizers in Arkansas pick sales tax (6.5% state rate, about 9.48% with local taxes) or state income tax, whichever is bigger. The 0.125% state tax on groceries was eliminated Jan. 1, 2026; city and county sales taxes still apply to groceries.

Yes on your federal return if you itemize, within the $40,400 SALT cap. Arkansas adds its own break: Homestead Property Tax Credit for any owner-occupied primary home; register with your county assessor.

No: Arkansas doesn't offer a renter's credit or rent rebate. Arkansas has no state tax credit or rebate specifically for renters. Arkansas's homestead property tax credit (up to $500, rising to $600 beginning with 2026 tax bills) is available only to homeowners on their principal residence. Renters who itemize federally can deduct sales tax (6.5% state rate, about 9.48% with local) or Arkansas income tax, whichever is bigger.

Arkansas has a top rate of 3.9% and excludes the first $6,000 of retirement income.

Partly: Arkansas's county personal property tax is based on your vehicle's value, so it's deductible as personal property tax if you itemize. Vehicles must be assessed with the county assessor by May 31 and property tax paid before the tag can be renewed.

Yes on your Arkansas return: $5,000 single / $10,000 joint per taxpayer (AR plan); $3,000 / $6,000 for out-of-state plans. Contributions to any state's 529 plan count. Rollovers from another state's plan into an Arkansas plan are deductible up to $7,500 ($15,000 joint) in the rollover year.

No state child tax credit, but Arkansas has a child care credit: 20% of the federal child and dependent care credit. The 20% credit for care at an approved early-childhood program facility is refundable; you cannot claim both versions for the same expenses. Personal tax credit for dependents of $29 each (2025, inflation-indexed), plus $500 per dependent with a developmental disability.

Yes, as a business expense: Arkansas charges $45 online / $50 paper to form an LLC; ongoing: $150 annual LLC Franchise Tax Report. $150 annual franchise tax (this is the annual report fee). Due May 1; online filing adds a $5 processing fee.