I'm told that Arkansas does not allow the taxing of the CARES Act retirement distribution to be averaged over three years like the federal government does. Is there something official and in writing showing that Arkansas DOES NOT ALLOW the three year spread of tax liability? Neither HB1361 nor Act 248 are any help.
However, HB1361 states in Section 4 "Arkansas should conform its income tax laws to the federal tax treatment of these loans, payments, and expenses to enable Arkansas taxpayers to receive the full benefit of the tax laws...[etc]" which sounds like they WOULD allow the three year split.
I intend to repay these funds into my retirement plan this year to replenish my retirement savings. When I withdraw them again when I retire, will Arkansas tax this money again? The agent at the DFA told me that YES, Arkansas will tax those funds a second time. I have a hard time believing that. Please confirm. [Perhaps there was a miscommunication. It would depend on whether there's a tax credit/refund given for repayment. Nevertheless, this shouldn't be double taxed.]
