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boing1929
New Member

Arkansas retirement credit not subtracted

Line 18A of Arkansas Form AR1000F (Primary employer pension plan(s)/Qualified IRA(s)).  Lines for "Gross" and "Taxable," which are both the same for me.  Next line is bolded and says, "Less $6,000,"  but the amount entered is exactly the same as the other two line items. 

 

Here is the excerpt from the instructions to the form:  "You are entitled to a $6,000 exemption from the taxable amount; the balance is taxable to Arkansas. Enter the balance on Line 18A, Column A."

 

There doesn't appear to be any ambiguity here.   This clearly appears to be an error.  How do I fix it?

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1 Reply
JohnW152
Expert Alumni

Arkansas retirement credit not subtracted

It's possible that the income you've reported isn't eligible for the $6,000 exemption amount.

 

According to PRIMARY EMPLOYER PENSION PLAN(S)/QUALIFIED IRA(s) in the AR1000F and AR1000NR Instructions:

 

You are eligible for the $6,000 exemption for retirement or disability benefits provided the distribution was from public or private employment-related retirement systems, plans, or programs.  (The recipient does not have to be retired.)  The method of funding is irrelevant.  The exemption may be taken from either lump-sum or installment payments. The early withdrawal penalty may be applicable even though the exemption is granted. 

 

If you received a traditional IRA distribution after reaching the age of fifty-nine and one-half (59 1/2), the first $6,000 is exempt from tax. Premature distributions made on account of the participant’s death or disability also qualify for the exemption. All other premature distributions or early withdrawals including, but not limited to, those taken for medical expenses, higher education expenses, or a first-time home purchase do not qualify for the exemption. 

 

Retirees cannot claim both the military retirement exemption and the $6,000 exemption for traditional IRA or employer sponsored retirement distributions (A.C.A 26-51-307(f)).

 

If none of these scenarios explain what you're seeing, please respond back.

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