As you proceed through the Arkansas interview, you will encounter a series of screens labelled "[your name]'s Pension, Annuity, or IRA", one screen for each 1099-R on the federal return.
Under the heading, the first line is "Select a distribution type for Military pension Learn More." where the phrase "Military pension" is actually the name on the 1099-R that you entered (i.e., TT doesn't know that this is a military pension, only that I named it that).
You will have 5 options:
- Employer sponsored pension plan
- IRA with a qualified distribution
- Military pension (Tax exempt)
- Military pension ($6000 exclusion) Learn More
- Other
Click on "Learn More" next to "Military pension ($6000 exclusion)". This will explain how you want to handle a military pension.
Also, Arkansas will allow tax payers to choose between the military pension exclusion or the non military pension exclusion:
1) Select "Military pension (Tax exempt)" to exclude whole amount of Military pension (Line 17 of 1000F/1000NR)
2) Select "Military pension ($6000 exclusion)" to include Military pension in employment-related pension plan or a qualified traditional IRA distribution (Line 18 of 1000F/1000NR) for a $6,000 exemption from your respective taxable retirement plan income.
As you can see, if you want the military pension to be used by itself, click on the third button; if you want the military pension (presumably less than $6,000) to be part of the $6,000 general pension exclusion, click on the fourth button.
Of course, you will also have to enter the same screen for the 1099-R for your non-military pension, indicating that it is an employer sponsored pension plan (or whatever it is).
