Military Retirement in Arkansas

Complete 2026 Tax Guide for Veterans

100% Tax-Free Military Retirement

Full exemption since 2018 - The Natural State for Veterans!

Tax Overview Military Bases Cost of Living Best Cities VA Healthcare Pros & Cons FAQ

Quick Facts: Arkansas for Military Retirees

Military Retirement Tax: 100% EXEMPT
VA Disability Tax: Tax-Free
State Income Tax: 0% - 4.4% (graduated)
Cost of Living: 14% Below Average
Property Tax: 0.62% (one of lowest in US)
Major Base: Little Rock Air Force Base

Arkansas Military Retirement Tax Overview

Arkansas became a top destination for military retirees in 2018 when it passed Act 141 of 2017, fully exempting military retirement pay from state income tax. Combined with one of the lowest costs of living in America, Arkansas offers exceptional value for veterans.

Income Type Tax Treatment Notes
Military Retirement Pay 100% Exempt Since 2018, no income limit
VA Disability Compensation Tax-Free Protected by federal law
Survivor Benefit Plan (SBP) Tax-Free Included in military exemption
Social Security Tax-Free Arkansas exempts Social Security
Civilian Employment 0% - 4.4% Graduated rates, top rate decreasing

Military Installations in Arkansas

Arkansas has a strong military presence with an active Air Force Base, training centers, and Army installations.

Little Rock Air Force Base

Jacksonville (near Little Rock)

  • • Largest C-130 training base in the world
  • • 19th Airlift Wing
  • • 314th Airlift Wing (training)
  • • 7,000+ military & civilian employees
  • • Full base services (commissary, BX, medical)
  • • $1.3 billion annual economic impact

Fort Chaffee Maneuver Training Center

Fort Smith area

  • • Joint Maneuver Training Center
  • • 64,000+ acres training area
  • • Arkansas National Guard training
  • • Multi-state training operations
  • • Redeveloping areas for civilian use

Pine Bluff Arsenal

Pine Bluff

  • • Chemical/biological defense equipment
  • • Smoke and obscurant production
  • • 15,000+ acre facility
  • • Civilian employment opportunities

188th Wing (ANG)

Fort Smith

  • • Arkansas Air National Guard
  • • Intelligence, Surveillance, Reconnaissance
  • • MQ-9 Reaper operations
  • • Guard/Reserve opportunities

Cost of Living in Arkansas

Arkansas consistently ranks as one of the most affordable states in the nation. Combined with 100% military retirement tax exemption and extremely low property taxes, your retirement income goes exceptionally far here.

Category Arkansas National Average
Overall Cost of Living 86 (14% below) 100
Median Home Price $185,000 $420,000
Property Tax Rate 0.62% 1.07%
Groceries 8% Below Average 100

Best Arkansas Cities for Military Retirees

Little Rock / Jacksonville

Near Little Rock AFB

  • • Direct access to base services
  • • State capital with best job market
  • • Central Arkansas VA Healthcare System
  • • UAMS medical center
  • • Affordable suburbs (Cabot, Sherwood)

Fort Smith

188th Wing, Fort Chaffee

  • • Strong military community
  • • Very low cost of living
  • • Beautiful River Valley scenery
  • • VA outpatient clinic
  • • Growing downtown area

Northwest Arkansas

Fayetteville, Bentonville, Rogers

  • • Fastest growing region in Arkansas
  • • Walmart, Tyson, J.B. Hunt headquarters
  • • Excellent schools, vibrant economy
  • • Ozark Mountains recreation
  • • Higher cost than rest of state

Hot Springs

Resort/retirement destination

  • • National Park in the city
  • • Lake recreation (Ouachita, Hamilton)
  • • Affordable lakefront properties
  • • Mild climate for Arkansas
  • • Strong retiree community

VA Healthcare in Arkansas

VA Medical Centers

  • Central Arkansas VA Healthcare System - Little Rock (teaching hospital)
  • Veterans Health Care System of the Ozarks - Fayetteville

Community-Based Outpatient Clinics

  • • Fort Smith
  • • Harrison
  • • Hot Springs
  • • Jonesboro
  • • Mena
  • • Mountain Home
  • • Pine Bluff
  • • Searcy
  • • El Dorado

Pros & Cons of Retiring in Arkansas

✅ Pros

  • ✓ 100% military retirement tax exemption
  • ✓ Social Security also tax-free
  • ✓ Cost of living 14% below national average
  • ✓ Property taxes among lowest in US (0.62%)
  • ✓ Active Air Force base with full services
  • ✓ Beautiful natural scenery (Ozarks, lakes)
  • ✓ Mild winters compared to northern states
  • ✓ Good VA healthcare coverage

❌ Cons

  • ✗ Hot, humid summers
  • ✗ Tornado risk in spring
  • ✗ Limited major metro areas
  • ✗ Lower average wages for civilian jobs
  • ✗ Rural areas have limited healthcare
  • ✗ Fewer defense contractor opportunities

Frequently Asked Questions

Does Arkansas tax military retirement pay?

No. Arkansas exempts 100% of military retirement pay from state income tax since 2018. This includes all service branches, Reserve/Guard retirement, and Survivor Benefit Plan payments.

Why is Arkansas so affordable?

Arkansas has low property taxes (0.62%), affordable housing (median $185K), and overall cost of living 14% below average. Combined with no military retirement tax, your money stretches significantly further.

What property tax benefits do Arkansas veterans receive?

Arkansas offers property tax exemptions for disabled veterans. 100% disabled veterans can receive significant property tax reductions. All homeowners benefit from the state's already-low 0.62% average rate.

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