Military Retirement in Arkansas
Complete 2026 Tax Guide for Veterans
100% Tax-Free Military Retirement
Full exemption since 2018 - The Natural State for Veterans!
Quick Facts: Arkansas for Military Retirees
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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