Arkansas Military Retirement Income Tax Cut Eliminates Retirement Pay Tax

Arkansas veterans receiving military retirement will benefit from the Arkansas Military Retirement Income Tax Cut which went into effect January 1, 2018. This tax cut, which eliminates state income tax on military retirement pay, was one of Governor Hutchinson’s priorities for the 2017 legislative session and was signed into law in February, 2017. The bill passed through the General Assembly with wide bi-partisan support in both chambers.

The tax cut, which eliminates state income tax on military retirement pay, was one of Governor Hutchinson’s priorities for the 2017 legislative session. The bill passed through the General Assembly with wide bi-partisan support in both chambers.

Arkansas now has joined the majority of southern states in exempting state income tax on military retirement pay. Governor Hutchinson prioritized this initiative in an effort to recruit more military retirees to the state.

“The average new military retiree is 38-44 years old with another 20-plus years in the workforce,” Governor Hutchinson said. “The skills and experience our military retirees offer are invaluable resources for our state. This tax cut creates tax relief for Arkansas’ 22,000 military retirees, and will encourage veterans to start their second careers in Arkansas.” Click here for full article, Arkansas Matters, Dec 29, 2017

When does the Arkansas Military Retirement Income Tax Cut become effective?

The law, signed nearly a full year ago, became effective on January 1, 2018. Veterans receiving retirement could see the first adjustment on their February checks only if they have contacted the Defense Finance and Accounting Service (DFAS) which operates the Defense Retiree and Annuitant Pay System (DRAS).

Make this adjustment in January, 2018, so you’ll receive your benefits from the Military Retirement Income Tax Cut

Call DFAS at (800) 321-1080 Monday through Friday, from 8 a.m. to 5 p.m. Eastern Time or go to mypay. Surviving spouses and/or minor children who are receiving Survivor Benefit Pay also need to contact DFAS to adjust their state income tax withholding.

This change in a veteran’s income and especially for a surviving spouse or dependent, could also change the way they choose to file their state and federal income taxes. Let us know, we can help.

Let’s do this together!

Although the Veterans Administration and the DFAS and various other organizations have been promoting this, and reminding our Veterans of this benefit, take a few moments and check with a Veteran you love and respect. Maybe there are eligible spouses and children who haven’t yet taken care of business. Do your part. They did theirs.

What’s the bottom line?

We establish and maintain a personal and business relationship with our clients. Your LIFE is your business and your BUSINESS is your life, and we’re here for YOU. Let’s all help one another. Next time you visit a retired veteran, bring up the subject of the Arkansas Military Retirement Income Tax Cut and talk about it. You might be making somebody’s day.

We’re here for you. Call 479.478.6831. Use my Calendly Page (it’s easy) if you want to set an appointment, or contact me by email melanie@radcliffcpa.com