Military Pay
Resident - As of January 1, 2014, active duty military pay is exempt from income tax in Arkansas, including National Guard and Reserve Units. This income must be manually subtracted from the Arkansas Return.
To enter AR exempt military income in TaxSlayer Pro, from the Arkansas Main Menu select:
- Income Menu
- Military Pay - Enter the military pay as a positive number.
Nonresident - If the taxpayer is a nonresident of Arkansas stationed in Arkansas whose only source of income is active duty military pay, they are not required to file an Arkansas return.
One spouse is a resident of Arkansas and the other is not - They can file separate state returns, one as a resident and the other as a nonresident. To accomplish this, you'll need to prepare two tax returns:
- Federal MFJ return with the primary taxpayer being the Arkansas resident, and an Arkansas resident return filed MFS on different returns for the taxpayer. (This option is not yet available in TaxSlayer Pro when federal filing status is MFJ.)
- Federal MFS return for the spouse, and an Arkansas nonresident return for the spouse. (The federal return won't be filed, only the Arkansas return.)
To change the Arkansas filing status to MFS in TaxSlayer Pro, from the Arkansas Main Menu select:
- Personal Information
-
Filing Status
- Select Married Filing Separately on same return if federal filing status is MFJ.
- Arkansas defaults to Married Filing Separately on different returns if federal filing status is MFS.
Spouse Income - Military Spouses Residency Relief Act (MSRRA)
The MSRRA allows military spouses who reside with their service member spouse stationed in a nonresident state on military orders to keep their resident state for tax purposes. This means if the spouse has income from the nonresident state, they are not required to pay taxes to the nonresident state but report this income on their resident state return.
In order to be eligible for the income exemption under the MSRRA in Arkansas, the following conditions must be met by the military spouse/employee:
- The active duty military member is present in Arkansas in compliance with military orders.
- The spouse is in Arkansas solely to be with the active duty military member.
- The spouse maintains residence in another state, which is the same state of residence as the military member.
If the military spouse meets the eligibility requirements, they should provide their employer with a current valid military identification and a current Leave and Earnings Statement along with Arkansas Form ARW-4MS - Annual Withholding Tax Exemption Certificate For Military Spouse, if they are claiming exemption from Arkansas's income tax withholding requirements based on the conditions set forth under the Military Spouses Residency Relief Act (P.L. 111-97). If that is not done and Arkansas taxes are withheld, take the following steps to claim a refund of those taxes.
To claim a refund of taxes withheld from the Arkansas income in error, from the nonresident Arkansas Main Menu select:
- Personal Information
- Other Categories
- Military Spouse - Select YES and complete the AR-MS Entry Screen
Note: This is an article on reporting military pay and military spouse pay in the TaxSlayer Pro program. It is not intended as tax advice.
Additional Information:
Arkansas State Tax Information
Arkansas DFA: Form ARW-4MS - Annual Withholding Tax Exemptions Certificate for Military Spouse
While TaxSlayer Pro strives to make the information and links contained on this page as timely and accurate as possible, TaxSlayer Pro makes no promise or guarantee about the timeliness, accuracy or completeness of the contents of this page. The information contained on this page is for general information and is not intended to be tax advice. The user is also encouraged to review the underlying state resources and publications.