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11536: AR - Pension Exclusion on Line 17 not Calculated on AR1000F, AR1000NR


Arkansas

Why is the pension exclusion on Lines 17A and 17B not calculated on Arkansas Individual Form AR1000F/AR1000NR?

There are a few situations that disallow the pension exclusion from being taken on the AR1000F (full resident) and AR1000NR (non-resident) returns.

Low Income Table

The $6,000 retirement income exclusion is not calculated if the taxpayer is using the Low Income Table to compute the tax (see AR1000F/NR, line 25). To produce the exclusion, the taxpayer can elect out of the Low Income Table by selecting the Force Regular Tax Table option on AR screen 1. Note that electing the Regular Table may increase the tax.

Early Distribution

The exclusion may not be calculated due to the fact that the 1099-R, Box 7 distribution code and the age of the taxpayer or spouse (less than age 59 ½) presumes that the distribution does not qualify for the $6,000 exclusion. Premature distributions made on account of the participants’ death or disability (1099-R, Box 7 Codes 3 and 4) qualify for the exemption. All other premature distributions or early withdrawal do not qualify for the $6,000 exemption.

Surviving Spouse

A taxpayer who is filing as a Surviving Spouse may claim his or her $6,000 retirement income exclusion but may not claim the $6,000 on behalf of the decedent. The Surviving Spouse is limited to a single $6,000 exemption.

For more information, see the Individual Income Tax Forms and Instructions Booklet.


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