The Short Answer
Active-duty pay of members in the active or reserve components is fully exempt from Arkansas income tax. Your base pay is set by the federal pay table — identical to every other state for your rank and years of service. What actually changes in Arkansas is your BAH (averaging $1,100/mo without dependents and $1,400/mo with dependents) and how Arkansas treats the taxable portion of your pay.
State tax status: ~ PARTIAL EXEMPT
2026 Worked Example — E-5, 6 Years, With Dependents in Arkansas
Here is how the math actually lands for a mid-career enlisted member stationed in Arkansas, built the way I read my own LES. Base pay and BAS are federal; the Arkansas BAH figure is the state average.
| Monthly line item | Amount | Taxable? |
|---|---|---|
| Base pay (E-5, over 6 yrs) | $3,874 | Yes (federal + state) |
| BAH with dependents (Arkansas avg) | $1,400 | No — tax-free |
| BAS (enlisted) | $476.95 | No — tax-free |
| Gross monthly entitlements | $5,750.95 | — |
| Taxable income (base pay only) | $3,874 | — |
| Est. Arkansas state income tax | varies — see notes | — |
Only the $3,874 of base pay is taxable — the $1,876.95 of BAH + BAS is completely tax-free. Run your exact rank, ZIP, and dependency status in the Military Pay Calculator for a precise estimate.
How Arkansas Taxes Each Type of Military Pay
Active-Duty Base Pay
Active-duty pay of members in the active or reserve components is fully exempt from Arkansas income tax.
Guard & Reserve Drill Pay
National Guard and Reserve pay is covered by the full military pay exemption.
Military Retirement Pay
Military retirement pay is fully exempt from Arkansas income tax.
VA Disability Compensation
VA disability compensation is exempt federally and not taxed by Arkansas.
SCRA & Residency in Arkansas
SCRA protects a nonresident servicemember stationed in Arkansas from Arkansas tax on their military pay.
This is the single most misunderstood rule in military pay. Your home of record / state of legal residence — not your duty station — generally determines who can tax your military pay. Changing it is a deliberate act, not something that happens automatically when you PCS.
Major Military Installations in Arkansas
- Little Rock Air Force Base
- Pine Bluff Arsenal
- Ebbing Air National Guard Base (Fort Smith)
- Camp Robinson
BAH is set by the Military Housing Area covering your duty ZIP. Verify your exact rate at the official DoD BAH lookup.
Official Sources
FAQ — Military Pay in Arkansas
Does Arkansas tax my military base pay?
Active-duty pay of members in the active or reserve components is fully exempt from Arkansas income tax.
Is my BAH taxed in Arkansas?
No. BAH is federally tax-free and is never counted as income for Arkansas state income tax, regardless of how Arkansas treats base pay.
Does Arkansas tax military retirement pay?
Military retirement pay is fully exempt from Arkansas income tax.
I'm stationed in Arkansas but my home of record is elsewhere — who taxes me?
SCRA protects a nonresident servicemember stationed in Arkansas from Arkansas tax on their military pay.