Beginning January 1 2014, the state of Arkansas allows for a 100% exemption from income tax for service pay or allowance received by an active duty member of the armed forces. Active duty includes all members of the armed forces, including the National Guard and Reserve Units.
To claim the exemption, you must file a return and report all of the income you received during the year.
If you use an exclusion for military compensation, you do not qualify for the Low Income Tax Table when figuring your tax due. You may elect not to use the exclusion to which you are entitled and use a Low Income Tax Table if you fall within the income limits. If you wish to elect not to use the exclusion, enter 0 for wages received from U.S. military compensation.