Hey Arkansas preparers....arkansas retirment taxable to out of state residents?

[dd4vols]

got a new client..lived in Tennessee for the last 3 years....but her previous preparer had her paying Arkansas income tax on her Arkansas Public Employees pension... did a little research, and  it sounds like an  Arkansas NonResident or Part Year resident still must pay on any income if received from Arkansas sources.  Is this true?  you can move far far away, but if your income came from Arky, they want some? 

[Marc-TaxMan · Accepted solution]

They cannot tax non-resident on retirement income earned earlier while resident.  Do some amendments: be a hero!

[dd4vols]

"Nonresidents who received any taxable income from Arkansas sources must file a return (regardless of marital status, filing status, or amount)."  Just found this on the instruction booklet.  And the retirement is taxable in Arky, to Arky residents, except $6k exemption.

[Marc-TaxMan]

@dd4vols On Jan. 10, 1996, Congress enacted the Pension Source Tax Act of 1996 (P.L. 104-94). This law specifically stipulates that, "No State may impose an income tax on any retirement income of an individual who is not a resident or domiciliary of such State." While the Source Tax law still allows individual states to define residency on their own terms, it prohibits any state from taxing non-residents for pensions earned within the state.

[dd4vols]

Thanks, Marc!