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States exempting a portion of pension income include: Arkansas, Colorado, Delaware, Georgia, Hawaii, Iowa, Kentucky, Louisiana, Maine, Maryland, Michigan, Missouri, Montana, New Jersey, New Mexico, New York, Oklahoma, South Carolina, Utah, Virginia and Wisconsin.
Arkansas Personal Income Taxes. The state of Arkansas charges an Individual Income Tax that applies to most forms of retirement income. The only retirement-income sources that are not are subject to income tax in Arkansas are Social Security and railroad retirement benefits.There is a $6,000 deduction on employer sponsored pension plans in Arkansas.This means that the first $6,000 in pension income that a resident receives is not considered taxable income by the state. Persons can receive this deduction by listing the $6,000 on line 17A or 17B of their state tax return.here is a $6,000 deduction on employer sponsored pension plans in Arkansas. This means that the first $6,000 in pension income that a resident receives is not considered taxable income by the state. Persons can receive this deduction by listing the $6,000 on line 17A or 17B of their state tax return.