§ 26-51-414 - Deferred compensation plans. - Arkansas Statutes

26-51-414. Deferred compensation plans.

(a) (1) Sections 72, 219, 401-404, 406-416, and 457 of the Internal Revenue Code of 1986, as in effect on January 1, 2009, relating to annuities, retirement savings, and employee benefit plans, respectively, are adopted for the purpose of computing Arkansas income tax liability, except Arkansas capital gains treatment and the Arkansas tax rates shall apply.

(2) The requirements for filing a joint return under 219(c)(1)(A) of the Internal Revenue Code of 1986 shall not apply.

(b) Section 408A of the Internal Revenue Code of 1986, as in effect on January 1, 1999, relating to Roth individual retirement accounts, is adopted for the purpose of computing Arkansas income tax liability with the following exceptions:

(1) (A) Sections 408A(d)(3)(A)(iii) and 408A(d)(3)(E) are not adopted.

(B) All income from and tax attributable to distributions from a non-Roth individual retirement account to a Roth individual retirement account prior to January 1, 1999, shall be reported for tax year 1998, and the tax may be paid over a four-year period as permitted by the Director of the Department of Finance and Administration; and

(2) Adjusted gross income under 408A(c)(3) shall be determined in the same manner as under 26-51-403(b).

(c) Any additional tax or penalty imposed by this section shall be ten percent (10%) of the amount of any additional tax or penalty provided in the federal income tax law adopted by this section.

(d) Section 1042 of the Internal Revenue Code of 1986, as in effect on January 1, 2003, regarding the deferral of gain realized on the sale of a corporation's shares of stock to the corporation's employee stock ownership plan (ESOP), is adopted for the purpose of computing Arkansas income tax liability.