Select your state

Employment law

retirement plans—401k plans

A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts. Some of the key features of 401k plans are:

• Elective salary deferrals are excluded from the employee’s taxable income (except for designated Roth deferrals).

• Employers can contribute to employees’ accounts.

• Distributions—including earnings—are includible in taxable income at retirement (except for qualified distributions of designated Roth accounts).

In Arkansas, as in all states, a 401(k) plan is governed by federal law, specifically the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code. Employees in Arkansas can elect to defer a portion of their salary into their 401(k) plan, which is then excluded from their taxable income for the year, except for contributions to a Roth 401(k), which are taxed upfront but may be withdrawn tax-free in retirement. Employers have the option to make contributions to their employees' 401(k) accounts, which can be matched up to a certain percentage. Upon retirement, distributions from a traditional 401(k) are taxed as ordinary income, while qualified distributions from a Roth 401(k) are generally tax-free. It's important to note that while the federal government sets the primary regulations for 401(k) plans, Arkansas state tax laws align with federal tax treatment for these retirement savings accounts.

Legal Articles

State Statutes

Individual & Family Legal Plan

As a LegalFix member, you'll get expert legal services from a local law firm that treats you like an important client. Don't wait—be prepared for life's inevitable legal challenges starting today. And ask your employer, credit union, or membership group about preferred pricing opportunities.

Employment law

retirement plans—401k plans

Individual & Family Legal Plan

Articles

Arkansas State Code

Arkansas State Code

Employment law

retirement plans—401k plans

Articles