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INSTRUCTIONS

LINE 1.

This line is used to report your allowable contribution to an Individual Retirement Account (IRA). If you contributed to your own IRA, certain limi-

tations may apply to the amount you may use as an adjustment to income. If neither you nor your spouse is covered by an employer provided

retirement plan, the entire contribution is deductible up to $5,000 each for all filing statuses. If either you or your spouse is covered by such a plan,

the amount of the deduction depends on the amount of your Adjusted Gross Income (AGI) before the IRA deduction, as shown in the table on page

21 of the booklet. Use this table along with your Arkansas AGI to determine your allowable deduction. Catch up Contributions - Individuals

who turn 50 before the close of the tax year may increase the maximum permitted annual contribution by up to $1,000.

LINE 2.

This line is used to report your allowable contribution to an Archer Medical Savings account (MSA). An MSA is a trust or custodial account that is

created or organized exclusively for the purpose of paying the qualified medical expenses of the taxpayer (account holder) as well as the taxpayer’s

spouse and/or dependents. In order to be eligible, a taxpayer must have insurance coverage under a high deductible health plan (HDHP) only.

A HDHP will have the following deductions and limitations: (1) for self-only coverage, the minimum deductible is $1,950, maximum deductible is

$2,900 and the maximum out of pocket expense is $3,850, and (2) for family coverage, the minimum deductible is $3,850, maximum deductible

is $5,800 and the maximum out of pocket expense is $7,050. The contribution limitation for any month is the amount equal to 1/12 of 65% of the

annual deductible for an individual with self-only coverage and 1/12 of 75% of the annual deductible for family coverage. New Archer MSAs

may not be established after 2005 but contributions can be made to existing accounts.

LINE 3.

This line is used to report your allowable contribution to a Health Savings Account (HSA). In order to be eligible, a taxpayer must have insurance

coverage under a HDHP only. A HDHP will have the following deductions and limitations: (1) for self-only coverage, the minimum deductible

is $1,100 and the maximum out of pocket expense is $5,600, and (2) for family coverage, the minimum deductible is $2,200 and the maximum

out of pocket expense is $11,200. You can make pre-tax contributions of up to $2,900 each year ($5,800 for families) to cover health care costs.

Individuals who reach age 55 by the end of the tax year can increase their annual contribution by $900 for 2008. Maximum contributions allowed

to an HSA are reduced by any contributions made to an Archer MSA.

LINE 4.

You may take an adjustment for interest paid on student loans if all of the following apply:

You paid interest in 2008 on a qualified student loan.

Your filing status is any status other than married filing separately on different returns (Status 5).

Your AGI is less than: $70,000 if filing Status 1, 3, or 6; $145,000 if filing Status 2 or 4. Status 4 filers, please note that this is a

combined income amount.

You are not claimed as a dependent on another taxpayer’s 2008 tax return.

Figure your allowable deduction using the worksheet on page 21 of the booklet.

LINE 5.

You may take an adjustment from income for contributions made to a long-term intergenerational trust. This is a trust established for an individual

under the age of 18 in order to provide funds for the minor’s retirement. The trustee must be a resident of Arkansas and cannot distribute any of

the trust funds to the beneficiary until the beneficiary reaches the age of 55. Contributions are limited to $4,000 per year.

LINE 6.

Employees and self-employed persons (including partners) can deduct certain moving expenses. Expenses incurred in 2008 are deducted on

this line as an adjustment to income.

You can only take this deduction if you moved in connection with your job or business and your change in job location has added at least fifty (50)

miles to the distance from your old home to your workplace. If you had no former workplace, your new workplace must be at least fifty (50) miles

from your old home. You must attach a completed copy of Federal Form 3903.

If you were reimbursed for any part of your moving expenses and the amount was included on your W-2, report this amount as income on Form AR1000/

AR1000NR, Line 8. If the amount was not included on your W-2, include the amount on Form AR1000/AR1000NR, Line 21, Other Income.

LINE 7.

If you are self-employed and had a net profit for the year, you may be able to deduct part of the amount paid for health insurance on behalf of

yourself, your spouse, and/or dependents. Complete the worksheet on page 22 of the booklet to determine your deduction.

LINE 8.

If you are self-employed and contributed to a “Keogh”, H.R. 10 retirement plan, or a SIMPLE plan, enter the total amount of your contributions in

the space provided. The amount of the deduction depends upon the type of plan.

LINE 9.

Enter the total interest penalties paid for premature or early withdrawal of certificates of deposit.

LINE 10. If you paid alimony or separate maintenance as the result of a court order, enter the total amount in the space provided. You must enter the

name and Social Security Number of the person you paid.

LINE 11. If you have a permanently disabled individual who qualifies for the deduction you can take an adjustment from income of $500 for each permanently

disabled individual. Attach Form AR1000DC.

LINE 12. If you paid unreimbursed expenses for yourself or one of your dependents related to the donation of an organ (part of a liver, pancreas, kidney,

intestine, lung or bone marrow) you may take an income tax deduction of up to $10,000. The deduction must be claimed for the taxable year in

which the transplantation of the organ occurs. Allowable expenses include travel, lodging, medical expenses and lost wages that are related to

the organ donation. An individual may claim the deduction only once in his or her lifetime. This deduction does not apply to organs harvested

from a deceased donor. Attach Form AR1000-OD.

LINE 13. Total Other Adjustments. Add Lines 1 through 12 and enter on this line and on Forms AR1 or NR1, Line 25.

AR1000ADJ (R 8/1/08)

Form Ar1000adj Draft - Arkansas Individual Income Tax Schedule Of Other Adjustments - 2008 Page 2

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