How Much Is Income Tax in Arkansas?

Arkansas residents and individuals earning income within the state navigate a specific income tax system. Understanding these state-level taxes is important for managing personal finances and ensuring compliance. This guide clarifies how income tax is assessed and paid in Arkansas.

Understanding Taxable Income in Arkansas

Arkansas defines taxable income as the portion of your earnings subject to state income tax, which generally begins with your federal adjusted gross income (AGI). However, state law includes specific additions and subtractions to this federal amount, creating a distinct Arkansas taxable income calculation. Wages, salaries, business profits, interest, dividends, and capital gains are typically considered taxable income.

Certain income types may be exempt or treated differently under Arkansas law. For example, some government pensions, military pay, and Social Security benefits may have special tax considerations. Full-year residents are generally taxed on all income, regardless of its source, while part-year residents and non-residents are taxed only on income earned from Arkansas sources. The requirement to file an Arkansas tax return depends on your gross income, filing status, and residency.

Arkansas Income Tax Rates and Brackets

Arkansas utilizes a progressive income tax system, meaning higher income levels are subject to higher marginal tax rates. For the 2024 tax year, the individual income tax rates range from 0% to 3.9%. This graduated structure ensures that different portions of an individual’s income are taxed at varying rates.

The state’s tax brackets for 2024 begin with a 0% rate for taxable income up to $5,499. Income from $5,500 to $10,899 is taxed at 2%, while income between $10,900 and $15,599 is taxed at 3%. The rate increases to 3.4% for income from $15,600 to $25,699, and the top rate of 3.9% applies to taxable income of $25,700 and higher. Each bracket also includes a “minus adjustment” amount that simplifies the overall tax calculation. For example, a single filer with $30,000 in taxable income would be taxed at 0% on the first $5,499, 2% on the next portion, and so on, with the highest rate of 3.9% applied to income above $25,700, adjusted by the specific bracket’s reduction.

Reducing Your Arkansas Tax Liability

Arkansas taxpayers have options to reduce their state income tax liability through deductions and credits. Deductions lower taxable income, while credits directly reduce the amount of tax owed. Eligibility for these benefits depends on individual circumstances and specific state guidelines.

Taxpayers can choose between a standard deduction or itemizing their deductions. For the 2024 tax year, the standard deduction is $2,410 for most filing statuses, including single and head of household, and $4,820 for married filing jointly. Taxpayers may itemize deductions if their eligible expenses exceed the standard deduction amount, and Arkansas allows itemized deductions even if the standard deduction was claimed on the federal return. Common itemized deductions include medical and dental expenses exceeding 10% of adjusted gross income, state and local taxes paid without the federal $10,000 limitation, and home mortgage interest. Charitable contributions and certain miscellaneous itemized deductions are also permissible.

Tax credits offer a dollar-for-dollar reduction of tax owed. Arkansas provides various credits to eligible taxpayers. These include a personal tax credit of $29 per qualifying event, such as for the primary filer, spouse, or dependents. Additional credits may be available for specific situations, such as a child care credit, which is 20% of the federal Child Care Tax Credit.

A credit for taxes paid to another state can prevent double taxation on income earned outside Arkansas. Other credits exist for qualified adoption expenses, political contributions, and for individuals with developmental disabilities.

Paying Your Arkansas Income Tax

Paying Arkansas income tax occurs through various methods throughout the year. For most employees, state income tax is automatically withheld from each paycheck by their employer. Employees can adjust their withholding by submitting Form AR4EC, the Arkansas Employee’s Withholding Exemption Certificate, to their employer. This form helps ensure the correct amount of tax is withheld based on exemptions claimed.

Individuals with income not subject to adequate withholding, such as self-employment income, rental income, or investment income, are generally required to pay estimated taxes quarterly. These payments help taxpayers avoid penalties for underpayment. The typical due dates for estimated tax payments are April 15, June 15, September 15, and January 15 of the following year.

All eligible taxpayers must file an annual Arkansas income tax return. The general deadline for filing is April 15 of the year following the tax year. If April 15 falls on a weekend or holiday, the deadline shifts to the next business day. While extensions to file are available, they generally do not extend the deadline to pay any tax owed, and penalties and interest may accrue on unpaid amounts.

Arkansas often honors federal extensions, but separate state extensions can also be filed if needed. For the 2024 tax year, due to natural disasters, some filing deadlines were extended to December 3, 2025, though estimated tax payment due dates remained unchanged.