Arkansas State Income Tax

Arkansas taxes ordinary income, which is the money you earn from your job or small business. Ordinary income does not include long-term capital gains or qualified dividends, which are taxed at lower rates. It also excludes most retirement income. Ordinary income is taxed at a higher rate than other types of income. Individuals who have income as noted on W-2 forms or 1099s must file an Arkansas income tax return. Nonresident aliens who receive income as indicated on a W-2 or 1099 in the state of Arkansas must also file an individual return. Scholarships and tuition waivers are not considered income for Arkansas income tax purposes.

During the 2023 special session, lawmakers approved several tax reductions that will save Arkansas families and businesses $250 million a year. These reductions will take effect this year and will be reflected in paychecks when employers update their withholding tables.

How to File Arkansas State Income Tax?

A tax return is a form or series of forms that residents fill out showing how much income they earned and what taxes they paid. It also helps determine if they paid too little or too much, and it can help them get money back.

Arkansas residents may take the standard deduction or itemize their deductions, depending on which method gives them a larger reduction in their tax bill. Like most states, it does not tax Social Security benefits or military income. However, it does tax some other types of income, including interest on personal loans and property losses from fires and hurricanes.

Arkansas’s modernized e-File system accepts returns for Individual, Partnership, Corporate, S-Corporate, and Fiduciary income tax. It also supports amended returns. Taxpayers can use the main menu to select the appropriate type of return.

How to Pay Arkansas Income Tax?

You can pay your individual income taxes in Arkansas by using the state’s online payment service. This option is available for anyone who has filed their tax return or an extension. You can also use it to make payments on previous tax debts. The system is operated by ACI Payments, Inc., which charges a convenience fee for each transaction.

This tax is based on your ordinary income, which includes wages from your job, profits from your small business, rental income, and interest and dividends. Unlike investment income, your ordinary income is not subject to special tax treatment.

If you have trouble paying your Arkansas income taxes, you can file for a tax payment plan with the Department of Finance and Administration (DFA). The DFA judges each request on a case-by-case basis. It may ask you to submit documents proving your ability to pay, including copies of past tax returns, a list of your assets, and your monthly expenses. You can also contact a financial advisor to help you understand how your Arkansas taxes fit into your overall financial goals.

Arkansas Income Tax Due Dates

With tax season approaching, it is important to remember that state and federal income taxes are due by April 15. To avoid penalties and fees, you should file your return before the deadline. If you are unable to file your return by the deadline, you can request an extension by submitting form AR1055.