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Arkansas State Tax Calculator

You’re not alone if you’re trying to answer the question “how much is Arkansas state tax?” Each year, millions of Arkansans find themselves struggling to figure out their tax liability.

Before you become overwhelmed by the thought of doing your Arkansas taxes, try our income tax calculator which makes it easy to get an estimate for how much you’ll owe, or maybe even get back, this year.

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Whether it’s your first time or 10th year doing your Arkansas state income taxes, our tax experts can assist you to make the process straightforward and stress free. Or, continue reading our guide to taxes in Arkansas to make filing them yourself easier than ever!

Overview of Arkansas State Taxes

If you enjoy the many benefits of living or working in the Natural State, like the beautiful scenery of the Ozark Mountains, affordable cost of living, and the lovely seasonal weather, you’ll likely have to pay Arkansas state taxes in addition to your federal income return. There are many factors that impact the taxes you owe in the state of Arkansas (including property taxes, income taxes, and sales taxes), which we’ll review in our comprehensive guide to Arkansas state taxes.

Arkansas Taxes: Quick Facts
Income tax: 0.9% - 6.9%
Sales tax: 6.5%
Property tax: 0.52%

Before you let out an inevitable groan, it’s important to consider that these taxes are a vital source of revenue to maintain and improve the many perks of being an Arkansan. From upkeep of infrastructure and other community benefits to funding the programs that keep you safe, your tax dollars are an important part of preserving the quality of life for residents.

It is important to note that Arkansas has not conformed to all the provisions in the Tax Cuts and Jos Acts (TCJA). However, the state is taking its own steps to improve the tax burden placed on Arkansas taxpayers and is striving to improve their tax competitiveness.

Arkansas State Tax Brackets

Currently, Arkansas has a six-rate tax bracket system ranging from 0.9% to 6.9%. Your Arkansas income tax rate is dependent on your filing status and income.

  • If your taxable income is $0 - $4,499, your tax rate is 0.9%
  • If your taxable income is $4,500 - $8,899, your tax rate is 2.5%
  • If your taxable income is $8,900 - $13,399, your tax rate is 3.5%
  • If your taxable income is $13,400 - $22,199, your tax rate is 4.5%
  • If your taxable income is $22,200 - $37,199, your tax rate is 6%
  • If your taxable income is ≥ $37,200, your tax rate is 6.9%

Since the average salary for male and female employees in Arkansas is $54,131 and $39,890 respectively, most salaried taxpayers fall in the highest income tax bracket (6.9%). If you’re having trouble understanding Arkansas tax brackets, reach out to one of our team members who can clarify any confusion.

Important Changes to Arkansas Tax Brackets

If these tax rates seem high to you, you’re in luck. On February 19, 2019 Governor Asa Hutchinson signed the 5.9 Tax-Cut Plan into law. The 5.9 Tax-Cut plan has been designed to reduce the tax burden on Arkansans while minimizing the fiscal impact on the state.

Beginning January 1, 2020, the current tax bracket system will be replaced with a four-rate bracket of 2%, 4%, 5.9%, and 6.6%. These changes are being implemented to reduce the top marginal tax rate of the highest and middle income brackets. Further cuts will be made in 2021, reducing the top tax bracket from 6.6% to 5.9%.

These changes will make living in Arkansas more affordable for residents by shifting taxes closer to the rates of nearby states like Oklahoma and Alabama.

What’s Considered Taxable Income?

Personal income taxes apply to all the income you’ve received in the tax year, including:

  • Wages, salaries, and tips
  • Interest and dividends
  • Alimony
  • Business income
  • Capital gains and losses
  • Pensions and annuities
  • Farming and fishing income
  • Gambling income and expenses
  • Clergy earnings (offerings and fees for marriages, baptisms, funerals, religious services, and salary)

Despite the fact that most sources of income are taxable, there are also some types of income that fall into the category of “nontaxable income”. We’ll go over these exemptions in more detail later but keep in mind that these will be important in determining which Arkansas tax bracket you fall into. You’ll also be able to take advantage of standard or itemized deductions to reduce how much you have to pay.

Filling Status
Standard Deduction
Married filling jointly
All other Fillings Statuses (Single, Married filing separate, Head of Household, Qualifying Widow(er))
What If You’re Self-Employed?

Income taxes are calculated a little differently if you’re self-employed. First and foremost, you only need to file an income tax return if you made net earnings of $400 or more.

Like your federal taxes, you will be responsible for the “self-employment tax” which compensates for the Social Security and Medicare tax that employers usually pay. The self-employment tax rate is 15.3% of the first $128,400. Additional taxes are applicable if your income exceeds this amount.

Before you panic, you should know there are many deductions for self-employed taxpayers that will help lower your taxes.

Arkansas Personal Income Tax

While most Arkansans will have to pay income taxes, there are certain stipulations you should be aware of when trying to determine whether you need to file a personal income tax return this year or not.

Full-Time Arkansas Residents

There are two main criteria that determine whether you need to file, your filing status and your gross income. As of 2018, if you’re a full-year resident of Arkansas, you’ll need to file income taxes if:

  1. You file as single and your gross income was ≥ $12,260
  2. You file as head of household, had 0-1 dependents, and your gross income was ≥ $17,431
  3. You file as head of household, had 2+ dependents, and your gross income was ≥ $20,778
  4. You file as married filing a joint return, had 0-1 dependents, and your gross income was ≥ $20, 675
  5. You file as married filing a joint return, had 2+ dependents, and your gross income was ≥ $24,883
  6. You file as married filing separately, same or different returns, and your gross income was ≥ $5,099
  7. You file as qualifying widow(er), had 0-1 dependents, and your gross income was ≥ $17,431
  8. You file as qualifying widow(er), had 2+ dependents, and your gross income was ≥ $20,778

Full-year Arkansas residents will use Form AR1000F. It’s important to note that there are different criteria for non-residents and part-year residents.

Non-Residents & Part-Year Residents

Non-residents and part-year residents (someone who has moved into or out of Arkansas during the tax year) are required to pay income taxes on any income from Arkansas sources. Unlike full-year residents, there are no exceptions.

If you’re a non-resident or part-year resident, you’ll file your Arkansas income taxes on Form AR1000NR.

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Arkansas Capital Gains Tax

Arkansas follows the same policy as the federal government regarding capital gains taxes:

  • 100% of short-term capital gains (assets sold within a year or less) are considered taxable income.
  • 50% of long-term capital gains (those held for more than a year) are considered taxable income.

However, please note that in Arkansas, the amount of net capital gain in excess of $10,000,000 is exempt from state tax.

Not sure whether you need to pay capital gains tax? One of the professionals at Community Tax can examine your assets and help you make sure in compliance with your state tax requirements.

Arkansas State Sales Tax

The Arkansas state sales tax rate is 6.5%. While this is the standard state-wide rate, each local jurisdiction can also implement additional sales taxes, making sales taxes as high as 11.625% in some cities. In fact, the average sales tax paid by Arkansans is approximately 9.47%, making it the state with the second highest sales taxes, just behind Tennessee.

You can use the lookup tools on the DFA website to find out what your local taxes are.

Arkansas Sales Tax Exceptions

It’s important to note that certain necessities are an exception to the standard sales taxes. For instance, food and food ingredients are only taxed at a rate of 1.5%.

There are also some health items that are exempt from sales tax in Arkansas like prescription medicines, insulin and test strips, and medical equipment. Additionally, low income households (making less than $12,000) are exempt from the electricity usage sales tax.

Arkansas Excise Taxes

In addition to regular sales taxes, certain goods and services are subject to excise taxes. Excise taxes are usually applied to items that have an impact on health or environmental factors, or are non-necessities that can provide a source of extra revenue for the state. In the case of alcohol and tobacco products, excise taxes are often referred to as “sin taxes”. Let’s dive into the Arkansas tax rates for the most popular goods and services that face excise taxes:

Alcohol Excise Tax

Alcohol excise taxes depend on the type of beverage and alcohol content. Liquor with an alcohol content of more than 21% is taxed at $2.50 per gallon while liquor between 5 - 21% alcohol content is just $1.00 per gallon.

Wine is taxed at different rates depending on the alcoholic content. “Vinous liquor” that has more than 5% alcohol content is taxed at 75¢ per gallon, while “light wine” that has 0.5% to 5% alcohol content is taxed at a rate of 25¢ per gallon.

Beer and malt beverages are taxed depending on where they’re produced. Beer and malt beverages produced by a native brewery are taxed at about 24¢ per gallon. However, when distributed by a wholesaler, beer is only taxed at a rate of 23¢ per gallon and malt beverages at 20¢ per gallon.

Tobacco Excise Tax

In the state of Arkansas, cigarettes are saddled with an excise tax of $1.15 per pack. All other tobacco products are taxed at 68%. However, if you think that’s high, you could be thankful that you don’t live in states like Rhode Island, New York, or Connecticut that charge well over $4.00 extra per pack.

Medical Marijuana Excise Taxes

Up until July 1, 2021, the sales of medical marijuana will be subject to a 4% excise tax.

Fuel Excise Taxes

Every gallon of gas is taxed at 21.5¢ for regular fuel and 22.5¢ for diesel. This can add up to about $2.00 or more every time you fill up your tank.

Rental Vehicle Excise Taxes

Had an accident or taking a short trip? You’ll have to pay a 10% tax on any short-term vehicle rentals.

New & Used Motor Vehicle Excise Taxes

In addition to gasoline to drive them, cars are subject to excise taxes. If you’ve bought a new or used car this tax year, you might have had to pay excise taxes on the transaction. However, if the car was less than $4,000 it is exempt from sales taxes in the state of Arkansas.

Parks & Tourism Excise Taxes

If you like to take advantage of the many recreational activities available in Arkansas, you’ll likely be paying an additional tax to enjoy these luxuries. There is a 2% excise tax charged on park and tourism activities like camping at a public or privately owned campground or renting watercraft. The admission to tourist attractions is also taxed.

All in all, excise taxes can be a pain or irrelevant depending on your spending habits.

Arkansas Insurance Tax

As of 2019, you will no longer face a federal or state health insurance penalty if you do not have coverage.

Arkansas also imposes taxes on premiums from policyholders collected by insurance companies.It’s possible that some of the cost burden may be passed onto consumers.

Arkansas State Property Tax

Arkansas has a median property tax rate of 0.52% which is one of the lowest in the U.S. ranking closely to Louisiana, Colorado, and neighboring state, Alabama . The average property tax bill in Arkansas is $532. However, the property tax paid on your home will depend on where you live.

Benton County residents currently pay the highest property taxes with an average bill of $929, while taxpayers in Calhoun County pay the lowest average tax bill of $275.

Calculating & Paying Your Arkansas Property Taxes

In Arkansas, property taxes are applied to both personal property (vehicles, trailers, and other items) as well as real estate (houses, condos, etc.). Your property tax will be determined by the Assessor based on:

  • The assessed value of your property
    • Real property: Market value x 20%
    • Personal Property: Usual selling price x 20%
  • Your local millage rate

Note: If the assessed value has increased more than 5% from the previous year, the taxable assessed value = previous year’s assessed value x 1.05.

Arkansas property taxes are due October 15th or the next business day. To look up your personal property tax bill and make your payment online, use the Arkansas Property Tax Center.

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Arkansas Inheritance and Estate Taxes

Arkansas taxpayers don’t have to worry about an estate tax if the decedent’s death occurred on or after January 1, 2005.

However, if the decedent was a resident of another state, you may subject to that state’s estate taxes. If you’re unsure whether you need to pay estate taxes on an inheritance, reach out to one of our tax experts for help.

Arkansas State Tax Credits

Now that you know about the many taxes you might be responsible for paying, let’s move onto tax incentives that can work in your favor.

Tax credits are offered on certain expenses or activities that are considered beneficial to the economy, environment, or are otherwise important. If you qualify for any of the Arkansas tax credits, they can be subtracted from your tax bill.

Arkansas tax credits include:

  • Adoption Credit: You might be able to receive a credit for 20% of the child adoption expenses allowed on your Federal return.
  • Child Care Credit: If you paid someone to provide care for your child, disabled dependent, or spouse so that you could work, you might be eligible for this tax credit. Using Federal Form 2441, you can calculate how much you can claim, which is 20% of the federal credit.
  • Homestead Tax Credit: You might be able to receive a credit of up to $350 toward property taxes owed on your primary residence.
  • Other State Tax Credit: This credit is applicable for taxes you paid to another state that are also included in your Arkansas income taxes. You will be required to provide a copy of the other state’s tax return as proof.
  • Political Contributions Credit: You can claim up to $50 per taxpayer for contributions to state or local candidates, political action committees, or organized political parties.

The state also awards a credit for those suffering from Phenylketonuria Disorder or other metabolic disorders.

Note: Some of these tax credits are only applicable to full-year and part-year residents.

Arkansas Personal Tax Credits

Instead of a personal tax exemption, Arkansas offers personal tax credits in the amount of $26 for each filer and dependent. You can claim a personal tax credit if:

  • You’re the primary filer
  • You have a spouse
  • You’re 65 or older
  • You’re blind
  • You’re deaf
  • You’re filing as Head of Household or Qualifying Widow(er)
  • You have dependents
  • You have a dependent with developmental disabilities

Note: If you and spouse are filing a joint return, check the box for yourself and the one for an additional credit for your spouse as applicable.

Arkansas State Tax Exemptions and Deductions

In addition to credits, Arkansas offers a variety of state tax exemptions and deductions that can work in your favor to reduce your income taxes.

Arkansas State Tax Exemptions

Exemptions are applicable to certain types of income, meaning that these sources are not included in your tax liability. Arkansas taxpayers can take advantage of the following exemptions:

  • Child support payments
  • Welfare benefits
  • Lump sum life insurance proceeds
  • Accident and health insurance proceeds
  • Gifts
  • Cash rebates (on certain purchases)
  • Social Security and railroad retirement benefits
  • Scholarships, grants, and fellowships (certain qualifications apply)
  • Border city exemption (residents of Texarkana are exempt from Arkansas income taxes)
  • U.S. military pensions

If you qualify for any of these exemptions, the income from those sources should not be included when calculating your taxable income.

There were several changes to Arkansas exemptions as of tax year 2018 that might apply to you:

  • Military benefits received by members of the uniformed services are exempted from income tax in accordance with Act 141.
  • Unfortunately, Act 141 also changed the rule for unemployment income. Now, unemployment compensation is no longer exempt from income taxes.
  • In addition to generous deductions, if you contribute to the Arkansas Tax Deferred Tuition Savings Program, you can use the distributions to pay for qualified higher education expenses including: elementary, secondary public, private, or religious schools.

Note: Keep in mind that exemptions often change from year to year so be sure to check the latest Arkansas tax policies when filing income tax return.

Arkansas Deductions

Deductions lower your taxable income. You can either take a standard or itemized deduction. Typically, taxpayers choose whichever will result in a larger reduction of their tax bill. The Arkansas standard deduction is $2,200 for all filing statuses except married filing jointly, which is $4,400.

The itemized deductions available to Arkansas taxpayers fall into several categories, including casualty and theft losses, interest expenses, and miscellaneous expenses. However, the deductions most taxpayers are able to take advantage of include:

  • Medical and dental expenses: This can include fees paid to doctors, for hospital services, insurance premiums, therapy, and other related expenses. However, this deduction is limited to 10% of your adjusted gross income (AGI).
  • Taxes paid: You may be able to take a deduction for foregin income taxes, real property taxes, and personal property taxes.
  • Charitable contributions: You can deduct certain contributions including cash, property, or expenses incurred while donating your services to qualified organizations.

It’s a good idea to thoroughly review the potential deductions available to take full advantage of opportunities to reduce how much you have to pay in taxes.

Note: if you’re married filing separately, if one spouse chooses the itemized deduction, the other must also itemize their deductions.

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Calculating Your Arkansas Tax Refund

When it comes time to calculate your Arkansas state taxes, use our income tax calculator to easily estimate your tax bill or refund. To ensure that you do your taxes correctly, we recommend:

  • Using our Arkansas state tax guide as a reference for understanding state taxes
  • Carefully completing all the necessary sections and tax forms that apply to you
  • Checking any potential changes to tax rates on the state tax website
  • Referring to a tax professional when questions or issues arise

Additionally, in an effort to help reduce tax fraud and issues with incorrect refund disbursement, the Arkansas Department of Finance and Administration requests that you provide your driver’s license information or state-issued identification card to verify your identity. However, it is not required.

How to Pay Arkansas Taxes

If you think that you’ll owe more than $1,000 in taxes, you will be required to make estimated payments. You should complete Estimated Tax Declaration Vouchers which will be submitted for each payment you need to make.

Payments can be made in-full by April 15th or on the quarterly payment system by these dates:

  • April 15th
  • June 15th
  • September 15th
  • January 15th

It’s important to note that if any of these dates falls on a weekend, the payment is due the following business day. You can make your estimated payments in several convenient ways including through your bank account online or by mail with a check or money order.

Failing to make your payments on time and in the required amount might result in penalties. However, there are some exceptions. And, if you believe you’ve been penalized unfairly, you can submit a penalty waiver request.

Note: If you qualify as a financially distressed taxpayer, you might also be able to take advantage of the Offer in Compromise Program or a payment plan agreement. For either of these options, you’ll need to get approval.

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Arkansas Tax Facts

Arkansas has some interesting tax policies you’ll want to be aware of:

Summary of Federal Taxes

Remember, in addition to your Arkansas income taxes, you need to file your federal tax return if you made more than $12,000 in the last tax year.

Federal income taxes should be completed first, even though they are both due by the same deadline (April 15th) because you use some of the information from your federal tax forms to complete your state tax forms.

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Summary of Federal Taxes
Remember that Arkansas state taxes are separate from federal state taxes, and that the Arkansas tax brackets are different at a state level.
Tax Considerations

This information is accurate as of 2019. Special circumstances that can affect your tax return may apply.

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