Arkansas State Taxes Overview
The Arkansas Department of Finance and Administration website or a tax professional is an excellent place to find the latest information on filing and paying Arkansas state income tax. Arkansas has a lower standard deduction than the federal standard deduction. It is estimated that most filers will be able to claim a deduction of $2,200. In the case of married filers, the amount is doubled to $4,400 because they are filing jointly.
You can download the form or call the IRS toll-free at 1-800-829-3676 and ask for Form W-4V, Voluntary Withholding Request to request a Voluntary withholding from social security. Arkansas also offers seniors a deduction of $6,000 for other types of retirement income.
Arkansas state tax is mixed. Income taxes are above average relative to other states. Arkansas’s property taxes are among the lowest in the nation, and there are no estate or inheritance taxes.
Use this Arkansas State Tax Calculator to determine your federal tax amounts, state tax amounts, along with your Medicare and Social Security tax allowances.
If you are an Arkansas business owner, you can learn more about how to collect and file your Arkansas sales tax return. In Arkansas, liquor vendors are responsible for paying a state excise tax of $2.50 per gallon, plus Federal excise taxes, for all liquor sold.
Resident and Business Tax Information
Do you pay state income tax in Arkansas? Yes. Arkansas has graduated individual income tax rates from 1% to 6.9% of net taxable income.
Are property taxes high in Arkansas? No. The average property tax rate is 0.61%.
What taxes do seniors pay in Arkansas? Social Security income is exempt. Retirees get a $6,000 deduction on other retirement income.
Where can I find Arkansas property tax rates? Average property tax rates by county are available from the Arkansas Department of Revenue.
How much should I set aside for Arkansas taxes? Set aside 30-40% of earnings to cover state and federal taxes if self-employed.
Can businesses make monthly or quarterly sales tax payments in Arkansas? Yes.
How is withholding tax calculated in Arkansas? The state withholding tax is a percentage of taxable wages paid to employees.
Is Arkansas Tax-Friendly for Residents?
According to the Tax Foundation, Arkansas is tax-friendly for retirees, with no taxes on Social Security benefits and up to $6,000 of retirement income. The state offers various deductions and credits and has some of the lowest property taxes in the U.S.
Payroll Taxes are deducted if you are a W2 employee. Arkansas does have a personal income tax. The sales tax rate is 6.5%.
Providing residents with an affordable and attractive living environment is Arkansas’ top priority. With a population of about three million people, Arkansas is considered a mid-size state.
Arkansas is not a tax-free state. If you earn an income, you must pay income taxes in Arkansas.
Sales taxes in Arkansas are high. The state offers relatively low income and property taxes. Arkansas tax information is based on the percentage you pay to the state government on your income.