Arkansas State Tax
State tax is a tax issued by a state on your income within a tax year. Similar to federal taxes, Arkansas state tax is self-assessed and is based on a percentage you pay the state government on your income. Some states have a flat tax rate or no tax at all, even. This is not the case for Arkansas state tax.
Is Arkansas a Tax-Free State?
No, Arkansas is not a tax-free state. This begs the question, “Is Arkansas a retirement-friendly state?” Many retirees seek income tax-free states, and Arkansas is not one of them. Therefore, from a personal income tax-only standpoint Arkansas is not a retirement friendly state.
Who Pays Arkansas Income Tax?
Just like the federal government, if you earn an income, you must pay income taxes in Arkansas. As a traditional W-2 employee, your Arkansas taxes will be drawn on each payroll automatically. You will see this on your paycheck stub, near or next to the federal taxes.
If you work remotely, you generally should pay taxes to the state in which the work is performed. Employers will generally also pay taxes on wages paid to these workers to the same state, even if the employer has no physical presence in that state. However, some states may require that workers be taxed based on their employer’s location. These rules may change if you are working from home due to COVID.
How Do You Pay Arkansas Taxes?
To pay Arkansas income tax, you can pay online using the Arkansas Taxpayer Access Point. From there, you can select “Make Income Tax Payment” under the Income Tax menu, then select the payment method. From there you will be navigated to https://www.officialpayments.com/index.jsp. You can make an online payment there.
You can also mail your Arkansas income tax payment to:
P.O. Box 3628
Little Rock, AR 72203
Please affix payment (if due) along with your Arkansas tax forms. (Please note, these are different than IRS tax forms for federal returns.)
How Much Should You Pay in State Tax?
Arkansas has four marginal tax brackets, ranging from 2 to 6.6%. Each tax rate applies to earnings within the applicable marginal tax bracket, which is the same for single filers and couples filing jointly in Arkansas.
When Are Arkansas Tax Returns Due?
The state tax deadlines often coincide with the federal tax deadline, which typically is on April 15, unless it falls on a weekend. Learn more about tax deadlines here.
How Do You Check If You Paid Your Income Taxes in Arkansas?
If you want to make sure your state taxes were paid, contact the Arkansas Department of Revenue to see if your payment was received. The contact information is as follows:
1816 W 7th St, Rm 2300
Little Rock, AR 72201
View more contact information for the Arkansas Department of Revenue.
Deducting Income Taxes
If you pay Arkansas income tax, the IRS allows you to claim a deduction on your federal tax return for them. You can claim a state income tax deduction if you itemize deductions on your federal return.
To determine if you should itemize your deductions, first add up your calendar-year deductible expenses, including your state income tax expense, and determine if the amount is greater than the standard deduction amount for your filing status. You can claim a standard deduction of $12,400. So, if you claim more than that amount, then you should consider itemizing your taxes.
Due to the Tax Cuts and Jobs Act, state and local tax deductions, including state income taxes, are limited to $10,000 per year ($5,000 for married filing separately).
More Help With Taxes in Arkansas
Understanding your tax obligation takes time. What’s takes even more time is figuring out how to deduct Arkansas income tax from your federal taxes as an itemized deduction.
So, get help with H&R Block Virtual! With this service, we’ll match you with a tax pro with Arkansas tax expertise. Then, you will upload your tax documents, and our tax pros will do the rest! We can help with your AR taxes, including federal deductions for paying state taxes.
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