Personal Income Tax
Resident and nonresident individuals, estates, and trusts deriving income from within the state are subject to a tax on their net income at the following rates:
| Net Taxable Income | Rate | Net Taxable Income | Rate |
|---|
| First $2,999 | 1.0% | Next $6,000 | 4.5% |
| Next $3,000 | 2.5% | Next $10,000 | 6.0% |
| Next $3,000 | 3.5% | $25,000 & over | 7.0% |
To arrive at net taxable income, the taxpayer may elect to either itemize deductions or to use the standard deduction of $2,000 per taxpayer. (Married couples may deduct $2,000 per spouse.) Federal income tax is not deductible from income subject to Arkansas's personal income tax.
A credit is allowed resident individuals for the amount of income tax paid to any other state not to exceed what the tax would be on out-of-state income if added to the Arkansas income and calculated at Arkansas income tax rates. The following personal tax credits are allowed:
Single individuals
- Blind or deaf, additional $20
- Blind and deaf, additional $40 | $20 |
| Head of Household | $40 |
| Dependents with gross income of less than $3,000 | $20 |
| Fiduciaries | $20 |
65 or older head of household
- Spouse 65 or older, additional $20
| $40 |
| Credit for "developmentally disabled" dependent in home | $500 |
