Arkansas has progressive income tax rates from 0% to 3.9% — recently reduced and among the lower rates in the region.
Arkansas Income Tax Rates for 2026
| Taxable Income | Tax Rate |
|---|---|
| $0 - $5,099 | 0% |
| $5,099 - $10,299 | 2.0% |
| $10,299 - $15,099 | 3.0% |
| $15,099 - $24,299 | 3.4% |
| Over $24,299 | 3.9% |
Recent Rate Reductions
| Year | Top Rate |
|---|---|
| 2022 | 5.5% |
| 2023 | 4.9% |
| 2024 | 4.4% |
| 2025 | 3.9% |
| 2026 | 3.9% |
Arkansas has significantly cut rates over recent years.
Arkansas Tax Calculator Examples
Example 1: $75,000 Single Filer
| Component | Calculation |
|---|---|
| Tax on first $5,099 (0%) | $0 |
| Tax on $5,099-$10,299 (2.0%) | $104 |
| Tax on $10,299-$15,099 (3.0%) | $144 |
| Tax on $15,099-$24,299 (3.4%) | $313 |
| Tax on $24,299-$75,000 (3.9%) | $1,977 |
| Total Arkansas tax | $2,538 |
| Effective rate | 3.38% |
Example 2: $120,000 Married Filing Jointly
| Component | Calculation |
|---|---|
| Tax on first $5,099 (0%) | $0 |
| Tax on $5,099-$10,299 (2.0%) | $104 |
| Tax on $10,299-$15,099 (3.0%) | $144 |
| Tax on $15,099-$24,299 (3.4%) | $313 |
| Tax on $24,299-$120,000 (3.9%) | $3,732 |
| Total Arkansas tax | $4,293 |
| Effective rate | 3.58% |
Note: Arkansas uses the same brackets for all filing statuses.
Arkansas Standard Deduction (2026)
| Filing Status | Standard Deduction |
|---|---|
| Single | $2,270 |
| Married Filing Jointly | $4,540 |
| Married Filing Separately | $2,270 |
| Head of Household | $2,270 |
Arkansas has relatively small standard deductions compared to federal.
Arkansas Retirement Income
Social Security
Fully exempt — Arkansas does not tax Social Security benefits.
Retirement Income Exemption
| Situation | Exemption |
|---|---|
| General retirement income | First $6,000 exempt |
| Military retirement | 100% exempt |
| Railroad retirement | Exempt |
The $6,000 exemption applies to:
- Private pensions
- 401(k) distributions
- IRA distributions
- Public pensions
Military Benefits
Arkansas completely exempts military retirement pay — no limits, no income thresholds.
What Income is Taxed in Arkansas?
Taxed:
- Wages and salaries
- Self-employment income
- Interest and dividends
- Capital gains (taxed as ordinary income)
- Retirement income (above $6,000)
Not taxed or exempt:
- Social Security — Fully exempt
- First $6,000 of retirement income
- Military retirement — Fully exempt
- Arkansas municipal bond interest
Arkansas vs. Neighboring States
| State | Top Income Tax Rate |
|---|---|
| Texas | 0% (no income tax) |
| Tennessee | 0% (no income tax) |
| Louisiana | 3% (flat) |
| Missouri | 4.8% |
| Oklahoma | 4.75% |
| Mississippi | 4.7% |
| Arkansas | 3.9% |
Arkansas has become more competitive after recent cuts.
Filing Arkansas State Taxes
| Filing Requirement | Details |
|---|---|
| Form | AR1000F (full year) |
| Due date | April 15 |
| E-file | Yes, through ATAP |
| Extension | Automatic with federal |
Arkansas Sales Tax
- State rate: 6.5%
- Local rates: 0% - 5.125% additional
- Total range: 6.5% - 11.625%
- Groceries taxed at reduced 0.125% state rate
Arkansas has high combined sales tax rates in many areas.
Arkansas Property Tax
- Average effective rate: ~0.62% (below national average)
- Homestead credit available
- Generally favorable for homeowners
Recent Arkansas Tax Changes
| Change | Impact |
|---|---|
| Top rate cut to 3.9% | Significant savings |
| Standard deduction increase | Modest savings |
| Retirement exemption | $6,000 maintained |
| Military exemption | Full exemption |
Arkansas continues to move toward lower rates.
Tips to Reduce Arkansas Taxes
- Maximize retirement exemption — $6,000 excluded annually
- Time retirement distributions — Spread across years
- Military retirement — Fully exempt, no planning needed
- Itemize if beneficial — Small standard deduction
- Capital gains — No special rate, taxed as ordinary income
Arkansas Tax Authority
Arkansas Department of Finance and Administration
- Website: dfa.arkansas.gov
- Phone: 501-682-1100
- For refunds, returns, and questions
Bottom Line
Arkansas has progressive income tax from 0% to 3.9% — significantly reduced from 5.5% in 2022. The state offers full Social Security exemption, $6,000 retirement income exemption, and complete military retirement exemption. Property taxes are below average (0.62%), but sales taxes can reach 11%+ in some areas. Arkansas has become increasingly competitive with neighbors through recent tax cuts.