Arkansas has progressive income tax rates topping out at 3.7% for 2026 — cut from 3.9% in a May 2026 special legislative session, and among the lower rates in the region.
Arkansas Income Tax Rates for 2026
Governor Sarah Huckabee Sanders signed legislation on May 6, 2026 cutting Arkansas’s top individual income tax rate from 3.9% to 3.7%, retroactive to January 1, 2026 — the fourth rate cut since 2023. The bracket structure below reflects the 2025 tax year thresholds with the new 2026 top rate; confirm exact bracket cutoffs on your return, as they are adjusted for inflation annually and the Department of Finance and Administration publishes updated withholding tables each year.
| 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 | 3.7% |
Bracket thresholds shown are the last confirmed official figures; confirm current thresholds with the Arkansas DFA, as inflation indexing may adjust them slightly for the 2026 tax year.
Recent Rate Reductions
| Year | Top Rate |
|---|---|
| 2022 | 5.5% |
| 2023 | 4.9% |
| 2024 | 4.4% |
| 2025 | 3.9% |
| 2026 | 3.7% |
Arkansas has cut its top rate four times since 2023, and state officials say rates are now at their lowest levels since the income tax was enacted in 1929.
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 (3.7%) | $1,876 |
| Total Arkansas tax | $2,437 |
| Effective rate | ~3.25% |
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 (3.7%) | $3,542 |
| Total Arkansas tax | $4,103 |
| Effective rate | ~3.42% |
Note: Arkansas uses the same brackets for all filing statuses.
Arkansas Standard Deduction (2026)
| Filing Status | Standard Deduction |
|---|---|
| Single | $2,340 |
| Married Filing Jointly | $4,680 |
| Married Filing Separately | $2,340 |
| Head of Household | $2,340 |
Arkansas has relatively small standard deductions compared to federal. Confirm the current-year figure on your AR1000F instructions, since this amount is adjusted periodically.
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 (Act 141 of 2017 / Act 1408 of 2013 for active-duty pay).
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 | 4.7% (confirm current rate) |
| Oklahoma | 4.75% (confirm current rate) |
| Mississippi | 4.7% (flat, phasing toward elimination) |
| Arkansas | 3.7% |
Arkansas has become more competitive after four consecutive years of rate cuts.
Filing Arkansas State Taxes
| Filing Requirement | Details |
|---|---|
| Form | AR1000F (full year) |
| Due date | April 15 |
| E-file | Yes, through ATAP (Arkansas Taxpayer Access Point) |
| 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 a reduced state rate (confirm current grocery tax rate)
Arkansas has high combined sales tax rates in many areas.
Arkansas Property Tax
- Average effective rate: ~0.6% (below national average — confirm current rate)
- Homestead credit available
- Generally favorable for homeowners
Recent Arkansas Tax Changes
| Change | Impact |
|---|---|
| Top rate cut to 3.7% (May 2026, retroactive to Jan. 1, 2026) | Significant savings for higher earners |
| Corporate top rate cut from 4.3% to 4.1% (effective following fiscal year) | Business tax relief |
| Retirement exemption | $6,000 maintained |
| Military exemption | Full exemption |
Arkansas continues to move toward lower rates; this was the fourth rate cut since 2023.
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 topping out at 3.7% for 2026 — down from 5.5% in 2022 after four consecutive years of legislative rate cuts, most recently a May 2026 special session that Governor Sanders signed retroactive to January 1, 2026. The state offers full Social Security exemption, a $6,000 retirement income exemption, and complete military retirement exemption. Property taxes are below average, but sales taxes can reach 11%+ in some areas. Arkansas has become increasingly competitive with neighbors through recent tax cuts.
For a side-by-side comparison of every state’s income tax rates, see state income tax rates by state 2026 and best and worst states for taxes 2026. Federal income tax applies on top of state taxes — see 2026 federal income tax brackets to calculate your combined liability.
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