Arkansas · 2027 and beyond
Arkansas in 2027 and beyond: what is already law, and what is still open
No tax change from the ballot. The top rate fell to 3.7% for 2026; the homestead credit rises to $675 on 2027 bills. What is on the 2026 return, what starts with tax year 2027, and what is scheduled or conditional after that.
By Charles Trautman, EA, editor
Need to Know Tax · written from Arkansas Department of Finance and Administration (DFA), Income Tax Administration sources and the unofficial November 3 election returns, November 12, 2026 · not yet reviewed by an Arkansas practitioner
No tax change from the ballot. The top rate fell to 3.7% for 2026; the homestead credit rises to $675 on 2027 bills. This page keeps apart three things that get mixed together in the news: what is on the 2026 return you file in early 2027, what begins with tax year 2027, and what is scheduled, conditional or still undecided after that. Election figures are the unofficial November 3, 2026 returns and are not final until the state certifies them.
What the voters decided on November 3, 2026
| Measure | Result | What it does |
|---|---|---|
| Issue 3 | Rejected | Would have let the Legislature create economic development districts. Not a household tax measure. |
Unofficial returns. Results become final when the state certifies them, usually by early December.
This return, next year, and later
| When | What applies |
|---|---|
| The 2026 return, filed in early 2027 | The top individual rate is 3.7%, down from 3.9%, retroactive to January 1, 2026. |
| The state sales tax on groceries ended January 1, 2026; local taxes still apply. | |
| None of the new federal deductions is allowed on the Arkansas return. | |
| Starting with tax year 2027 | The top corporate rate falls from 4.3% to 4.1%. |
| The homestead property tax credit is $675, up from $600, on the bill paid in 2027. | |
| 2028 and later, or conditional | No further individual rate cut is enacted. Arkansas has cut the rate in each of the last four years, so the 2027 session is the thing to watch. |
Items under 2027 and later do not change the 2026 return. They matter for 2027 withholding, estimated payments and planning. The detail behind each line is in the other Arkansas articles.
The 2025 federal law and the Arkansas return
Arkansas builds its return from its own income lines, not from federal adjusted gross income or taxable income, and the Legislature declined to adopt the federal deductions for tips, overtime, seniors or car-loan interest.
That is the reason a change on the federal return, such as the deductions for tips, overtime and people 65 and older, may or may not show up on the Arkansas return. The federal side is in The new deductions for tips, overtime and seniors.
What to watch
The 2027 regular session. When something on this page changes, the change is logged on the updates page with its date.
What to bring
- Your 2026 federal and Arkansas returns, once filed, to set 2027 withholding and estimated payments against them
- Your last pay stub of 2026 and the first of 2027, to see whether withholding changed
- Any notice from the state about a 2027 rate, credit or filing change
Questions people ask
Does anything here change the Arkansas return I file in early 2027?
Only what is listed under the 2026 return. Everything listed under 2027 or later affects withholding, estimated payments and planning, not the return for 2026.
Are the election results final?
Not yet. The figures on this page are the unofficial returns. The state certifies results in the weeks after the election, and this page will be corrected if anything changes.
How will I know if this page changes?
Every change is logged on the updates page with its date and the article it affects. State legislatures meet in early 2027 and some act before the filing deadline.
Arkansas, after the election
No tax change from the ballot. The top rate fell to 3.7% for 2026; the homestead credit rises to $675 on 2027 bills.
Written by Charles Trautman, EA, editor · Need to Know Tax, Lone Tree, Colorado
Questions about this article in Arkansas are answered by [your practice name] · [your phone] · [your email address]. We’re looking for an EA or CPA in each Arkansas city to hold that city’s seat and take this spot — is that you?
An invitation to Arkansas EAs and CPAs
These Arkansas pages were written by the editor from the Arkansas Department of Finance and Administration (DFA), Income Tax Administration’s own publications, and they need an Arkansas practitioner’s eye. One enrolled agent or CPA in each Arkansas city holds that city’s seat: reads these pages before the filing season and is credited as a reviewer, is named on every page of their city’s edition, and answers its readers’ questions. $1,000 for the 2026 season, the charter price. Take your city’s seat (a two-minute form and a card), tell us you’re interested, write to editor@needtoknowtax.com, or read how it works.
Sources and where to check
- Arkansas House of Representatives: Tax cuts passed in special session (HB1001 and SB1, Acts 1 and 2 of 2026)
- HB1001, 2026 First Extraordinary Session: bill text and status (Act 1, signed May 6, 2026)
- Talk Business & Politics: Governor signs tax cuts into law, with DFA cost estimates
- EY Tax Alert 2026-1239: Arkansas lowers top rate retroactive to January 1, 2026; revised withholding
- Bloomberg Tax: Arkansas reduces highest rate in 2026 withholding methods (May 29, 2026 revision)
- EY Tax Alert 2026-2029: Arkansas does not uniformly adopt the 2025 federal law’s compensation and benefits provisions
- HB1103, 2026 Fiscal Session: homestead credit to $675 (Act 174, May 1, 2026)
- Arkansas Advocate: homestead tax credit bill advances in the fiscal session
- Kiplinger: Arkansas grocery tax repeal, January 1, 2026
- KTLO: the statewide measures on the November 2026 ballot
- Tax Foundation, How Tax Policy Fared on the Ballot in 2026 (unofficial results)