Arkansas · the numbers
Arkansas figures at a glance, 2026
The Arkansas numbers for the 2026 return in one place: the rates and where they start, the standard deduction, the $29 credits that stand in for exemptions, the retirement exclusion, the capital gains exclusion, the credits, the filing thresholds, the dates, and the handful of figures outside the income tax that a household meets. Each with a line on what it means, and a short list of what changed from 2025.
By Charles Trautman, EA, editor
Need to Know Tax · written from Arkansas Department of Finance and Administration (DFA), Income Tax Administration sources, November 3, 2026; updated November 12, 2026 after the election · not yet reviewed by an Arkansas practitioner
Most Arkansas figures are small and most of them are indexed. The ones that moved for 2026 are the top rate, 3.7% instead of 3.9%, and the homestead property tax credit, $675 instead of $600. The ones that will move but have not yet been published are the indexed amounts: the standard deduction, the $29 personal credit, the bracket thresholds, the Low Income Tax Table limits and the filing thresholds. The Department of Finance and Administration prints those with the 2026 forms in December or January. Until then this page shows the 2025 figures, says so, and marks the 2026 column “to come.”
The core figures
| Item | 2025 | 2026 | Note |
|---|---|---|---|
| Top rate | 3.9% | 3.7% | Act 1 of 2026, retroactive to January 1, 2026 |
| Lower rates | 0%, 2%, 3%, 3.4% | 0%, 2%, 3%, 3.4% | Unchanged |
| Top rate begins at net taxable income of | $26,400 | to come | Indexed; same for every filing status |
| Lower thresholds | $5,600 / $11,200 / $16,000 | to come | Indexed; 2026 withholding formula still uses the 2025 figures |
| Bracket-adjustment phase-down range | $94,701–$97,800 | $94,701–$97,600 | Set by Act 1 of 2026; affects the “minus adjustment,” not the rate |
| Starting point | Arkansas gross income | Arkansas gross income | Not federal AGI; see How Arkansas income tax works |
| Standard deduction, single / HOH / MFS / surviving spouse | $2,470 | to come | Indexed; itemizing on Form AR3 is allowed whether or not you itemized federally |
| Standard deduction, married filing jointly | $4,940 | to come | Indexed |
| Personal tax credit, per taxpayer, spouse and dependent | $29 | to come | Replaces exemptions; a credit against tax, not a deduction |
| Extra $29 credit for | 65+, blind, deaf, head of household, surviving spouse | same | Not for dependents |
| “65 Special” credit | $29 | to come | For a taxpayer 65+ who does not claim the $6,000 retirement exclusion |
| Retirement income exclusion, per taxpayer | $6,000 | $6,000 | Pensions, 401(k)s, IRAs after 59½; not indexed |
| Social Security, Railroad Retirement, VA benefits | Exempt | Exempt | At any income |
| Military retirement pay | Exempt | Exempt | Since 2018 |
| Long-term capital gain excluded | 50% | 50% | Schedule AR1000D; effective top rate on long-term gains 1.85% |
| Long-term gain above which the rest is exempt | $10,000,000 | $10,000,000 | Per Schedule AR1000D line 7b |
| Capital loss limit | $3,000; $1,500 for status 4 or 5 | same | Carries forward |
| Local income tax | None | None | No city or county income tax; Texarkana residents are exempt from the state tax |
The 2025 figures are from DFA’s 2025 AR1000F instructions and tax tables. Arkansas does not double the thresholds for a joint return, which is why spouses may file “married filing separately on the same return” (status 4) and each run the table on their own income.
The personal credits by household
| Household | Credits | Total |
|---|---|---|
| Single, under 65 | 1 | $29 |
| Single, 65 or older, claiming the $6,000 exclusion | 2 | $58 |
| Married, both under 65 | 2 | $58 |
| Married, two dependent children | 4 | $116 |
| Head of household, one child | 3 | $87 |
The credits come straight off the tax, so $29 is worth $29 to anyone with at least that much tax. They are the whole of Arkansas’s dependent allowance; there is no state child tax credit and no state earned income credit.
Who has to file, and the Low Income Tax Table
| Filing status | Must file if gross income is at least | May use the Low Income Table if Arkansas AGI is up to |
|---|---|---|
| Single | $14,644 | $17,500 |
| Head of household or surviving spouse, 0–1 dependents | $20,821 | $25,300 |
| Head of household or surviving spouse, 2+ dependents | $24,819 | $29,000 |
| Married filing jointly, 0–1 dependents | $24,696 | $29,000 |
| Married filing jointly, 2+ dependents | $28,723 | $36,100 |
| Married filing separately | $9,470 | Not eligible |
| Part-year or nonresident with any Arkansas income | Any amount |
The Low Income Tax Table has the standard deduction built in and reaches zero tax at the filing thresholds. Itemizers cannot use it, and married couples must file jointly to use it. Below the threshold a return is still worth filing to recover withholding.
The credits
| Credit | Figure | Refundable? | Where |
|---|---|---|---|
| Additional Tax Credit for Qualified Individuals | $60 per taxpayer at net taxable income of $26,500 or less, down $5 per $100, zero at $27,601 (verify; 2025 range, indexed) | No (verify) | AR1000TC line 6; return must be filed on time |
| Child and dependent care credit | 20% of the federal credit as computed under IRC 21 in effect January 2, 2013 | No; a refundable 20% version applies instead if the child attends a state-approved early childhood program | Form AR2441 |
| Adoption credit | 20% of the federal adoption credit | No | AR1000TC line 3, attach federal Form 8839 |
| Political contributions credit | $50 per taxpayer, $100 joint, for gifts to Arkansas state and local candidates and parties | No | AR1000TC line 1 |
| Credit for tax paid to another state | Lesser of the tax paid to the other state or that income at Arkansas rates | No | AR1000TC line 2; residents only; attach the other return |
| Developmental disabilities credit | $500 per qualifying dependent | No | AR1000TC line 7, Form AR1000-DD |
| State earned income credit | None | ||
| State child tax credit | None; each dependent is a $29 personal credit | AR1000F line 7B |
Deductions and adjustments with a number on them
On Form AR1000ADJ: 529 contributions to the Arkansas Brighter Future plan up to $5,000 per taxpayer ($10,000 joint), $3,000 ($6,000) for another state’s plan, and $7,500 ($15,000) for a rollover into the Arkansas plan in the rollover year; teacher classroom expenses $1,000 per teacher; student loan interest up to $2,500; the traditional IRA deduction phasing out at $79,000–$89,000 single and $126,000–$146,000 joint Arkansas AGI (verify 2026). On Form AR3: a medical floor of 10% of Arkansas AGI (verify), no cap on property taxes, and employee business expenses over 2% of AGI via Form AR2106. Arkansas also adds its own early-withdrawal penalty on IRAs, 10% of the federal Form 5329 amount, on AR1000F line 32.
Worked example: a single filer with $40,000, 2025 figures and the 2026 rate
Wages of $40,000, no other income, no adjustments, standard deduction. The 2026 indexed deduction and credit are to come, so the 2025 amounts are used.
| At 3.9% (2025 law) | At 3.7% (2026 law) | |
|---|---|---|
| Arkansas adjusted gross income | $40,000 | $40,000 |
| Standard deduction | −$2,470 | −$2,470 |
| Net taxable income (line 28) | $37,530 | $37,530 |
| Tax on the first $26,400 | $610 | $610 |
| Tax on the remaining $11,130 | $434 | $412 |
| Personal tax credit | −$29 | −$29 |
| Arkansas tax | $1,015 | $993 |
Rounded; DFA’s printed table may differ by a dollar or two. The Act 1 saving is $22 on this income. Had the filer put $5,000 into the Arkansas 529 plan, Arkansas tax would fall another $185; had the $40,000 included $8,000 of tips, nothing on this return would change, because Arkansas taxes tips.
Filing and payment dates
| Date | What |
|---|---|
| January 15, 2027 | Fourth 2026 estimated payment, Form AR1000ES or ATAP |
| April 15, 2027 | Form AR1000F or AR1000NR and all 2026 tax due; first 2027 estimated payment; Form AR1055-IT if you want an Arkansas extension without a federal one |
| June 15 and September 15, 2027 | Second and third 2027 estimated payments |
| November 15, 2027 | Extended due date, with a federal Form 4868 extension (checked on the return) or Form AR1055-IT. Extension of time to file only. |
Estimated payments are expected when you will owe $1,000 or more after withholding and credits, unless those cover 90% of this year’s tax or 100% of last year’s. Underpayment penalty 10% (Form AR2210); late payment 1% a month plus 10% a year interest; late filing 5% a month; combined cap 35%. Details in Arkansas calendar and forms.
Beyond the income tax
| Item | Figure |
|---|---|
| Homestead property tax credit (Amendment 79) | $600 on the bill paid in 2026 (2025 assessment year); $675 for assessment years beginning January 1, 2026, on the bill paid in 2027 (Act 174 of 2026) |
| Homestead assessment cap | 5% a year on a homestead, 10% on other property; assessed value frozen at 65 or if disabled |
| Disabled veteran homestead exemption | Full exemption for 100% service-connected disability or surviving spouse, up to 160 acres |
| State sales tax | 6.5%, plus city and county rates |
| State sales tax on groceries | 0% from January 1, 2026 (was 0.125%); local grocery taxes continue |
| Estate tax, inheritance tax, gift tax | None |
| Reciprocal agreements with other states | None; Texarkana border-city exemption only |
What changed from 2025
- Top rate 3.7%, down from 3.9%, on net taxable income above the top threshold, for all of 2026. Act 1 of the May 2026 special session. The pass-through entity rate falls with it.
- Bracket-adjustment range now $94,701–$97,600.
- Withholding revised May 29, 2026 to 3.7%; supplemental rate 3.7%.
- Homestead credit $675 for the 2026 assessment year, up from $600; visible on the 2027 bill.
- State grocery sales tax 0% from January 1, 2026.
- Teacher classroom deduction $1,000, in its second year at that level (Act 878 of 2025).
- Indexed figures to come: standard deduction, $29 credit, thresholds, Low Income Table limits, filing thresholds, the $60 credit’s range.
- Unchanged by design: no adoption of the federal tips, overtime, senior, car-loan interest or bonus depreciation provisions. See What’s new in Arkansas for 2026.
Behind the scenes: why the figures are so small
Arkansas indexes its standard deduction, credits and thresholds each year, but from very low bases set decades ago, so the deduction is $2,470 and the dependent allowance is $29 of tax. The legislature’s lever is the rate: the top rate has fallen from 7% in 2013 to 3.7% in 2026 through a run of cuts. The result is a tax that bites early, at $5,600 of taxable income, but never hard.
What to bring
- Last year’s AR1000F, for a line-by-line comparison and the 100% safe-harbor figure
- Dates of birth for everyone on the return; 65 adds a $29 credit
- Forms 1099-R and SSA-1099, so the $6,000 exclusion and the Social Security exemption are applied
- Brokerage 1099-B with long-term and short-term gains separated, for Schedule AR1000D
- 529 contribution statements, Arkansas plan or another state’s
- Property tax and mortgage interest statements, in case Form AR3 beats the $2,470 standard deduction
- Estimated payment confirmations from ATAP, with dates
Questions people ask
What is the Arkansas income tax rate for 2026?
Graduated: 0% on the first $5,600 of net taxable income, then 2%, 3% and 3.4% up to $26,400, and 3.7% on everything above that. Because the top bracket starts so low, almost every full-time worker’s marginal rate is 3.7%.
Does Arkansas have a standard deduction?
Yes, but a small one: $2,470 for a single filer and $4,940 for a joint return in 2025, indexed for 2026. You may itemize on Form AR3 instead even if you took the federal standard deduction, and with a deduction that small, many homeowners should check.
Is Social Security taxed in Arkansas?
No, at any income. Pensions, 401(k)s and IRAs are taxed above a $6,000 per-person exclusion, and military retirement is fully exempt.
What is the capital gains rate in Arkansas?
Half of a net long-term gain is excluded on Schedule AR1000D, so the top effective rate is 1.85%. Short-term gains are taxed in full at ordinary rates. Long-term gain above $10 million is exempt entirely.
Small numbers, low rate, and a top bracket that starts at $26,400
Know the 3.7%, the $2,470, the $29 and the $6,000, and most of the Arkansas return is already in your head.
Written by Charles Trautman, EA, editor · Need to Know Tax, Lone Tree, Colorado
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Forms and official pages named in this article
- 2025 AR1000F and AR1000NR instructions: standard deduction, personal credits, filing thresholds, $6,000 exclusion, penalties
- 2025 Arkansas tax tables, Low Income and Regular
- Schedule AR1000D, Capital Gains
- Additional Tax Credit for Qualified Individuals worksheet (AR1000TC line 6)
- 2026 Arkansas withholding tax formula
- DFA publication 105, Estimated Tax
- DFA individual income tax forms index: AR1000ADJ, AR1000CE, AR1000TC, AR2441, AR3, AR2210 and the rest
Sources and where to check
- DFA: Individual income tax forms, 2025 forms and 2026 estimated vouchers
- Arkansas House of Representatives: Tax cuts passed in special session (Act 1 of 2026)
- HB1001, 2026 First Extraordinary Session: text and status
- Bloomberg Tax: Arkansas 2026 withholding methods revised May 29, 2026
- EY Tax Alert 2026-2029: Arkansas conformity to the 2025 federal law
- HB1103, 2026 Fiscal Session: homestead credit to $675 (Act 174)
- Kiplinger: Arkansas grocery tax repeal, January 1, 2026
- DFA: Deadlines and extensions