Arkansas Tax Guide

Arkansas at a Glance

Arkansas has a progressive income tax with two brackets: 2% on the first $4,600 of taxable income and 3.9% on income above that threshold. The top rate has been gradually reduced in recent years as part of ongoing tax reform.

The standard deduction is $2,470 for single filers and $4,940 for married filing jointly. Arkansas does not tax Social Security benefits at the state level and offers a small $29 per-dependent tax credit.

Key Tax Facts for Arkansas

Arkansas Income Tax Brackets (2026)

Below are the Arkansas state income tax brackets. Rates apply to taxable income within each range — you only pay the higher rate on the portion of income that falls in that bracket.

Single / Married Filing Separately

Married Filing Jointly

How Your Arkansas Paycheck Is Calculated

Every paycheck goes through the same basic pipeline from gross pay to the net amount that hits your bank account:

1. Gross Pay — Your total earnings for the pay period. For hourly workers this is (hours × rate) plus any overtime or double-time premiums. For salaried employees it’s your annual salary divided by the number of pay periods.
2. Pre-Tax Deductions — Contributions to 401(k), 403(b), HSA, or FSA are subtracted before income taxes are calculated. These lower your taxable wages but Social Security and Medicare still apply to the full gross in most cases.
3. Federal Income Tax — Withheld using the IRS Publication 15-T percentage method based on your W-4 filing status, credits, and additional withholding elections. For 2026, rates range from 10% to 37%.
4. State Income Tax — Arkansas withholds state income tax at rates of 2% – 3.9% based on your annualized income and filing status. The standard deduction is $2,470 (single) / $4,940 (MFJ).
5. FICA Taxes — Social Security (6.2% on wages up to $184,500) and Medicare (1.45% on all wages). If your year-to-date earnings exceed the Social Security wage base, that portion stops being withheld.
6. Net Pay (Take-Home) — What’s left after all taxes and deductions. This is the amount deposited into your account each pay period.

Good to Know

• Review your W-4 periodically. If you consistently receive a large refund, you may be over-withholding. Consider reviewing your W-4 Step 3 credits or Step 4(b) deductions to better align your withholding with your actual tax liability. The IRS Tax Withholding Estimator can help.
• Benefits of contributing to a 401(k) or 403(b). Pre-tax retirement contributions can reduce your federal and state taxable income for the year. Even a modest percentage — say 3% to 6% — may noticeably lower your tax withholding while building long-term savings. Consult your plan administrator or a financial advisor for guidance.
• Benefits of an HSA if you’re eligible. Health Savings Accounts offer a rare triple tax advantage — contributions lower your taxable income now, the balance grows tax-free, and withdrawals for qualified medical expenses are also tax-free. If you’re enrolled in a qualifying high-deductible health plan, an HSA is one of the most tax-efficient savings tools available.
• Arkansas tax note. Arkansas has two income tax brackets with a top rate of 3.9%, which has been gradually reduced in recent years.
• Arkansas tax note. Arkansas does not tax Social Security benefits at the state level.
• Arkansas tax note. Arkansas offers a small $29 per-dependent tax credit.

Sources

The information in this guide is based on the following official and publicly available sources. Always verify current rates and rules before making financial decisions.

• Arkansas Department of Finance and Administration — Individual Income Tax
• IRS Publication 15-T (2026) — Federal Income Tax Withholding Methods
• IRS Topic No. 751 — Social Security and Medicare Withholding Rates
• Social Security Administration — Contribution and Benefit Base

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