Overview
Arkansas uses a progressive income tax system with graduated brackets. The state has a relatively simple withholding setup that relies on the number of personal allowances claimed on Form AR4EC, along with a standard deduction.
State Income Tax (SIT)
Arkansas imposes a progressive state income tax on wages. For 2026, each personal allowance is valued at $29 and the standard deduction is $2,470. Withholding is calculated by annualizing the employee’s wages, applying the standard deduction and allowances, and then using the state’s tax brackets to determine the annual tax. There is also a special provision for Texarkana residents.
| Tax Structure | Progressive with graduated brackets |
| State Withholding Form | Form AR4EC |
| Personal Allowance Value | $29 per allowance |
| Standard Deduction | $2,470 |
| Supplemental Rate | 3.9% |
| Special Requirements | Texarkana residents may have special provisions |
Supplemental Wages
Arkansas supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 3.9%.
Employer State Unemployment Tax (SUTA)
Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 3.1%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 3.1% |
| Rate Assignment | Experience-rated; assigned annually by the state |
Other Taxes & Obligations
Arkansas does not currently impose significant additional state-level payroll taxes beyond SIT and SUTA. This keeps payroll relatively streamlined compared to states with multiple layers of tax obligations.
Disclaimer: This content is provided for general informational purposes only and does not constitute legal, tax, or accounting advice. Netchex does not provide tax or legal guidance and makes no representations regarding the accuracy or applicability of this information. Laws and regulations may change. The information on this page reflects payroll tax guidelines as of March 2026.
For the most current requirements, please refer to: Arkansas Department of Finance and Administration
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