Arkansas paycheck guide
How Arkansas calculates income tax in 2026
H.B. 1001 lowered the top rate from 3.9% to 3.7% for 2026, retroactive to January 1, and the Department of Finance and Administration revised its withholding formula midyear to match. For most workers the schedule now runs 0% on the first $5,599 of net taxable income, 2% up to $11,199, 3% up to $15,999, 3.4% up to $26,399, and 3.7% above that. Single and joint filers use the same thresholds.
Higher earners do not keep the full benefit of those lower bands. Once net taxable income climbs well into six figures, Arkansas switches to a high-income calculation that taxes nearly the whole amount at 3.7%, which is why the effective rate keeps creeping up toward the top rate.
The standard deduction is modest: $2,470 for a single filer and $4,940 for a married couple filing jointly, far below the federal $16,100. Arkansas has no personal exemption deduction. Each exemption you claim for yourself, a spouse, or a dependent is instead a $29 personal tax credit taken off the tax itself.
Worked example: a $75,000 salary in Arkansas
Subtract the $2,470 standard deduction from $75,000 and $72,530 is taxable in Arkansas. The first $5,599 costs nothing. The next $5,600 costs $112 at 2%, the next $4,800 costs $144 at 3%, the next $10,400 costs $354 at 3.4%, and the remaining $46,131 costs $1,707 at 3.7%. The $29 personal credit comes off the end, and Arkansas income tax is $2,287, an effective rate of 3.05%.
Federal income tax is figured separately on $58,900, what remains after the $16,100 federal standard deduction. The 10% bracket covers $12,400, the 12% bracket $38,000, and the 22% bracket the final $8,500, for $7,670. Social Security withholding is $4,650 and Medicare $1,088. Net pay is $59,305 a year, or $4,942 a month. The Arkansas $75,000 salary page has the per-paycheck version.
Notice the gap between the two taxable incomes: Arkansas taxes $72,530 of this salary while the IRS taxes $58,900. The 0% band and low brackets offset part of that small deduction, but the effective rate still rises steadily with pay: 2.07% at $30,000, 3.05% at $75,000, and 3.62% at $250,000.
Texarkana's border-city exemption
Texarkana straddles the Arkansas-Texas line, and Arkansas law treats it specially. If you live inside the city limits of Texarkana, Arkansas, the income you earn is exempt from Arkansas income tax. If you live in Texarkana, Texas, and work in Texarkana, Arkansas, wages from that job are exempt too.
The exemption is narrow. It does not apply if your address is a rural route, or if you live in a town around Texarkana rather than in the city itself. Texarkana, Texas, residents still owe Arkansas tax on income from Arkansas sources outside Texarkana, Arkansas.
Employees claim the exemption on Form AR4EC(TX), not the regular certificate, and must tell the employer within seven days if their residence changes. If you would otherwise have to file, you still file an Arkansas return and attach the Form AR-TX your employer provides.
Withholding with Form AR4EC and cross-border work
Arkansas employers set state withholding from Form AR4EC, the state's employee withholding exemption certificate, rather than the federal W-4. You list exemptions for yourself, a spouse, and dependents, and the withholding formula turns each one into the $29 credit against the year's tax. You can also ask for a flat extra amount per check.
Little Rock, Fayetteville, Bentonville, and Fort Smith levy no city income tax, and Arkansas has no state disability or paid leave deduction, so the state figures here are the whole picture. The other lines on your stub are federal tax, Social Security, and Medicare.
Arkansas has no reciprocity agreements. Memphis residents who work in West Memphis owe Arkansas tax on those wages even though Tennessee taxes none. An Arkansas resident working in Oklahoma or Missouri pays that state's tax and claims a credit on the Arkansas return for tax paid to another state.
How Arkansas compares with its neighbors
The 2026 rate cut moved Arkansas up the table. At $75,000 a single Arkansas worker keeps $59,305, 18th among the 50 states and DC, and the state ranks 19th at $150,000. Texas and Tennessee tax no wages and leave the same worker $2,287 more. Louisiana's flat 3% leaves $423 more, and Mississippi is nearly even at $19 more. Arkansas now beats Missouri by $247 and Oklahoma by $543 at that salary.
For workers in Bentonville or Fayetteville weighing a home across the Missouri line, Arkansas now comes out $247 a year ahead at $75,000. In the Texarkana and West Memphis areas the comparison is with no-tax Texas and Tennessee. See Arkansas vs Texas and Arkansas vs Missouri for side-by-side numbers.
What to expect at your income
Earning under $50,000
Below $50,000 the 0% band and low brackets keep the Arkansas bill moderate despite a standard deduction of only $2,470. A single filer earning $30,000 pays $622 to the state, a 2.07% effective rate, and takes home $25,663. At $50,000 the bill is $1,362 and take-home is $40,993, or $3,416 a month. Working full time at $15 an hour, you would net $26,582 once $667 of Arkansas tax comes out. Claim every exemption you are entitled to on Form AR4EC, since each one is worth a $29 credit.
Earning $50,000 to $150,000
Between $50,000 and $150,000 almost every extra dollar is taxed at 3.7% in Arkansas, on top of a 22% federal rate for most of the range. Earning $100,000 as a single filer means $3,500 of Arkansas tax and $75,680 of net pay, roughly $6,307 monthly. A married couple on one $100,000 salary pays $3,132 and keeps $81,578. Because joint brackets match single ones, marriage does little to lower Arkansas tax beyond the larger standard deduction and an extra credit.
Earning over $150,000
Above $150,000 the Arkansas rate stays at 3.7% while federal rates climb to 24% and 32%, and the high-income calculation removes most of the benefit of the lower bands. A single filer pays $5,350 to Arkansas at $150,000 and $9,050 at $250,000, an effective rate of 3.62%, leaving $174,132 of take-home pay. Compared with Texas or Tennessee, the cost at $250,000 is the full $9,050. High earners with investment income should add extra withholding on Form AR4EC or make estimated payments.
Arkansas paycheck tips
Texarkana residents: file AR4EC(TX)
If you live inside Texarkana, Arkansas, or live in Texarkana, Texas, and work in Texarkana, Arkansas, give your employer Form AR4EC(TX) so Arkansas tax is not withheld.
Count your exemptions on AR4EC
Each exemption on Form AR4EC is worth a $29 credit in the withholding formula. Update the form after a marriage or a new child.
Commuting from Tennessee? Budget for Arkansas tax
Wages earned in West Memphis or elsewhere in Arkansas are taxable to Arkansas even if you live in Memphis, where Tennessee takes nothing.
Claim the other-state credit
Arkansas residents who work in Missouri or Oklahoma pay tax there first. Claim the credit for tax paid to another state on your Arkansas return.
Check the hourly math
At $20 an hour full time, take-home is $34,554 after $1,052 of Arkansas tax. The Arkansas $20 an hour page shows each paycheck.
Common mistakes
Assuming the Texarkana exemption covers the whole area
It applies only within Texarkana city limits. Residents of surrounding towns or rural routes owe Arkansas tax like anyone else.
Using federal taxable income to estimate Arkansas tax
Arkansas allows a $2,470 standard deduction, not $16,100. At $75,000 the state taxes $72,530 of income, far more than the $58,900 on the federal return.
Expecting a Texas-style paycheck in West Memphis
Living in a no-tax state does not shield wages earned in Arkansas. Without Arkansas withholding, a Tennessee resident can owe the full bill at filing time.
Moving to or from Arkansas
Moving to Arkansas
Moving to Arkansas from Texas or Tennessee adds $2,287 of state income tax at $75,000, since neither taxes wages. From Louisiana the cost is $423 and from Mississippi just $19, while transplants from Missouri keep $247 more and from Oklahoma $543 more. If you settle in Texarkana, live inside the Arkansas city limits to qualify for the border-city exemption, and file Form AR4EC with your new employer either way.
Leaving Arkansas
Leaving Arkansas for Texas or Tennessee saves the $2,287 a $75,000 earner pays the state, and Louisiana saves $423. Missouri costs $247 more at that salary and Oklahoma $543 more. Arkansas taxes you as a part-year resident on income earned while you lived there, so plan on an Arkansas return for the year you move, and expect a new withholding certificate if your next state taxes wages.