Arkansas sets income tax schedules for people and corporations

Individuals, trusts, and estates would calculate income tax using the listed rate tables. The rules cover residents, individuals, trusts, and estates, with different tables based on net income. Income of $94,700 or less uses rates ranging from 0% to 3.7%. Income above $94,700 uses 2% on the first $4,700 and 3.7% on amounts above that threshold. Taxpayers with income from $94,701 through $97,600 may subtract a bracket adjustment ranging from $290 to $10. The schedules apply to tax years beginning on or after January 1, 2026.

Domestic corporations would pay income tax using a four-level rate schedule. The schedule covers corporations organized under Arkansas law and applies to their entire net income as defined by state law. The rates are 1% on the first $3,000, 2% on the next $3,000, and 3% on the next $5,000. Income above $11,000 is taxed at 4.1%. The schedule applies to tax years beginning on or after January 1, 2027.

Foreign corporations doing business in Arkansas would pay income tax using a four-level rate schedule. The schedule covers foreign corporations doing business in Arkansas and applies to the Arkansas-taxable proportion of their net income. The rates are 1% on the first $3,000, 2% on the next $3,000, and 3% on the next $5,000. Income above $11,000 is taxed at 4.1%. The schedule applies to tax years beginning on or after January 1, 2027.