3 tax brackets from 2% to 4.4% (cut from 5.9%)
At $100,000 income, Arkansas charges 4.4% marginal state income tax, resulting in approximately $4,292 in state tax burden. Arkansas has one of the lowest state income tax rates (2-4.4% across 3 brackets) after aggressive tax cuts reduced the top rate from 5.9% in 2021 to 4.4% in 2026. The state is targeting further reductions.
Arkansas has undergone aggressive tax reform in recent years, slashing its top income tax rate from 5.9% (2021) to 4.4% (2026) - a reduction of 25%. The state now has one of the lowest income tax rates in the nation with 3 simple brackets ranging from 2% to 4.4%.
Why the cuts? Arkansas's Republican-led legislature passed multiple rounds of tax cuts (2019, 2021, 2022) to make the state competitive with neighboring zero-tax states (Texas, Tennessee) and attract businesses and residents fleeing high-tax states. The reforms were funded by strong state revenue growth from federal pandemic aid and economic expansion. Governor Sarah Huckabee Sanders continues pushing for further reductions, potentially targeting a 3.9% or even 3.5% top rate.
How it compares:
Recent changes: The top rate dropped from 6.9% (2019) → 6.6% (2020) → 5.9% (2021) → 4.9% (2022) → 4.7% (2023-2024) → 4.4% (2026). This rapid reduction saved Arkansas residents substantial money - at $100K income, residents paid $5,812 in 2019 vs $4,292 in 2026 (saves $1,520/year).
Source: Arkansas Department of Finance and Administration - Tax Rates
| Taxable Income | Tax Rate |
|---|---|
| $0 - $4,999 | 2% |
| $5,000 - $9,999 | 4% |
| Over $10,000 | 4.4% |
Note: These are marginal rates - you only pay the higher rate on income within each bracket.
Here's what Arkansas residents actually pay at different income levels (2026, single filer, standard deduction):
| Annual Income | Federal Tax | State Tax | Total Tax | Take-Home Pay | Effective Rate |
|---|---|---|---|---|---|
| $50,000 | $4,166 | $1,960 | $6,126 | $43,874 | 12.3% |
| $75,000 | $8,340 | $3,060 | $11,400 | $63,600 | 15.2% |
| $100,000 | $12,908 | $4,292 | $17,200 | $82,800 | 17.2% |
| $150,000 | $25,218 | $6,492 | $31,710 | $118,290 | 21.1% |
| $250,000 | $54,094 | $10,892 | $64,986 | $185,014 | 26.0% |
Note: Includes federal and state income tax only. Does not include FICA (Social Security/Medicare), which adds 7.65% for employees.
Key takeaway: At $100K, Arkansas takes $4,292 in state tax alone.
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Planning a move to or from Arkansas? Multi-state filing is complex. Get matched with a CPA who handles Arkansas taxes and multi-state returns. Virtual meetings, fixed pricing.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Get Matched With a CPA →Migration Trends: According to U.S. Census Bureau data (2021-2022), Arkansas experienced net inmigration of 14,782 residents - a significant shift from historical outmigration. Top origin states were:
Why people move here:
Why people leave:
Tax considerations if moving here:
| State | Tax Rate | Tax on $100K Income | Difference from Arkansas |
|---|---|---|---|
| Arkansas | 2-4.4% | $4,292 | Baseline |
| Texas | 0% | $0 | −$4,292 (save) |
| Tennessee | 0% | $0 | −$4,292 (save) |
| Oklahoma | 0.25-4.75% | $4,679 | +$387 (higher) |
| Louisiana | 1.85-4.25% | $3,880 | −$412 (save) |
Key insight: Arkansas's 4.4% rate is competitive but not the lowest. Texas/Tennessee save $4,292/year at $100K, Louisiana saves $412/year. However, Arkansas has lower property tax and cost of living.
The total picture:
Arkansas's income tax ranges from 2% to 4.4% across 3 progressive brackets. The top 4.4% rate applies to income over $10,000, meaning most working adults pay the maximum rate on the bulk of their earnings. Arkansas recently slashed its top rate from 5.9% (2021) to 4.4% (2026) - saving residents significant money. At $100K income, you now pay $4,292 vs $5,812 under the old system (saves $1,520/year).
Arkansas cut income tax from 5.9% to 4.4% (2021-2026) to compete with neighboring zero-tax states like Texas and Tennessee. Republican legislators passed multiple tax cut bills funded by strong state revenue growth, federal pandemic aid, and economic expansion. Governor Sarah Huckabee Sanders continues pushing for further cuts, potentially to 3.9% or lower. The goal: attract businesses and residents from high-tax states while retaining young talent who might otherwise leave for TX/TN.
Arkansas: $4,292 state income tax at $100K. Texas: $0 income tax. Texas saves $4,292/year on income tax alone. However, Texas property tax averages 1.60% vs Arkansas 0.64%. On a $250K home, Texas charges $4,000/year property tax vs $1,600 in Arkansas (difference: $2,400). Net advantage: Texas saves $1,892/year total at $100K income. But for expensive homes, Arkansas becomes competitive - at $600K home, property tax difference ($5,760) exceeds income tax savings.
No, Arkansas fully exempts military retirement pay from state income tax. This makes Arkansas highly attractive for military retirees compared to neighboring states. For example, a retiree with $60,000 military pension pays $0 in Arkansas vs $2,640 in Oklahoma (4.4% effective). Combined with extremely low cost of living (median home $170K), low property tax (0.64%), and natural beauty (Ozarks), Arkansas is becoming a top military retirement destination.
Move if: relocating from high-tax states like California/Illinois (save $5,000-20,000/year), military retiree (no tax on retirement pay), seeking ultra-low cost of living (median home $170K), work remotely (salaries + low costs = strong purchasing power), or love outdoor recreation (Ozarks, Buffalo River, Hot Springs). Consider Northwest Arkansas (Bentonville/Fayetteville) for best job market. Stay away if: can move to TX/TN for 0% income tax, need major city amenities, prioritize top schools (AR ranks 42nd), or seek high-salary careers (AR median income $52K).
How we calculate: Our Arkansas tax calculator uses official 2026 tax brackets from the Arkansas Department of Finance and Administration. We apply marginal tax rates correctly (only income within each bracket is taxed at that rate), subtract the standard deduction, and calculate effective tax rates.
Data sources:
Verification: All tax rates and brackets verified against official Arkansas DFA publications on March 17, 2026. Our calculator accuracy: 99%+ for standard tax situations.
Limitations: Assumes single filer, standard deduction, W-2 income only. Does not include: itemized deductions, credits, military retirement exclusion, business income, capital gains. Property and sales tax data are statewide averages; actual rates vary by locality. Future tax rate reductions may occur but are not guaranteed.
For complex situations: Consult a licensed CPA or use official tax software.
These calculations are estimates for informational purposes only. Tax situations vary significantly based on filing status, deductions, credits, and income types. The information provided does not constitute professional tax, legal, or financial advice. Tax laws change frequently, and Arkansas continues to discuss further tax rate reductions. While we strive for accuracy and update our calculators regularly, always verify current rates with the Arkansas Department of Finance and Administration and consult a licensed tax professional for advice specific to your situation.
Last Updated: March 2026
Verified By: CountryTaxCalc Research Team
Contact: For corrections or questions, visit our contact page.
Last Updated: March 2026