Updated October 8, 2026. Quick answer: Arkansas’s 2026 withholding formula from the Department of Finance and Administration taxes net taxable income at 0% to $5,599, 2% to $11,199, 3% to $15,999, 3.4% to $26,399 and 3.7% above that, after a $2,470 standard deduction. The Department’s 2025 return instructions give 3.9% as the marginal rate for 2025.
The 2026 Arkansas schedule
| Net taxable income | Rate |
|---|---|
| $0 to $5,599 | 0% |
| $5,600 to $11,199 | 2% |
| $11,200 to $15,999 | 3% |
| $16,000 to $26,399 | 3.4% |
| $26,400 and over | 3.7% |
The formula is marked “Effective 01/01/2026”. It first says to subtract the standard deduction to reach net taxable income, then applies a rate and a subtraction adjustment to each band, for example $367.16 in the 3.7% band that starts at $26,400. The Department’s 2025 instructions say “Marginal Income Tax rates for 2025 are 3.9%”.
Deduction and credit
| Item | Amount |
|---|---|
| Standard deduction | $2,470 |
| Personal tax credit per exemption | $29.00 |
The formula tells employers to “Subtract the Standard Deduction of $ 2,470” and to credit “multiplying the number of exemptions listed on the employee’s AR4EC by $29.00”. The credit reduces tax; it is not a deduction. The withholding formula prints no separate joint standard deduction, but the 2025 return instructions list a $4,940 standard deduction for married filing jointly.
A worked example
As a computed example (an illustration, not a source figure), take $50,000 of Arkansas taxable income. For $50,000 of net taxable income, which sits in the 3.7% band, the formula gives $1,482.84 (computed): the rate times the income minus the $367.16 adjustment. The Department looks up incomes under $100,001 in a table by $50 ranges, so its printed figure may differ by a few cents.
What this page does not say
The 3.7% rate for 2026 rests on the withholding formula alone. No Arkansas statute text or Department rate announcement was read for this page. The formula breaks the 3.7% band into smaller rows between $94,701 and $97,600 to smooth the transition, which this page does not reproduce.
Common mistakes
- Using 3.9% on a 2026 return. That is the 2025 marginal rate.
- Treating the $29 exemption credit as a deduction from income.
- Applying the rate to gross wages instead of net taxable income after the $2,470 deduction.
Related: how Arkansas taxes retirement income, whether Arkansas taxes pensions, how Arkansas taxes capital gains, and the federal 2026 tax brackets.
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Answer againSources
- Arkansas DFA, Withholding Tax Formula Method (tax year 2026, effective 01/01/2026): https://www.dfa.arkansas.gov/wp-content/uploads/Withholding-Tax-Formula.pdf
- Arkansas DFA, 2025 AR1000F and AR1000NR Instructions: https://www.dfa.arkansas.gov/wp-content/uploads/2025_AR1000F_and_AR1000NR_Instructions.pdf
- Arkansas Department of Finance and Administration (where later updates appear; no figure on this page comes from it): https://www.dfa.arkansas.gov/
Sources: the primary documents linked above, read on October 8, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.