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Arkansas Income Tax Withholding Requirements

Filed under Payroll Taxes. Fact checked on February 4, 2013.

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Employers in Arkansas must conform with these state rules relating to income tax withholding and administration.

General Withholding Requirement: Arkansas income tax must be withheld from all wages paid to resident and nonresident employees for services within the state.

There is a border city exemption for residents of Texarkana, Arkansas, and Texarkana, Texas. The total income earned as a resident of Texarkana, Arkansas, is exempt from Arkansas income tax. Income earned in Texarkana, Arkansas, by a resident of Texarkana, Texas, is exempt from Arkansas income tax. The employer must furnish employees residing within the city limits of Texarkana, Arkansas, with Form AR-4EC (TX), Texarkana Employee's Withholding Exemption Certificate. Texarkana residents must file an Arkansas income tax return along with Form AR-4EC (TX) attached to receive the exemption.

Employee Withholding Exemption Forms: Arkansas Form AR4EC may be completed by each employee, to determine the appropriate level of state income tax to withhold from earnings, or the federal form can be substituted for state purposes. Of course, Federal Form W-4 also must be completed by each employee, to determine the appropriate level of federal income tax to withhold from earnings.

Reciprocal Agreements: None.

Administration:

Department of Finance and Administration
Withholding Tax Branch
Ledbetter Building
1816 W 7th St, Rm 1380
Little Rock, AR 72201
Telephone: 501-682-7290

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