06/28/2024
Arkansas Governor Signs Legislation Reducing Income Taxes, Increasing Homestead Property Tax Credit
By James W. O'Brien, Esq.
Arkansas Governor Sarah Huckabee Sanders has signed legislation reducing the income tax rates applicable to corporations, individuals, trusts, and estates, and increasing the homestead property tax credit amount. L. 2024, S1 (2nd Extra. Sess.) (Act 1), effective 06/19/2024; L. 2024, S3 (2nd Extra. Sess.) (Act 5), effective 06/19/2024
Rates. The state's top individual income tax rate is reduced from 4.4% to 3.9%, and the state's top corporate income tax rate is reduced from 4.8% to 4.3%, retroactive to tax years beginning on or after January 1, 2024. The top individual income tax rate of 3.9% applies to every resident, individual, trust, or estate having net income of less than or equal to $89,600 and to their income of $25,000 to $89,600. The top rate also applies to every resident, individual, trust, or estate having net income greater than $89,600 and to their income of $4,501 and above. The top corporate income tax rate of 4.3% applies to the net income of corporations exceeding $11,000.
Individual income tax bracket adjustments. The legislation recalculates the bracket adjustments based on the reduced tax rates. For tax year 2024, every resident, individual, trust, or estate having net taxable income greater than or equal to $89,601, but less than $92,701, will reduce their income tax due by the appropriate bracket adjustment amount.
Homestead credit. Effective for assessment years beginning on or after January 1, 2024, the homestead property tax credit is increased from $425 to $500.
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Document Title:Arkansas Governor Signs Legislation Reducing Income Taxes, Increasing Homestead Property Tax Credit (06/27/2024)
Checkpoint Source:State Tax Updates
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