What are the Income Tax Laws in the State of Arkansas
Almost all states in the United States collect personal income taxes from their residents annually by different kinds of taxable incomes including their salaries or wages. A majority of states in the country have adopted the progressive tax system including the state of Arkansas.
The progressive tax system followed by Arkansas is typically a sliding scale for a tax deduction based on income. The system needs that those people who earn over a specific threshold or limit have to pay the maximum tax rate. In other words, Arkansas does not follow a flat tax system where the same tax rate applies to all taxpayers irrespective of how much they are earning.
There are six distinct tax brackets in the state of Arkansas that range in the scale of 1 percent to 7 percent. The system has been designed in the lines of the income system code of the United States and typically embraces a majority of its tax provisions.
Also, the state’s taxpayers who have got retirement account distribution post attaining the age of 59 and a half need not pay tax on their first 6,000 USD from that account. The exemption is also extended to any premature distribution that was made due to the disability or death of the participant.
A pertinent question here would be how to realize whether Arkansas is a state with low-income-tax or high-income-tax? As far as the state of Arkansas is concerned, that is dependent to a large extent on how much money is made by its people and how they make that money.
Tax revenue of Arkansas is not dependent to that extent on income taxes of individuals unlike some other states in America. Income taxes are only one facet of the tax system. Hence, just observing the income tax rates can be misleading.
When states depend on the collection of sales heavily, it can hurt workers with low-income. These taxes tend to take less income tax from people who fall within the high-income category. It is a similar scenario in the state of Arkansas where although low-wage workers have to pay a lower rate of income tax, there is a higher focus on sales taxes. So, even if people in the lower-income group pay less income tax, they still have to pay a high amount towards sales tax.
Deadline for filing an income tax payment in Arkansas
All individuals in Arkansas should submit their tax return and any due taxes within April 15 every year. The deadline is same for federal tax return filing to the Internal Revenue Service. In case April 15th is a weekend or a holiday, the deadline should be extended to the next working day. In case a person cannot file or does not pay their tax within the due date, interest and penalties will be charged.
However, a person can automatically get an extension to the deadline in Arkansas until October 15 the same year if they have filed for a federal extension with the Internal Revenue Service. As soon as an individual is ready to file their taxes in Arkansas, they need to check the relevant box on their state return so that it is known that they have filled up the extension form with the federal.