May 1, 2023
Arkansas law lowers top marginal personal income tax retroactive to January 1, 2023
On April 10, 2023, Arkansas Governor Sarah Huckabee Sanders signed into law SB 549, which retroactive to January 1, 2023, lowers the top marginal personal income tax rate from 4.9% to 4.7%.
The supplemental rate of withholding is also reduced from 4.9% to 4.7%.
This is the second consecutive year that Arkansas has retroactively lowered the top marginal income tax rate. Under SB.1 (Act 2), enacted on August 11, 2022, the top marginal tax rate was lowered from 5.5% to 4.9% effective retroactive to January 1, 2022. The revised withholding formula reflecting the rate cut was effective for wages paid on and after October 1, 2022. The Department also revised its Withholding Tax, Employer's Instructions. (See EY Tax Alert 2022-1487.) The revised withholding tables and formula, once available, will be posted here.
Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor
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