Tax News Update    Email this document    Print this document  

September 20, 2023
2023-1569

Arkansas lowers personal income and corporate tax rates starting in 2024

On September 15, 2023, Governor Sarah Huckabee Sanders signed into law SB 8, which, effective January 1, 2024, lowers the top personal tax rate from 4.7% to 4.4% and reduces the top corporate tax rate from 5.1% to 4.8% for domestic and foreign corporations.

The law also provides for a non-refundable income tax credit of $150 for individual taxpayers and $300 for married taxpayers for tax year 2023.

Supplemental wages

Effective January 1, 2024, the supplemental rate of withholding on bonuses and other irregular wage payments is reduced from 4.7% to 4.4%. 

Ernst & Young LLP insights

This is the third consecutive year that Arkansas has lowered personal income tax rates. Under SB 549, the top marginal personal income tax rate was lowered from 4.9% to 4.7% retroactive to January 1, 2023. The Arkansas Department of Finance and Administration issued revised income tax withholding instructions effective with wages paid on and after June 1, 2023. (See Tax Alert 2023-1070.)

———————————————

Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (kristie.lowery@ey.com)
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 1996 – 2024, Ernst & Young LLP

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

EY US Tax News Update Master Agreement | EY Privacy Statement