Arkansas to reduce tax rates

Arkansas has enacted legislation to reduce personal income tax rates and decrease the capital gain exclusion amount. Applicable to tax years beginning on or after January 1, 2016, personal income tax rates are as follows for individuals, trusts, and estates with net incomes of $21,000 to $75,000:

• $0 to $4,299: 0.9% (currently 0.9%);
• $4,300 to $8,399: 2.5% (currently 2.5%);
• $8,400 to $12,599: 3.5% (currently 3.5%);
• $12,600 to $20,999: 4.5% (currently 4.5%);
• $21,000 to $35,099: 5%; however, 6% if net income is more than $75,000 (currently 6%)
• $35,100 to $75,000: 6%; however, 6.9% if net income is more than $75,000 (currently 7%).

Also for tax years beginning on or after January 1, 2016, taxpayers with net income of more than $75,000, but not more than $80,000, can deduct a bracket adjustment amount according to the following schedule:

• $75,001 to $76,000: $440;
• $76,001 to $77,000: $340;
• $77,001 to $78,000: $240;
• $78,001 to $79,000: $140;
• $79,001 to $80,000: $40.

The tables will be adjusted annually for inflation.

For the 2015 tax year, the rates are generally the same as for tax years beginning after 2015 (without the bracket adjustment), except that:

• the rates for the highest two brackets are 6% and 7%, respectively (as opposed to 5% and 6%); and
• for individuals with net income of less than $21,000, the rates are 0.9%, 2.4%, 3.4%, and 4.4%. (Act 22 (S.B. 6), Laws 2015, effective February 6, 2015, applicable as noted.)
Arkansas to reduce tax rates

Arkansas has enacted legislation to reduce personal income tax rates and decrease the capital gain exclusion amount. Applicable to tax years beginning on or after January 1, 2016, personal income tax rates are as follows for individuals, trusts, and estates with net incomes of $21,000 to $75,000:
• $0 to $4,299: 0.9% (currently 0.9%);
• $4,300 to $8,399: 2.5% (currently 2.5%);
• $8,400 to $12,599: 3.5% (currently 3.5%);
• $12,600 to $20,999: 4.5% (currently 4.5%);
• $21,000 to $35,099: 5%; however, 6% if net income is more than $75,000 (currently 6%)
• $35,100 to $75,000: 6%; however, 6.9% if net income is more than $75,000 (currently 7%).
Also for tax years beginning on or after January 1, 2016, taxpayers with net income of more than $75,000, but not more than $80,000, can deduct a bracket adjustment amount according to the following schedule:
• $75,001 to $76,000: $440;
• $76,001 to $77,000: $340;
• $77,001 to $78,000: $240;
• $78,001 to $79,000: $140;
• $79,001 to $80,000: $40.
The tables will be adjusted annually for inflation.
For the 2015 tax year, the rates are generally the same as for tax years beginning after 2015 (without the bracket adjustment), except that:
• the rates for the highest two brackets are 6% and 7%, respectively (as opposed to 5% and 6%); and
• for individuals with net income of less than $21,000, the rates are 0.9%, 2.4%, 3.4%, and 4.4%. (Act 22 (S.B. 6), Laws 2015, effective February 6, 2015, applicable as noted.)

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