• In addition to federal income taxes, residents of the state of Arkansas are required to file state income tax returns. Returns must be filed by April 15 of each year to meet the deadline for filing without penalty. Filing two income tax returns can be confusing for many, however; asking the right questions of either the state office or a licensed tax professional can help Arkansas taxpayers through the process.
  
  

Who is Required to File?

• As of 2010, Arkansas state law uses both the filing status and gross annual income to determine which residents are required to file an income tax return. Indivdiuals who are filing as single with a gross income of at least $7,800 are required to file; a head of household taxpayer with an income of at least $12,100 must also file. For married couples, those filing jointly with earnings of at least $15,500 and those filing separately with an income of at least $3,999 are required to file a return. Qualifying widows with a dependent child must file if their income is over $15,500. Non-residents or part-year residents who received an income from a business in Arkansas must file Arkansas Form AR1000NR regardless of the income amount.
  
  

Is Any Income Non-Taxable?

• The state of Arkansas allows specific types of income to be considered non-taxable regardless of the gross amount. Parents receiving child support payments do not have to pay income tax on the funds; in addition, those receiving welfare benefits or unemployment compensation do not have to file a return. If a person receives life insurance proceeds in a lump sum, those funds are non-taxable. Other non-taxable incomes include tax exempt interest, accident and health insurance proceeds, gifts and inheritances, cash rebates received from purchases, Social Security and Railroad Retirement benefits, and scholarships, grants or fellowships received for educational expenses.
  
  

What Are the Tax Rates?

• As of 2010, under Arkansas state law, six income brackets determine the rates that taxpayers are charged on income taxes. For incomes between $0 and $3,700 the tax rate is one percent. Incomes between $3,701 and $7,400 are taxed at a rate of 2.5 percent. Taxpayers earning $7,401 and $11,100 are pay 3.5 percent in taxes. Incomes between $11,101 and $18,600 are taxed at 4.5 percent. Individuals earning between $18,601 and $31,000 are taxed at 6 percent. The finale tax rate is seven percent for all incomes over $31,000.