Arkansas Lowers 2024 Income Tax Rates Again

At A Glance

On June 19, 2024, Arkansas Governor Sarah Huckabee Sanders signed Senate Bill (S.B.) 1 into law, reducing the state’s personal income tax rate for the top two tax brackets from 4.4% to 3.9%, retroactive to the beginning of 2024.

Summary

On June 19, 2024, Arkansas Governor Sarah Huckabee Sanders signed into law S.B.1, retroactively lowering from 4.4% to 3.9% the state’s personal income tax rate for the top two tax brackets and supplemental withholding rate on bonuses and other irregular wage payments.

Next Steps

Paylocity will update affected 2024 Arkansas withholding rates to 3.9% per this legislation. The reduction will not require any adjustments of withholding amounts in payroll, as the state will refund individuals for any excess tax collected as part of their personal income tax filing for the 2024 tax year.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor.