TAXES 18-47, Arkansas State Income Tax Withholding | National Finance Center

TAXES 18-47, Arkansas State Income Tax Withholding

Published: March 21, 2018
Effective: Pay Period 13, 2015

Summary

This tax bulletin is being updated to remove the number of pay periods in steps 4, 10 and 12 and replace with the phrase "number of pay dates in the tax year," thereby preventing any confusion in future years. All other information in this bulletin remains the same.

No action on the part of the employee or the personnel office is necessary.

Tax Formula

State Abbreviation:

AR

State Tax Withholding State Code:

05

Acceptable Exemption Form:

AR4EC or W-4

Basis for Withholding:

Based on State taxable wages

Acceptable Exemption Data:

S/M/N/H/0, Number of Allowances

TSP Deferred:

Yes

Special Coding:

Determine the Total Number of Allowances Claimed field as follows:

First Position - S = Single; M = Married, Claiming Both Spouses; N = Married, Claiming Self Only; H = Head of Household; 0 (zero), No Personal Exemption or Dependents Claimed.

Second and Third Positions - Enter the number of exemptions claimed for dependents. If less than 10, precede with a 0 (zero). If no dependents are claimed, enter 00 in the second and third positions.

Additional Information:

None

Withholding Formula (Effective Pay Period 13, 2015)

  1. Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
  2. Subtract the nontaxable biweekly Federal Health Benefits Plan payment(s) (includes dental and vision insurance program and Flexible Spending Account - health care and dependent care deductions) from the amount computed in step 1.
  3. Add the taxable biweekly fringe benefits (i.e., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
  4. Multiply the adjusted gross biweekly wages by the number of pay dates in the tax year to obtain the gross annual wages.
  5. Subtract the Standard Deduction of $2,200 from annualized gross pay in step 4 to determine annual net taxable income.
  6. If the annual net taxable income is less than $50,000, truncate (shorten) the annual net taxable income to the nearest $100 and then add $50. If the annual net taxable income is $50,000 or more, there is no adjustment to the annual net taxable income amount. For example, if the annual net taxable income is $23,324, truncate to $23,300 and add $50. The amount to be used in calculating the annual gross tax amount is $23,350.
  7. Apply the tax rates below to the annual net taxable income and subtract the Minus Adjustments amount. Round the result to the nearest whole dollar. This is the annual gross tax amount.

    Net Taxable Income

    Amount of Tax

    $0 but not over $4,300

    0.90%

    $4,300 but not over $8,400

    2.40% minus $64.49

    $8,400 but not over $12,600

    3.40% minus $148.48

    $12,600 but not over $21,000

    4.40% minus $274.47

    $21,000 but not over $35,100

    5.90% minus $589.45

    Over $35,100

    6.90% minus $940.44

     

  8. Determine the number of personal exemptions by applying the following guidelines:

    If the Employee Is Claiming Status As:

    Then the Personal Exemption Should Be:

    Single - Personal Exemption Code S

    1

    Married - Personal Exemption Code M

    2

    Married - Personal Exemption Code N

    1

    Head of Household - Personal Exemption Code H

    2

    Zero - Personal Exemption Code 0 (zero)

    0

     

  9. Add the number of dependent exemptions claimed to the personal exemption(s) from the result in step 8 to compute the total withholding exemptions.
  10. Multiply the total number of withholding exemptions by the number of pay dates in the tax year to determine the personal tax credit.
  11. Subtract the personal tax credit from the annual gross tax in step 7 to determine the annual net tax.
  12. Divide the annual Arkansas income tax withholding determined by the number of pay dates in the tax year to obtain the biweekly Arkansas income tax withholding.

Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) homepage. Select the Publications tab and select U.S. Income Tax Formulas from the Publications menu to launch the tax map. Select the desired State from the map provided for the formula.

Previous Tax Bulletin

Inquiries

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