TAXES 20-17, Arkansas State Income Tax Withholding

Published: May 13, 2020
Effective: Pay Period 05, 2020

Summary

The income tax withholding formula for the State of Arkansas includes the following changes:

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:

In the event that the employee does not file a State withholding exemption certificate, then zero exemptions (0) will be used as the basis for withholding.

Withholding Formula (Effective Pay Period 05, 2020)

  1. Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
  2. Subtract the nontaxable biweekly Federal Employees 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 (e.g., 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 $87,001, truncate (shorten) the annual net taxable income to the nearest $100 and then add $50. If the annual net taxable income is $87,001 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 adjustment 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 $4,600

    0%

    $4,600 but not over $9,100

    2.00% minus $91.98

    $9,100 but not over $13,700

    3.00% minus $182.97

    $13,700 but not over $22,600

    3.40% minus $237.77

    $22,600 but not over $37,900

    5.00% minus $421.46

    $37,900 but not over $80,801

    5.90% minus $762.55

    $80,801 but not over $81,801

    6.60% minus $1,243.40

    $81,801 but not over $82,801

    6.60% minus $1,143.40

    $82,801 but not over $84,101

    6.60% minus $1,043.40

    $84,101 but not over $85,201

    6.60% minus $943.40

    $85,201 but not over $86,201

    6.60% minus $843.40

    Over $86,201

    6.60% minus $803.40
  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 $26.00 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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