Arkansas Updates Withholding Methods, Effective Oct. 1

Arkansas’ withholding methods were updated by the state Department of Finance and Administration on Sept. 2 following an income tax cut passed in a legislative special session.

The new withholding formula takes effect Oct. 1. The highest tax rate used decreased to 4.9%, instead of 5.5%, and the tax brackets used were adjusted. The formula’s standard deduction increased to $2,270, from $2,200, but the value of a state allowance was unchanged at $29.

The withholding instructions were updated to decrease the supplemental withholding rate to 4.9%, also effective Oct. 1.

A tax-cut bill (S.B. 1) making changes to ...