Arkansas Withholding: What you need to know

Arkansas law requires withholding of state income taxes from the wages of residents and nonresidents for services performed for Arkansas employers. Nonresidents are subject to the tax only on wages paid for services performed within the state. Special border city exemptions apply for residents of Texarkana, Arkansas, and Texarkana, Texas.
For a Limited Time receive a FREE HR Report on the "Critical HR Recordkeeping”.  This exclusive special report covers hiring records, employment relationships, termination records, litigation issues, electronic information issues, tips for better recordkeeping, and a list of legal requirements.  Download Now
The amount to be withheld may be determined from withholding tables or a computer formula provided by the Department of Finance and Administration.
Taxes must be withheld on “wages,” which include all cash and noncash payments for services performed by an employee. Vacation allowances, sick-leave pay, back pay, supplemental unemployment benefits, retroactive wage increases, and reported tips of more than $20 per month are subject to withholding. Arkansas follows federal rules on the tax treatment of benefits.
Exclusions. Payments for the following services are exempt from withholding:
• Domestic service in a private home, college club, or college fraternity or sorority
• Agricultural labor for an employer that has fewer than four employees
• Service not in the course of the employer's trade or business where compensation is less than $150 per quarter
• Religious service performed by ministers or members of religious orders
Employees. Employers must obtain an exemption certificate, Form AR-4EC or federal Form W-4, from each employee. Employers that use Form W-4 are responsible for modifying the form to state requirements because Arkansas does not allow exemptions for old age, deafness, or blindness. Employees with no federal tax liability in either the current or preceding year are exempt from Arkansas withholding and should file Form AR-4ED ...

>> Read more about Withholding

More on this topic:

State Requirements

National | Alabama | Arizona | Arkansas | California | Colorado | Delaware | District of Columbia | Georgia | Hawaii | Idaho | Illinois | Indiana | Iowa | Kansas | Kentucky | Louisiana | Maine | Maryland | Massachusetts | Michigan | Minnesota | Mississippi | Missouri | Montana | Nebraska | New Jersey | New Mexico | New York | North Carolina | North Dakota | Ohio | Oklahoma | Oregon | Pennsylvania | Rhode Island | South Carolina | Utah | Vermont | Virginia | West Virginia | Wisconsin |

Arkansas Withholding Resources

Withholding Products

Taxation and Withholding Explained Webinar Recording
BLR Webinar: "Taxation and Withholding Explained: Compliance Tips for Multistate Employers""
Employment Taxes in Multiple States Webinar Recording
BLR Webinar: "Employment Taxes in Multiple States: Step-by-Step Calculation and Reporting Strategies""
Payroll Webinar Recording
BLR Webinar: "Payroll: How to Legally Handle Tax Levies and Garnishments""
IRS and ICE Audit Alert Webinar Recording
BLR Webinar: "IRS and ICE Audit Alert: How to Avoid and Manage Payroll and Recordkeeping Scrutiny""
Free Special Reports
Get Your FREE HR Management Special Report. Download Any One Of These FREE Special Reports, Instantly!
Featured Special Report
Claim Your Free Copy of Critical HR Recordkeeping

Record retention is complex and time consuming. However, in addition to complying with various federal and state laws, keeping good, well-organized records can be very helpful in documenting and supporting an organization’s employment actions.
Download Now!

This special report will discuss how you can ensure your records are in good order, and establish a record-retention policy.

Topics covered:
1. Hiring Records
2. Employment Relationships
3. Termination Records
4. Litigation Issues
5. Electronic Information Issues
6. Tips for Better Recordkeeping
7. A List of Legal Requirements

Make sure you have the information you need to know to keep your records in order.