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Arkansas uses a five-bracket progressive tax running from 0% up to 3.9% for 2026. The brackets are narrow at the bottom — 0% on your first $5,599, 2% to $11,199, 3% to $15,999, 3.4% to $26,399 — and the top 3.9% rate starts at just $26,400 of taxable income. Because the top bracket hits so early, most middle-class earners are effectively paying 3.9% on the bulk of their income. The state standard deduction is $2,470 single / $4,940 married, notably smaller than the federal one.

A $68,000 single salary works out like this: taxable income after the state deduction is about $65,530. The first $26,400 runs through the 0%/2%/3%/3.4% brackets, and everything above is taxed at 3.9% — about $2,137 total.

Arkansas has been quietly reducing rates: the top rate was 5.9% a few years ago and has fallen in steps to 3.9% for 2026, with the first $5,599 of taxable income sitting in a 0% bracket.

Retirement treatment is mixed: Social Security is exempt, and military retirement pay is fully exempt, but private pensions and 401(k)/IRA distributions are taxed at standard rates. Property tax runs 0.93% average, while combined sales tax is high at 9.44% — third-highest in the country — driven by a 6.5% state rate plus substantial local add-ons.

Filing in Arkansas: full-year residents file Form AR1000F with the Arkansas Department of Finance and Administration by April 15. Arkansas offers free online filing, and most payroll systems use the state wage tables for withholding.