W-4 Form: Arkansas

Working and earning a wage means many things… responsibility, growing up, having money to spend, and of course, paying income taxes. In the state of Arkansas, regardless of where the individual actually lives, if a person is earning an income they must pay state income taxes, in addition to federal income taxes. Which brings up a valid question: how much should be withheld from each person’s income for state income taxes? The answer: there is a very simple form to help each employer determine that.

In addition to the federal income tax withholding form, W4, each employee needs to fill out an Arkansas State income tax withholding form, AR4EC. This form has essentially the same information on it, but makes sure you have the correct notations for looking up how much needs to be withheld from each paycheck. It is generally acceptable to substitute the federal W-4 form in place of an Arkansas State AR4EC form, but it is recommended to have both on file.

Please take note! If no income tax withholding form is filled out, taxes must be withheld at the highest level possible – single, no exemptions – even if the employee is known to be married. To prevent things like this from happening, I cannot stress the importance of having each employee file income tax withholding forms AR4EC as well as a federal Form W-4 enough, so please make their completion a priority.

One more thing to keep in mind is that in the state of Arkansas, there is a location-specific instance when the employee may be exempt from paying state-level income tax, and that is: when the employee is a resident of either Texarkana, AR, or Texarkana, TX, (“border cities”) the total income earned as a resident of Texarkana, AR, is exempt from Arkansas state income tax, and if a resident of Texarkana, TX, earns income in Texarkana, AR, they too are exempt from paying Arkansas state income tax, because all of these people are under the “umbrella” of Texas state income laws – and Texas does not charge a state-level income tax. Residents of Texarkana, AR, still have to file an Arkansas state income tax return, but the employer should provide a form AR-4EC (TX) to attach to the tax return. Only when all the appropriate forms are filed, can the resident receive this exemption.

The Arkansas W-4 Form is currently available.