Summary of Tax Cuts

2015 Middle Class Income Tax Cut

Act 22 of 2015 reduced taxes for approximately 688,000 Middle Class taxpayers by cutting the tax rates for those making between $21,000 and $75,000.  The total tax reduction for middle class taxpayers amounts to over $100M annually. This change was effective January 1, 2016. 

For tax year 2016 and after, taxpayers having taxable income between $21,000 and $75,000 will pay tax on that portion of their income between $21,000 and $35,099 at the rate of 5% rather than the 6% rate in effect for 2014. That portion of their income between $35,100 and $75,000 will be taxed at the rate of 6% rather than the 7% rate previously applicable.

In Arkansas, two income households can file separately on the same return. This means, in a two income household with both earners falling within the range of the middle class tax cut, both would receive the benefit.

Year FY16 FY17 FY18 FY19 FY20 Cumulative
Middle Class Tax Relief -33.7M -102.1M -$107.4M -$112.8M -$118.4M -$474.4M

Number of Arkansas Taxpayers Benefiting: 688,000

Impact to Taxpayers:

$35,000 Net Taxable Income
Tax Savings -- $110.00

$50,000 Net Taxable Income
Tax Savings -- $246.00

$75,000 Net Taxable Income
Tax Savings -- $470.00

©2018 State of Arkansas. All Rights Reserved.