Start For Free

Fast, Secure, and Always Accurate!

Back to List

Category: Arkansas

Arkansas Credit for Taxes Paid to Another State or Country

If you are an Arkansas resident and included income on your Arkansas Return that was also taxed by another state or country, you may claim a credit for the income tax portion of taxes paid to the other state or country on that income.

The income tax you withheld from your wages by another state is NOT the amount of tax you owed to the other state. For that reason, YOU MUST ATTACH TO YOUR ARKANSAS RETURN A SIGNED COPY OF THE TAX RETURN(S) YOU FILED WITH THE OTHER STATE(S). Enter the amount of net income tax liability to the other state(s). Note: This credit cannot exceed the Arkansas income tax on the same income and cannot exceed the total tax you owe Arkansas.

Nonresidents cannot claim this credit on their Arkansas return. Part year residents will not be allowed this credit unless they continued to have taxable income from another state and the other state income is included as taxable income in Column C of Form AR1000NR.

Note: The State of Mississippi enacted a special tax that applies exclusively to gambling winnings. This tax is separate and distinct from Mississippi's income tax. As such, an Arkansas taxpayer cannot claim a credit against his/her Arkansas income tax liability for payment of the gambling winnings tax to the State of Mississippi.

Note: Within your Arkansas return for TaxSlayer, we will automatically calculate this credit for your Arkansas Resident return when you add the other state Nonresident return to your account. If the other state return is a Part-Year Resident return, you must enter the information requested.