LITTLE ROCK – Numerous state laws will take effect in 2024, including tax reductions that will save Arkansas families and businesses about $250 million a year.
During a September special session the legislature approved tax cuts that will benefit Arkansans in two ways. An income tax reduction will lower the top rate from 4.7 to 4.4 percent for individuals. Also, the top rate for corporate taxes will go down from 5.1 to 4.8 percent.
The tax relief measure includes a one-time credit of $150 for all taxpayers whose incomes was below $89,600 in 2023. That means Arkansas taxpayers will benefit from the credit in the next couple of months, when they file their income taxes for 2023.
For taxpayers with incomes between $89,601 and $103,600 the amount of the credit gradually decreases. People whose income is $103,601 and above will not get a credit.
In all, about 1.1 million people in Arkansas will save $150 million a year because of the tax reductions enacted by the legislation earlier this year. Also, about 7,500 businesses will save $34.5 million a year.
The $150 credits will save individuals $156.3 million on their 2023 taxes. However, they will not be in effect in future years.
Those cuts were not the only tax relief enacted by the legislature in 2023. During the regular session at the beginning of the year, legislators approved Senate Bill 549 to lower income taxes for individuals, trusts, estates and corporations.
Those tax cuts benefited 1.1 million individual taxpayers whose incomes are above $24,300 a year. The Senate bill became Act 532 of 2023.
