LITTLE ROCK, Ark. — Gov. Sarah Huckabee Sanders officially signed Arkansas's newest round of tax cuts last week, bringing significant changes to rates for Arkansans. With that signature come some pieces you'll want to understand.
"We get several calls on that still," Latasha McKinney said. "I'm looking forward to the calls about this credit."
We went to those who work with taxes constantly at Liberty Tax in Little Rock. McKinney said the first thing you'll want to pay attention to is your income tax bracket, as your rate may have changed.
"Cut the top individual income tax from 4.7 to 4.4%," McKinney said. "Then the corporate income tax rate from 5.1 to 4.8%."
That 4.4% is for anyone making anywhere from $24,300 to $87,000. If you fall below that range, your rate progressively lowers to zero.
Another vital piece to pay attention to is the income tax credits, which can be up to $150 for individuals and $300 for those who file jointly.
However, don't expect to see that money in your pocket. McKinney said the way she reads the law, the credit should only go to taxes you owe the state.
"All these payments are not going to go out; it's going to go into play on paper and in your return," McKinney said. "You're truly not going to see $150."
The $150 credit starts for those making anywhere from $89,600 a year all the way down to $1. If you make more than that, the tax credit gradually decreases.
But what about those who don't owe any state income tax? We asked the governor's office for a definitive answer and are waiting to hear back.
The text of Act 6, the signed tax cuts bill, states that taxpayers can't claim more than what they owe. If you owe $0, you get $0.
McKinney said other factors could also impact your credit.
"If I had a taxpayer come in right now, it's like, 'OK, am I gonna get the credit?'" McKinney said. "I can't say, 'I don't know your income for the year. I don't know what your state situation is on the state side.'"
Thanks to an emergency clause in the bill, this is immediately law. The tax credits are retroactive to January 1, 2023, while the new tax rates go into effect next January.