Revised Arkansas Withholding Tables Effective October 1
Effective for wages paid on or after October 1, 2022, the Arkansas Division of Taxation (ADOT) has issued updated withholding tables, withholding formula, withholding tables for low income wage earners, and withholding instructions for employers. The withholding instructions explain the requirements for withholding, depositing, reporting, paying, and correcting withholding taxes.
Supplemental Wage Tax Rate Decrease
Also effective October 1, 2022, the supplemental wage tax rate will be reduced to 4.9% from 5.5%. Supplemental wages are discussed on page 4 of the revised withholding instructions. If bonuses or commissions are paid at the same time as regular wages, the state income tax withheld must be determined by deducting 4.9% of the bonus or commission. According to the ADOT, this could lead to over withholding in some cases. The over withholding cannot be recovered until the employee files an Arkansas personal income tax return.
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Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for the APA.