Crossing a state line into or out of Arkansas

Arkansas taxes its residents on income earned anywhere, and taxes non-residents on work done inside it. Which return you file depends on which direction you commute.

Arkansas borders 6 states. They fall into 2 different situations, and which one applies decides whether you file one return or two.

Where you file a nonresident return and claim a credit

Arkansas has no agreement with Louisiana, Mississippi, Missouri and Oklahoma. Work in one of these and you file a nonresident return there, report the same income again to Arkansas, and claim a credit for what you already paid. The credit is capped at your Arkansas liability, so you are not taxed twice, the combined bill lands at roughly the higher of the two rates. On $70,000, Missouri costs the most at $3,190 and Louisiana the least at $2,653, $537 between them.

Work state	Its tax	Arkansas after credit	Total	Rate that governs
Louisiana	$1,475	$1,178	$2,653	Arkansas
Mississippi	$2,800	$0	$2,800	Mississippi
Missouri	$3,190	$0	$3,190	Missouri
Oklahoma	$3,115	$0	$3,115	Oklahoma

Where the work state takes nothing

Tennessee and Texas levy no personal income tax, so there is no return to file there and no credit to claim. But Arkansas still taxes the wages as a resident. The catch is withholding: an employer in Tennessee or Texas has no state income tax to withhold, so nothing is taken out for Arkansas either. The liability is real and nothing is being set aside against it, which usually means Arkansas estimated payments.

What Arkansas itself takes across a salary range

A single filer, taking the standard deduction. This is the figure every arrangement above is measured against, the tax Arkansas charges a resident, whether the work happened inside the state or over a line:

Wages	Arkansas tax	Effective rate
$45,000	$1,678	3.73%
$70,000	$2,653	3.79%
$120,000	$4,603	3.84%

Coming the other way: living in a no-income-tax state, working in Arkansas

Tennessee and Texas border Arkansas and levy no personal income tax of their own. A resident of Tennessee or Texas who works in Arkansas has the simplest arrangement on this page and the least room to improve it: Arkansas taxes the wages earned inside it, $2,653 on $70,000, there is no home-state return, and so there is nothing to claim a credit against. Living across a border that charges nothing does not reduce the Arkansas bill by a cent.

Reciprocity cannot help either, even where Arkansas has agreements: reciprocity shifts the income to the home state's return, and a state with no income tax has no return to shift it to.

What Arkansas charges as your home state

Arkansas taxes income on 3 graduated brackets for 2026, from 2% up to 3.9%. Because wages stacks on top of any other income, a second source can push part of it into the next bracket.

State income tax on wages only, 2026 rates. Not tax advice, what this does and doesn't cover.