Arkansas Tax

For Arkansas residents, you specify the employee's status and exemptions.

Deltek Modification Date - 12/19/14

Enter the following information on the Withholding grid on the Payroll tab of the Employees hub:

Field	Description
Status	Enter the marital status claimed by the employee on the Arkansas Employee’s Withholding Exemption Certificate, Form AR-4EC: 1: Single 2: Married, claiming self only 3: Married, claiming self and spouse 4: Claiming no personal exemption If the employee did not submit Form AR-4EC, use the marital status claimed by the employee for federal income tax purposed on federal Form W-4.
Exemptions	Enter the number of dependents claimed by the employee on Form AR-4EC. If the employee did not submit Form AR-4EC, enter the number of dependents claimed for federal income tax purposes on federal Form W-4.
Other Exemptions	Arkansas’s tax calculations do not use the Other Exemptions field.

Supplemental Wages

Supplemental (bonus run) wages are calculated at a flat rate of 6.9%.

Automatically Calculated Variables

DPS computes the following variables, based on the exemptions claimed by the employee:

Standard Deduction

The Standard Deduction is a fixed amount deduction applied to all employees. The amount of the deduction is $2,200.

Credit

The Credit is based on the number of exemptions for dependents claimed by the employee. The number of exemptions for dependents is entered in the first Exemptions field.

To determine the amount of the credit, multiply the number of exemptions by $26.00.

How DPS Calculates Tax

To calculate an employee's Arkansas State tax, DPS does the following:

1. Multiplies the employee's gross pay per pay period by the number of pay periods in a year to determine annualized gross wages.
2. Subtracts the employee's Standard Deduction and any 401(k) and 125/Cafeteria plan contributions from the employee's gross wages for the pay period to determine taxable income.
3. Calculates the annual income tax using Tax Calculation Method 1.
4. Subtracts the Credit amount (if applicable) from the annual income tax to determine net annual income tax.
5. Divides the net annual income tax by the number of pay periods in a year to determine the amount to be withheld for the pay period.