The state of Arkansas has made the following tax law changes for tax year 2021:
- Multiple Direct Deposit (Act 774 of 2019) - Beginning tax year 2019, Arkansas allows up to (2) bank accounts for direct deposit of taxpayer’s refund.
- Achieving a Better Life Experience Program (ABLE)- Contributions to an established account is deductible up to $5,000 per taxpayer per tax year.
- Limitation for Charitable Contributions- Adjusted gross income limitation for cash contributions increased to 60%
- Tax Competitiveness and Relief (Act 182 of 2019) - Marginal income tax rates have been amended and the top rate will be reduced to 5.9% beginning in 2021
- Unemployment Compensation Benefits are exempt from Income Tax (Act 154 of 2021) - For tax years 2020 and 2021, unemployment compensation is not taxable
- Paisley's Law (Act 935 of 2021) - Established a new tax credit of $500 for families that undergo a stillborn child.
- Amended Teacher’s Qualified Classroom Expenses (Act 971 of 2021) - Increases the qualified expenses a teacher can claim from $250 to $500.
You can read more about the changes to Arkansas Tax Law here.