The credit for taxes paid to another state is automatically calculated in your account when you add a Nonresident return after you have already created resident Arkansas return if you pay taxes on the same income to both Arkansas and another state.
- This credit is available to full-year residents and part-year residents.
- Nonresidents of Arkansas are not allowed this credit.
- The amount withheld on your W2 form for the other state is not the amount of credit you can take.
- This credit cannot exceed the Arkansas income tax on the same income and cannot exceed the total tax you owe Arkansas.
NOTE: The State of Mississippi enacted a special tax that applies exclusively to gambling winnings. This tax is separate and distinct from Mississippi’s income tax. As such, an Arkansas taxpayer cannot claim a credit against their Arkansas income tax liability for payment of the gambling winnings tax to the State of Mississippi.
Arkansas requires a signed copy of the other state tax return you filed before processing your Arkansas return.