Arkansas Subtractions From Income
This line is used to report your allowable contribution to a Health Savings Account (HSA). In order to be eligible, a taxpayer must have insurance coverage under a HDHP only. A HDHP will have the following deductions and limitations: (1) for self-only coverage, the minimum deductible is $1,100 and the maximum out of pocket expense is $5,600, and (2) for family coverage, the minimum deductible is $2,200 and the maximum out of pocket expense is $11,200. You can make pre-tax contributions of up to $2,900 each year ($5,800 for families) to cover health care costs. Individuals who reach age 55 by the end of the tax year can increase their annual contribution by $900 for 2008. Maximum contributions allowed to an HSA are reduced by any contributions made to an Archer MSA.
Student Loan Interest Deduction
You may take an adjustment for interest paid on student loans if all of the following apply:
1. You paid interest in 2008 on a qualified student loan.
2. Your filing status is any status other than married filing separately on different returns (Status 5).
3. Your AGI is less than: $70,000 if filing Status 1, 3, or 6; $145,000 if filing Status 2 or 4. Status 4 filers, please note that this is a combined income amount.
4. You are not claimed as a dependent on another taxpayer’s 2008 tax return.
Contributions to Intergenerational Trust
You may take an adjustment from income for contributions made to a long-term intergenerational trust. This is a trust established for an individual under the age of 18 in order to provide funds for the minor’s retirement. The trustee must be a resident of Arkansas and cannot distribute any of the trust funds to the beneficiary until the beneficiary reaches the age of 55. Contributions are limited to $4,000 per year.
If you paid alimony or separate maintenance as the result of a court order, enter the total amount in the space provided.
Support for Permanently Disabled Child
If you have a permanently disabled individual who qualifies for the deduction you can take an adjustment from income of $500 for each permanently disabled individual.
Organ Donor Deduction
If you paid unreimbursed expenses for yourself or one of your dependents related to the donation of an organ (part of a liver, pancreas, kidney, intestine, lung or bone marrow) you may take an income tax deduction of up to $10,000. The deduction must be claimed for the taxable year in which the transplantation of the organ occurs. Allowable expenses include travel, lodging, medical expenses and lost wages that are related to the organ donation. An individual may claim the deduction only once in his or her lifetime. This deduction does not apply to organs harvested from a deceased donor.
Tax Deferred Tuition Savings Program
If you made contributions to a tuition savings account established under the Arkansas Tax Deferred Tuition Savings Program enter the amount here. Contributions to plans established in states other than Arkansas are not deductible. The deductible contribution cannot exceed $5,000 per taxpayer per tax year. Qualified withdrawals from a tuition savings account established under the Arkansas Tax Deferred Tuition Savings Program or a tax-deferred tuition savings program established by another state will be exempt from Arkansas income tax with respect to the designated beneficiary’s income.
Border City Exemption
To claim the Texarkana exemption, you must file a return and report all Arkansas income you received during the year. Enter the exempt income on Line 23. Attach Form AR-TX.
Form AR-TX is supplied by your employer.
The Form AR-TX is not required for non wage income such as interest, dividends, Schedule C (sole proprietor), Schedule F (farm), Schedule E (rents, royalties, partnerships, etc.) or retirement. Additional information may be required for verification if an adjustment for these types of income is allowed.
NOTE: Taxpayers who claim this exemption must file using their street address in Texarkana, Arkansas or Texarkana, Texas. If you use a Post Office Box, this exemption will not be allowed.
If you lived within the city limits of Texarkana, Arkansas, you are allowed a full exemption from Arkansas income taxation. Part-year Texarkana residents claim the exemption only on income earned while a resident of Texarkana, Arkansas.
If you lived within the city limits of Texarkana, Texas, you are allowed to deduct the income you earned in the city limits of Texarkana, Arkansas. All other Arkansas income is taxable to you.
Self-Employed Health Insurance Deduction Worksheet
If you are self-employed and had a net profit for the year, you may be able to deduct part of the amount paid for health insurance on behalf of yourself, your spouse, and/or dependents.