26-51-201. Individuals, trusts, and estates — Definition.

26-51-201. Individuals, trusts, and estates — Definition. (a) For tax years beginning on and after January 1, 2014, a tax is imposed upon, and with respect to, the entire income of every resident, individual, trust, or estate. The tax shall be levied, collected, and paid annually upon the entire net income as defined and computed in this chapter at the following rates, giving effect to the tax credits provided hereafter, in the manner set forth: (1) On the first four thousand two hundred ninety-nine dollars ($4,299) of net income or any part thereof, nine-tenths percent (0.9%); (2) On the next four thousand one hundred dollars ($4,100) of net income or any part thereof, two and five-tenths percent (2.5%); (3) On the next four thousand two hundred dollars ($4,200) of net income or any part thereof, three and five-tenths percent (3.5%); (4) On the next eight thousand four hundred dollars ($8,400) of net income or any part thereof, four and five-tenths percent (4.5%); (5) On the next fourteen thousand one hundred dollars ($14,100) of net income or any part thereof, six percent (6%); (6) On net income of thirty-five thousand one hundred dollars ($35,100) and above, seven percent (7%); (7) Every resident, individual, trust, or estate having net income greater than or equal to twenty-two thousand two hundred dollars ($22,200), but less than or equal to seventy-nine thousand three hundred dollars ($79,300), shall determine the amount of income tax due under this subsection in accordance with the table set forth below: From Less Than or Equal To Rate $0 $4,499 0.75% $4,500 $8,899 2.5% $8,900 $13,399 3.5% $13,400 $22,199 4.5% $22,200 $37,199 5% $37,200 $79,300 5.9% Click to view table. (8) Every resident, individual, trust, or estate having net income of less than twenty-two thousand two hundred dollars ($22,200) shall determine the amount of income tax due under this subsection in accordance with the table set forth below: From Less Than or Equal To Rate $0 $4,499 0% $4,500 $8,899 2% $8,900 $13,399 3% $13,400 $22,199 3.4% Click to view table. (9)(A) For the tax year beginning January 1, 2020, every resident, individual, trust, or estate having net income of more than seventy-nine thousand three hundred dollars ($79,300) shall determine the amount of income tax due under this subsection in accordance with the table set forth below: From Less Than or Equal To Rate $0 $4,000 2% $4,001 $8,000 4% $8,001 $79,300 5.9% $79,301 and above 6.6% Click to view table. (B) For tax years beginning on and after January 1, 2021, every resident, individual, trust, or estate having net income of more than seventy-nine thousand three hundred dollars ($79,300) shall determine the amount of income tax due under this subsection in accordance with the table set forth below: From Less Than or Equal To Rate $0 $4,000 2% $4,001 $8,000 4% $8,001 and above 5.9% Click to view table. (10) Every resident, individual, trust, or estate having net income of more than seventy-nine thousand three hundred dollars ($79,300), but not more than eighty-four thousand six hundred dollars ($84,600), shall reduce the amount of income tax due as determined under subdivision (a)(9) of this section by deducting a bracket adjustment amount in accordance with the table set forth below: From Less Than or Equal To Bracket Adjustment Amount $79,301 $80,300 $440 $80,301 $81,300 $340 $81,301 $82,500 $240 $82,501 $83,600 $140 $83,601 $84,600 $40 $84,601 and above $0 Click to view table. (11) The tables set forth in subdivisions (a)(1)-(10) of this section shall be adjusted annually in accordance with the method set forth in subsection (d) of this section. (b) However, no state income tax shall be due this state from a trust or estate created by a nonresident donor, trustor, or settlor, or by a nonresident testator even though administered by a resident trustee or personal representative except on income derived from: (1) Lands situated in this state, including gains from any sale thereof; (2) Any interest in lands situated in this state, including, without limitation, chattels real, including gains from any sale thereof; (3) Tangible personal property located in Arkansas, including gains from any sale thereof; and (4) Unincorporated businesses domiciled in Arkansas. (c) No income tax shall be due the State of Arkansas from a nonresident beneficiary on income received from a trust being administered by a resident trustee except on income derived by the trust from: (1) Lands situated in this state, including gains from any sale thereof; (2) Any interest in lands situated in this state, including, without limitation, chattels real, including gains from any sale thereof; (3) Tangible personal property located in Arkansas, including gains from any sale thereof; and (4) Unincorporated businesses domiciled in Arkansas. (d)(1) The Secretary of the Department of Finance and Administration shall prescribe annually a table which shall apply in lieu of the table contained in subsection (a) of this section with respect to each succeeding taxable year. The secretary shall increase the minimum and maximum dollar amounts for each rate bracket, rounding to the nearest one hundred dollars ($100), for which a tax is imposed under the table by the cost-of-living adjustment for each calendar year and by not changing the rate applicable to any rate bracket as adjusted. (2) For purposes of subdivision (d)(1) of this section, the cost-of-living adjustment for a calendar year is the percentage, if any, by which the CPI for the current calendar year exceeds the CPI for the preceding calendar year, not to exceed three percent (3%). The CPI for any calendar year is the average of the Consumer Price Index as of the close of the twelve-month period ending on August 31 of such calendar year. “Consumer Price Index” means the last Consumer Price Index for All Urban Consumers published by the United States Department of Labor. (3) The new tables, as adjusted annually, shall be used by the secretary in preparing the income tax withholding tables pursuant to § 26-51-907. (e)(1) Title 26 U.S.C. §§ 671 — 679, as in effect on January 1, 2019, are adopted for purposes of determining whether the grantor or another person shall be treated as the owner of a portion of a trust for Arkansas income tax purposes. (2) A grantor or other person described in 26 U.S.C. §§ 671 — 679, as in effect on January 1, 2019, is subject to the filing and reporting requirements of § 26-51-806.