What is the Arkansas PTET rate?

Arkansas's PTET rate is 3.90% flat. AR DFA AR1100PET 2024 Instructions (PET rate = highest individual rate; 2024 onward = 3.9%) + AR DFA Withholding Tax Formula Method Effective 01/01/2026 (top bracket 3.90%)

Is the Arkansas owner credit refundable?

Arkansas's PTET owner credit is refundable.

Does Arkansas PTET affect composite-return filing?

Stacks. See the composite-vs-PTET page for the full matrix.

Arkansas · AR

Arkansas Pass-Through Entity Tax (PTET)

Arkansas's PTET regime is one of the 37+ state workarounds to the federal SALT cap (IRC §164(b)(6)). The election is annual, statute-pinned below, and interacts with composite filing and §199A QBI in state-specific ways.

Statute: Ark. Code Title 26, Chapter 65 (Elective Pass-Through Entity Tax); Act 362 of 2021; Act 532 of 2023
State DOR portal: https://www.dfa.arkansas.gov/office/taxes/income-tax-administration/pass-through-entity-tax/
Election deadline: PTE tax due on or before the 15th day of the 4th month after end of taxable year (April 15 for calendar-year filers). Election made by members holding 50% or more of the PTE.
Election form: Form AR1100PET (Pass-Through Entity Tax Return)
Entity-level rate: 3.90% — AR DFA AR1100PET 2024 Instructions (PET rate = highest individual rate; 2024 onward = 3.9%) + AR DFA Withholding Tax Formula Method Effective 01/01/2026 (top bracket 3.90%)
Eligible entities: s-corp, partnership, llc-as-s, llc-as-partnership
Owner credit: refundable
Composite interaction: stacks
§199A QBI base reduction: Yes — Reduces federal flow-through income (Notice 2020-75).
Last verified: 2026-05-12

Source: dfa.arkansas.gov/office/taxes/income-tax-administration/pass-through-entity-tax/ + 2024 AR1100PET instructions. AR has cut individual income tax rates multiple times since 2023; verify 2026 effective rate.

IRC §164(b)(6)Notice 2020-75 IRC §199A

Reference computation

For a Arkansas pass-through entity with $500,000 of qualified net income allocated to this state, at a 37% federal marginal bracket, the entity-level PTET and federal-deduction math is:

Arkansas — reference example

QBI allocation·AR rate= Entity-level tax

$500,000×4%=$19,500

Ark. Code Title 26, Chapter 65 (Elective Pass-Through Entity Tax); Act 362 of 2021; Act 532 of 2023

Entity tax·Federal bracket= Federal deduction (gross)

$19,500×37%=$7,215

At a 37% federal bracket, the entity-level deduction saves $7,215 in federal tax. Net of §199A QBI offset (~20% × bracket × entity tax = $1,443), aggregate benefit is approximately $5,772.

IRS Notice 2020-75

Run the picker pre-filled for Arkansas

Election walkthrough

Verify eligibility. Arkansas accepts: s-corp, partnership, llc-as-s, llc-as-partnership.
Check the deadline. PTE tax due on or before the 15th day of the 4th month after end of taxable year (April 15 for calendar-year filers). Election made by members holding 50% or more of the PTE. Act 532 of 2023 reduced rate effective for tax years beginning 2023 and after.
Compute the entity-level tax. Apply the 3.90% rate to qualified net income.
Pay and file. Use Form AR1100PET (Pass-Through Entity Tax Return). Quarterly estimates may be required.
Owners claim the state credit. refundable credit on the personal state return.
Verify composite interaction. Composite interaction: stacks. See composite vs PTET.
Run the federal §199A QBI math. PTET reduces the QBI base proportionally; net the federal SALT-arbitrage against the §199A offset.

Arkansas PTET — common questions

Annual deadline reminder

State PTET law revises annually. Arkansas's data was last verified on 2026-05-12. Re-confirm with the state DOR primary source before electing or filing. Last full-site review: 2026-05-12.

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Reference computation

For a Arkansas pass-through entity with $500,000 of qualified net income allocated to this state, at a 37% federal marginal bracket, the entity-level PTET and federal-deduction math is:

Entity tax·Federal bracket= Federal deduction (gross)

$19,500×37%=$7,215

At a 37% federal bracket, the entity-level deduction saves $7,215 in federal tax. Net of §199A QBI offset (~20% × bracket × entity tax = $1,443), aggregate benefit is approximately $5,772.

IRS Notice 2020-75

Election walkthrough

Verify eligibility. Arkansas accepts: s-corp, partnership, llc-as-s, llc-as-partnership.

Check the deadline. PTE tax due on or before the 15th day of the 4th month after end of taxable year (April 15 for calendar-year filers). Election made by members holding 50% or more of the PTE. Act 532 of 2023 reduced rate effective for tax years beginning 2023 and after.

Compute the entity-level tax. Apply the 3.90% rate to qualified net income.

Pay and file. Use Form AR1100PET (Pass-Through Entity Tax Return). Quarterly estimates may be required.

Owners claim the state credit. refundable credit on the personal state return.

Verify composite interaction. Composite interaction: stacks. See composite vs PTET.

Run the federal §199A QBI math. PTET reduces the QBI base proportionally; net the federal SALT-arbitrage against the §199A offset.

Arkansas PTET — common questions