AR HB1434

Adjusts income tax brackets for individuals, trusts, and estates effective for tax years beginning January 1, 2020, increasing the threshold for the lowest bracket from $21,000 to $22,200 and the highest bracket from $75,000 to $79,300.

Modifies tax rates across multiple income brackets, including reducing the top rate in the highest bracket from 6% to 5.9% and adjusting bracket adjustment amounts for incomes between $79,301 and $84,600.

Creates a new state earned income tax credit equal to 5% of the federal credit under 26 U.S.C. § 32, effective for tax years beginning January 1, 2021, with excess credits refunded to taxpayers.

Repeals the prior provision conditioning income tax rate reductions on collections from remote sellers exceeding $70 million.

Declares an emergency clause citing the need to make Arkansas more competitive with surrounding states by reducing income tax rates.