AR HB1116

Exempts nonresident workers from Arkansas income tax if they earn $2,500 or less performing employment duties in the state during the tax year and work in multiple states for their employer

Eliminates employer withholding requirements for employees who work in Arkansas 15 or fewer calendar days per year and perform duties in multiple states, excluding professional athletes, entertainers, and public figures paid per event

Authorizes the Department of Finance and Administration to enter into reciprocity agreements with other states to mutually exempt each other's residents from income tax, subject to Legislative Council approval

Shields employers from penalties and interest for withholding errors when they rely on time and attendance systems, travel records, or employee attestations to determine multi-state workers' tax obligations

Effective for tax years beginning on or after January 1, 2026