Arkansas Administrative Code

26 CAR § 100-102. Interpretation. (a) In those instances where Arkansas has adopted a section of the Internal Revenue Code as its own law, the regulations promulgated by the United States Treasury to aid in interpreting the Internal Revenue Code section should be used for guidanc…

26 CAR § 100-103. Date of performance — Arkansas Code § 26-18-105. (a) United States Postal Service postmark — Arkansas Code § 26-18-105(a)(2). Only the postmark of the United States Postal Service shall qualify for the provisions of this part for the filing of a return, claim, s…

26 CAR § 100-104. Additional penalties and tax — Arkansas Code § 26-18-208. (a) Failure to file and failure to pay penalties — Arkansas Code § 26-18-208(3)(B). For individual income tax purposes only, failure to file penalties of five percent (5%) per month and failure to pay pen…

26 CAR § 100-105. Time limitations for assessments, collection, refunds, and prosecution — Arkansas Code § 26-18-306. (a) Adjustment to federal return — Duty to amend state return — Arkansas Code § 26-18-306(b). (1) For any given tax year, if the Internal Revenue Service changes …

26 CAR § 100-106. Taxpayer relief — Arkansas Code § 26-18-404. (a) Protest of proposed assessment — Arkansas Code § 26-18-404(c). (b) A taxpayer cannot file a protest based upon a notice of tax adjustment but must wait until a proposed assessment is received. (c)(1) The taxpayer …

26 CAR § 100-107. Hearing on proposed assessments — Arkansas Code § 26-18-405. (a) Hearing on proposed assessments — Arkansas Code § 26-18-405(d)(4)(A). (b) If a proposed assessment is sustained, in whole or part by the Office of Hearings and Appeals of the Department of Finance …

26 CAR § 100-108. Judicial relief — Arkansas Code § 26-18-406. (a) Judicial relief — Arkansas Code § 26-18-406(a). (b)(1) A taxpayer may seek further relief from the final decision of the hearing officer or the Secretary of the Department of Finance and Administration on a final …

26 CAR § 100-109. Extension of time for filing returns — Arkansas Code § 26-18-505. (a) First ninety-day extension — Arkansas Code § 26-18-505(a)(3)(A) [repealed]. (1)(A) Taxpayers may request a ninety-day state extension past the original due date of the state individual income …

26 CAR § 100-110. Preservation of records by taxpayer — Arkansas Code § 26-18-506. (a) Type of records and time period — Arkansas Code § 26-18-506(b). (1) The taxpayer is required to keep and maintain all records that are necessary to: (A) Reconcile the amount of tax due; or (B) …

26 CAR § 100-111. Claims for refunds of overpayments — Arkansas Code § 26-18-507. (a) Grounds for refund claim — Arkansas Code § 26-18-507(a). (1)(A) A taxpayer who has paid any tax to the State of Arkansas through error of fact, computation, or mistake of law, in excess of the t…

26 CAR § 100-112. Taxpayer Bill of Rights — Arkansas Code § 26-18-801 et seq. (a) Your rights as a taxpayer — Arkansas Code § 26-18-801 et seq. (b) You have the right to full explanation of all actions by any agent of the Commissioner of Revenue both during: (1) An audit; and (2)…

26 CAR § 100-113. Definitions — Arkansas Code § 26-51-102. (a) Administrator — Arkansas Code § 26-51-102(8). A person appointed by the court to administer (that is, manage or take charge of) the estate, including liabilities, of a decedent. (b) Charitable trust — Arkansas Code § …

26 CAR § 100-114. Nonresidents — Arkansas Code § 26-51-202. (a) Income producing property — Arkansas Code § 26-51-202(a). A nonresident individual, partnership, trust, or estate that earns income from property (real property or tangible personal property) located within Arkansas …

26 CAR § 100-115. Fiduciaries — Arkansas Code § 26-51-203. (a) Fiduciaries, generally — Arkansas Code § 26-51-203. (b) Arkansas income tax shall be levied against and paid by resident fiduciaries on the net income of: (1) Estates and trusts that has not been distributed (or becom…

26 CAR § 100-116. Income from sale of home — Arkansas Code § 26-51-305 [repealed]. (a) One-time exclusion of gain from gross income — Arkansas Code § 26-51-305(a) [repealed]. A taxpayer may make a one-time (i.e., once-in-a-lifetime) election to exclude from his or her gross incom…

26 CAR § 100-117. Compensation and benefits from military service — Arkansas Code § 26-51-306. (a) Exemption amount — Arkansas Code § 26-51-306. (1) The first six thousand dollars ($6,000) of service pay or service allowances received by any active duty member of the United State…

26 CAR § 100-118. Retirement plans and disability benefits — Arkansas Code § 26-51-307. (a) Retirement or disability benefits — Arkansas Code § 26-51-307. (1) The first six thousand dollars ($6,000) of retirement or disability benefits received by a resident of Arkansas from an i…

26 CAR § 100-119. Tax year — Accounting method — Arkansas Code § 26-51-401. (a) Method of accounting — Arkansas Code § 26-51-401(a). (1) It is recognized that no uniform method of accounting can be prescribed for all taxpayers, and the law contemplates that each taxpayer shall ad…

26 CAR § 100-120. Tax year — Basis for determining liability — Arkansas Code § 26-51-402. (a) Tax year — Calendar year versus fiscal year — Arkansas Code § 26-51-402(a). (b)(1) Taxable income is computed on the basis of a period of time called a tax year. (2) A tax year generally…

26 CAR § 100-121. Income generally — Arkansas Code § 26-51-403. (a) Income generally — Arkansas Code § 26-51-403(b). (1) Each year's return should be completed in itself, and taxpayers are expected to make every reasonable effort to ascertain the facts necessary to make a correct…

26 CAR § 100-122. Gross income generally — Arkansas Code § 26-51-404. (a) Classes of income — Arkansas Code § 26-51-404(a)(1). (1) The tax imposed by the Income Tax Act of 1929, Arkansas Code § 26-51-101 et seq., is upon net income. (2)(A) In the computation of the tax, various c…

26 CAR § 100-123. Partnership income — Arkansas Code § 26-51-405. (a) Partnership income generally — Arkansas Code § 26-51-405. (1) Partnership income must be allocated to the state where it was actually earned. (2) All partnership income from activities carried on within Arkansa…

26 CAR § 100-124. Federal Subchapter S adopted — Arkansas Code § 26-51-409. (a) I.R.C. Subchapter S adopted — Arkansas Code § 26-51-409. Subchapter S of the Internal Revenue Code of 1986, as in effect on January 1, 1997, regarding small business corporations, has been adopted for…

26 CAR § 100-125. Inventory — What constitutes inventory — Arkansas Code § 26-51-410. (a) In order to reflect the net income correctly, inventories at the beginning and end of each year are necessary in every case in which the production, purchase, or sale of merchandise is an in…

26 CAR § 100-126. Gain or loss — Sales of property — Arkansas Code § 26-51-411. (a) Amount realized on disposition of property — Arkansas Code § 26-51-411(a). (1)(A) The amount realized from the sale or other disposition of property is the sum of any money received plus the fair …

26 CAR § 100-127. Gain or loss — Exchange of property — Arkansas Code § 26-51-412. (a) Exchange of property for like property — Arkansas Code § 26-51-412(a). (1) For purposes of the Income Tax Act of 1929, Arkansas Code § 26-51-101 et seq., no gain or loss shall be recognized in …

26 CAR § 100-128. Corporate liquidations — Arkansas Code § 26-51-413. (a) Amounts distributed in complete liquidation — Arkansas Code § 26-51-413. (1)(A) Amounts distributed in complete liquidation of a corporation are to be treated as in full payment in exchange for the stock, a…

26 CAR § 100-129. Deferred compensation plans — Arkansas Code § 26-51-414. (a) Deferred compensation plans — IRAs — Arkansas Code § 26-51-414. (1)(A) A nonworking spouse can open up his or her own IRA and contribute up to two thousand dollars ($2,000) per year to the IRA. (B) Und…

26 CAR § 100-130. Deductions — State income taxes — Arkansas Code § 26-51-416. (a) No deduction will be allowed for Arkansas state income taxes in the computation of net income. (b) All other states' income taxes are deductible as a miscellaneous deduction not subject to the two …

26 CAR § 100-131. Deductions — Charitable contributions — Arkansas Code § 26-51-419. (a) Arkansas has adopted I.R.C. § 170 as referenced in Arkansas Code § 26-51-419. (b)(1) I.R.C. § 170(d)(2)(B) does not allow unused contributions to increase NOL carry forward. (2) It merely dec…

26 CAR § 100-132. Deductions — Expenses — Arkansas Code § 26-51-423. (a) Types of deductions — Arkansas Code § 26-51-423(a). (1)(A) In computing an individual's taxable income, the individual is permitted to claim certain deductions. (B) Some of these deductions may be subtracted…

26 CAR § 100-133. Deductions — Losses — Arkansas Code § 26-51-424. (a) Losses — Arkansas Code § 26-51-424(a)(1). (1) Losses sustained during the tax year and not compensated for by insurance or otherwise are fully deductible if: (A) Incurred in a trade or business; (B) Incurred i…

26 CAR § 100-134. Deductions — Worthless debts — Arkansas Code § 26-51-425. (a) Worthless debts — Arkansas Code § 26-51-425. (1)(A) Worthless debts shall be allowed as deductions from income after being ascertained as such. (B) There are two (2) types of bad debts an individual m…

26 CAR § 100-135. Deductions — Net operating loss carryover — Arkansas Code § 26-51-427. (a) Net operating loss carryover — Arkansas Code § 26-51-427. (1)(A) The net operating loss carryover (NOL) is the excess of allowable deductions over gross income derived from a trade or bus…

26 CAR § 100-136. Deductions — Depreciation — Expensing of property — Arkansas Code § 26-51-428. (a) Depreciation — Arkansas Code § 26-51-428(a). (1)(A) For property placed in service during tax years beginning before January 1, 1995, I.R.C. §§ 167, 168, and 179 as in effect on J…

26 CAR § 100-137. Nonresidents or part-year residents — Arkansas Code § 26-51-435. (a) Computing taxable income — Arkansas Code § 26-51-435(a) and (b). (1) Nonresidents or part-year residents of Arkansas shall compute their taxable income as if all their income was earned in Arka…

26 CAR § 100-138. Medical savings accounts — Arkansas Code § 26-51-436. (a) Medical savings account (MSA) — Defined — Arkansas Code § 26-51-436(5). (1)(A) An MSA is a trust or custodial account that is created or organized in the United States exclusively for the purpose of payin…

26 CAR § 100-139. FASITs — Arkansas Code § 26-51-440. (a) Subchapter M — Arkansas Code § 26-51-440. Subchapter M of the Internal Revenue Code of 1986, 26 U.S.C. § 851 et seq., as in effect on January 1, 1997, has been adopted for the purpose of computing Arkansas income tax liabi…

26 CAR § 100-140. Deduction — College and technical school tuition — Arkansas Code § 26-51-447. (a) An itemized deduction from the taxpayer's AGI shall be allowed for a portion of the tuition paid by the taxpayer for the taxpayer, the taxpayer's spouse, or the taxpayer’s dependen…

26 CAR § 100-141. Household and dependent care services — Arkansas Code § 26-51-502. (a) General requirements for the credit — Arkansas Code § 26-51-502(a) and (b)(1). (1)(A) A credit against individual income tax owed to the State of Arkansas is allowed for expenses associated w…

26 CAR § 100-142. Income from sources outside Arkansas — Arkansas Code § 26-51-504. (a) Calculating the credit — Arkansas Code § 26-51-504(a). (1)(A) When the gross income of an Arkansas resident includes income derived from sources outside the State of Arkansas, such as property…

26 CAR § 100-143. Returns by individuals — Arkansas Code § 26-51-801. (a) Who should file — Arkansas Code § 26-51-801(a). (1) Every person receiving gross income from Arkansas sources shall file an Arkansas individual income tax return for the tax year such gross income was recei…

26 CAR § 100-144. Partnership returns — Arkansas Code § 26-51-802. (a) Partnership returns — Generally — Arkansas Code § 26-51-802(a). (1) For a tax year in which a partnership receives any income from Arkansas sources, a partnership return (AR1050) must be: (A) Filed on behalf o…

26 CAR § 100-145. Fiduciary returns — Arkansas Code § 26-51-803. (a)(1) A fiduciary return (AR1002F) is used to report the income of an estate or trust. (2) The income received by an estate or trust will be considered attributable to Arkansas when the estate or trust's trustee, a…

26 CAR § 100-146. Filing returns — Time and place — Forms — Arkansas Code § 26-51-806. (a) Due date and what constitutes filing — Arkansas Code § 26-51-806(a). (1) The due date for the filing of Arkansas individual income tax returns shall be as follows: (A) May 15 for tax years …

26 CAR § 100-147. Filing returns — Extensions of time — Arkansas Code § 26-51-807. (a) Extension of time — Generally — Arkansas Code § 26-51-807(a). (1)(A) A taxpayer who requests an automatic extension of time for filing his or her federal income tax return (by filing Form 4868 …

26 CAR § 100-148. Failure to file return or include income — Arkansas Code § 26-51-808. (a) Taxpayer required to file return or amended return — Arkansas Code § 26-51-808(a) and (b). (1) The Department of Finance and Administration shall have the authority to require a taxpayer t…