Arkansas Code of 1987 (2023) › Title 26 - TAXATION (§§ 26-1-101 — 26-82-119) › Subtitle 5 - STATE TAXES (§§ 26-50-101 — 26-65-108) › Chapter 51 - INCOME TAXES (§§ 26-51-101 — 26-51-2804) › Subchapter 9 - ARKANSAS INCOME TAX WITHHOLDING ACT OF 1965 (§§ 26-51-901 — 26-51-920) › Section 26-51-905 - Withholding of tax

(a)
(1)
Every employer making payments of wages to employees shall deduct and withhold from the employees' wages an amount determined from withholding tables promulgated by the Secretary of the Department of Finance and Administration and furnished to the employer.
(2)
The full amount deducted and withheld from any employee's wages during the income year shall be credited against the tax liability of the employee under the Income Tax Act of 1929, §
26-51-101
et seq., for that year.
(b)
(1)
Notwithstanding the provisions of subsection (a) of this section, every employer who withholds less than one thousand dollars ($1,000) for a full year's withholding shall report and remit annually on a date specified by the secretary any amounts so withheld by the employer.
(2)
An employer shall be advised by the secretary of the employer's classification and shall report as classified until such time as the employer advises the secretary in writing that the employer no longer has employees or the employer is closing the business.
(3)
However, it shall be the duty of the employer to report to the secretary at the end of each income year all wages paid to any such employees on the same forms provided in this subchapter for making employer annual withholding statements in order that the secretary may determine the tax liability, if any, of those employees during that income year.
(c)
(1)
(A)
For purposes of this subchapter, the payment of unemployment compensation benefits or unemployment insurance benefits shall be treated as the payment of wages by an employer to an employee if:
(i)
The payment is of the type included in "gross income" under §
26-51-404(a)(1)(G)
or §
26-51-404(a)(1)(H)
; and
(ii)
The recipient of the payment has requested that the payment be subject to withholding under this subchapter by the agency receiving the application for unemployment compensation benefits or unemployment insurance benefits.
(B)
The amount to be deducted and withheld from a payment under subdivision (c)(1)(A) of this section is four and five-tenths percent (4.5%) of the payment.
(2)
A person applying for unemployment compensation benefits or unemployment insurance benefits shall be informed by the agency receiving the application of the taxability of the unemployment compensation benefits or unemployment insurance benefits and the option to request withholding under this subchapter.
(3)
The recipient of unemployment compensation benefits or unemployment insurance benefits shall be permitted to change his or her previously elected withholding status.
(4)
An agency required to deduct and withhold under this subsection is not liable under §
26-51-916
for the amounts required to be deducted and withheld.
(5)
This subsection shall not be construed to require the Division of Workforce Services to deduct, withhold, or remit any amount under the income tax withholding act or the income tax levy of any state other than Arkansas.
Amended by Act 2021, No. 283,§ 2, eff. 7/28/2021.
Amended by Act 2019, No. 910,§ 3754, eff. 7/1/2019.
Acts 1965, No. 132, § 3; 1968 (1st Ex. Sess.), No. 61, § 1; 1969, No. 122, § 1; 1981, No. 851, § 1; A.S.A. 1947, § 84-2076; 2003, No. 1017, § 2.