Advantage Arkansas – Income Tax Credit
Advantage Arkansas offers a state income tax credit for job creation based on the payroll of new, full-time, permanent employees hired as a result of the project.
The payroll threshold for qualifying for Advantage Arkansas and the benefit received depends on the tier in which the business locates or expands. Arkansas is segmented into four tiers based on poverty rate, population growth, per capita income and unemployment rate.
|
Tier |
Payroll Threshold |
Benefit Based on Payroll of New, Full-time, Permanent Employees |
|
1 |
$125,000 |
1% of payroll |
|
2 |
$100,000 |
2% of payroll |
|
3 |
$75,000 |
3% of payroll |
|
4 |
$50,000 |
4% of payroll |
The income tax credit is earned each tax year for a period of five years. The income tax credit cannot offset more than 50 percent of a business' income tax liability in any one year and may be carried forward for nine years beyond the tax year in which the credit was first earned. The credit begins in the tax year in which the new employees are hired. Employees must be Arkansas taxpayers.
For more information, Joey Dean (Vice President, Economic Development; Executive Director, Metro Little Rock Alliance), 501.377.6006.