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posted Jun 3, 2019 5:03:57 PM

I don't live in Arkansas, but I am going to buy rental property there. How much of my income is up for taxing on AR1000NR? Just my AR income or all my income?

Just for fictitious details and easy numbers let say I have $100,000 in non AR based income and $5000 income (after expenses) in AR rental property income.

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Expert Alumni
Jun 3, 2019 5:03:58 PM

It depends.  However, when most states calculate your nonresident income tax, they factor in all of your income.

So, in your example, suppose Arkansas would assess 5,000 of tax on $100,000 of income.  Since your income is 5% of that amount, your AR tax would be 5% of $5,000, or $250.  (Ficticious tax number.  Arkansas' tax rate may be higher or lower).

If you live in a state with income tax, your resident state also taxes that income.  But they will give you a credit for the tax you must pay to AR on that income so that you are not double-taxed.

1 Replies
Expert Alumni
Jun 3, 2019 5:03:58 PM

It depends.  However, when most states calculate your nonresident income tax, they factor in all of your income.

So, in your example, suppose Arkansas would assess 5,000 of tax on $100,000 of income.  Since your income is 5% of that amount, your AR tax would be 5% of $5,000, or $250.  (Ficticious tax number.  Arkansas' tax rate may be higher or lower).

If you live in a state with income tax, your resident state also taxes that income.  But they will give you a credit for the tax you must pay to AR on that income so that you are not double-taxed.