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Form Properties
| Fact Name | Description |
|---|---|
| Exemption Overview | Residents of Texarkana, Arkansas, and Texarkana, Texas, can claim an exemption from Arkansas income tax for income earned in Texarkana, Arkansas. |
| Governing Law | This exemption is governed by Arkansas state tax law, specifically relating to border city income tax regulations. |
| Filing Requirements | To claim the exemption, you must file using a street address in Texarkana and attach necessary forms like the W-2 and AR-TX if applicable. |
| Income Reporting | All income from various sources must be reported on your Arkansas tax return, with eligible income claimed as an adjustment on Form AR1000ADJ. |
Key takeaways
When filling out and using the Arkansas Border City form, there are several important points to keep in mind. Here are key takeaways that can help ensure a smooth process:
- Residency Matters: The exemption applies only if you are a resident of Texarkana, Arkansas, or Texarkana, Texas.
- Income Exemption: Income earned in Texarkana, Arkansas, is exempt from Arkansas income tax for residents of both Texarkana cities.
- Taxable Income: Any income earned from Arkansas sources outside of Texarkana is subject to Arkansas tax.
- Correct Address Required: Always use your street address when filing. P.O. Boxes or Rural Routes will result in disallowance of the exemption.
- W-2 Forms: If claiming an exemption for W-2 income, attach both the W-2 and the AR-TX form provided by your employer.
- Non-Wage Income: The AR-TX form is not necessary for non-wage income, such as interest or dividends.
- Verification May Be Needed: Be prepared to provide additional information for verification if adjustments for non-wage income are claimed.
- Filing Requirement: You must file an Arkansas tax return and report your total income from all sources.
- Claiming the Exemption: To claim the exemption, include it as an adjustment on Form AR1000ADJ.
- Stay Informed: Keep updated on any changes to tax laws or requirements that may affect your exemption status.
By following these guidelines, you can navigate the Arkansas Border City form process more effectively and ensure compliance with state tax regulations.
Detailed Steps for Using Arkansas Border City
Filling out the Arkansas Border City form requires careful attention to detail. It’s important to ensure that you meet all the necessary conditions for claiming the exemption. Follow these steps to complete the form accurately.
- Gather your documents, including your W-2 form and any other relevant income statements.
- Confirm that you are a resident of either Texarkana, Arkansas or Texarkana, Texas. Ensure you have a valid street address; using a Post Office Box or Rural Route will disqualify your exemption.
- Start filling out the form by entering your personal information, including your name, address, and Social Security number.
- If you are claiming an exemption for income reported on a W-2 form, attach the W-2 and the AR-TX form provided by your employer. Remember, the AR-TX is not needed for non-wage income.
- Report your total income from all sources on the Arkansas return. Make sure to include any taxable income from Arkansas sources.
- On Form AR1000ADJ, claim the exemption for eligible income as an adjustment. Ensure that all calculations are accurate.
- Review the completed form for any errors or missing information before submitting it.
- Submit the form by the required deadline to ensure your exemption is processed.
Once you have submitted your form, keep a copy for your records. You may need it for future reference or in case of any inquiries from tax authorities.
Common mistakes
Filling out the Arkansas Border City form can be straightforward, but many people make common mistakes that can lead to complications. One frequent error is the use of a Post Office Box or Rural Route as an address. To qualify for the exemption, you must provide your street address in either Texarkana, Arkansas, or Texarkana, Texas. If you do not follow this guideline, your exemption will be disallowed.
Another mistake occurs when individuals forget to attach necessary documentation. For those claiming an exemption based on income from a W-2 form, it is essential to include both the W-2 and the Form AR-TX provided by the employer. Omitting these documents can result in delays or denials of the exemption.
Some people also fail to report all sources of income on their Arkansas return. Even if certain income is exempt, you must still report your total income from all sources. Neglecting to do so can raise red flags and complicate your tax situation.
Additionally, individuals sometimes overlook the requirement for additional information when claiming exemptions for non-wage income. If you have income from sources like interest or dividends, you may need to provide further verification. Ignoring this requirement can lead to complications during the review process.
Another common error is misunderstanding the types of income that qualify for the exemption. Only income earned in Texarkana is exempt; income from other Arkansas sources remains taxable. Misinterpreting this can lead to incorrect filings.
People may also miscalculate their total income, which can affect their eligibility for the exemption. It is crucial to ensure that all figures are accurate and that you are not underreporting or overreporting income.
Furthermore, some filers fail to use the correct form for claiming the exemption. The adjustment must be made on Form AR1000ADJ. Using the wrong form can result in the exemption being denied.
Lastly, individuals may not seek assistance or clarification when needed. Tax forms can be complex, and it is always advisable to ask questions if you are unsure about any part of the process. Seeking help can prevent errors and ensure that your filing is correct.
Arkansas Border City Sample
Subject 302
Border City Exemption (Texarkana – Arkansas and Texas)
If you were a resident of Texarkana, Arkansas, the income you earned is exempt from Arkansas income tax.
If you were a resident of Texarkana, Texas, the income you earned working in the city of Texarkana, Arkansas is exempt from Arkansas Income Tax. Any other income you earned from Arkansas sources is taxable to Arkansas.
To claim this exemption, you must meet the following conditions:
1)You must file using your street address within the city limits of either Texarkana, Arkansas or Texarkana, Texas. If you use a Post Office Box or Rural Route this exemption will be disallowed.
2)If you are claiming an exemption for income from a
3)You must file an Arkansas return and report your total income from all sources. You may claim the exemption for eligible income as an adjustment on Form AR1000ADJ.
NOTE: The AR4EC is the form you supply your employer, so they know to issue you an
Revised 3/17/2023