Schedule AR1000TC — Tax Credits and Business Incentive Credits Instructions

# INSTR INSTRUCTIONS FOR AR1000TC LINE 1.

Text version of this table

LINE	1.	A credit of up to $50.00 per taxpayer ($100.00 for a joint return) is allowed against your Arkansas individual income
		tax liability for cash contributions made by the taxpayer(s) to one of the following:
		1 A candidate seeking nomination or election to a public office or to the candidate’s campaign committee.
		2 An approved political action committee as defined by Arkansas Code Annotated § 7-6-201.
		3 An organized political party as defined in Arkansas Code Annotated § 7-1-101.
		For the purposes of this credit, “public office” means any office created by or under the authority of the laws of
		the State of Arkansas, or a subdivision thereof, that is filled by the voters. qhe credit does not ~pply to
		FRQWULEXWLRQVPDGHWRFDQGLGDWHVIRUIHGHUDORIÀFHV The contribution must be made by April 15,
		2026 to be claimed on the 2025 tax return.
		Enter the amount of allowable State Political Contributions Credit s on this line. The allowable credit s cannot
		exceed $50.00 for filing status 1, 3, 5, or 6 or $100.00 total for filing status 2 or 4.
LINE	2.	The purpose of the other state tax credit is to prevent Arkansas residents from being taxed twice on income earned
		outside of the state of Arkansas. Nonresidents cannot claim this credit on their Arkansas return.
		The credit amount is the lesser of the two (2) amounts below:
		1. Either the actual tax liability amount from outside states,
		or
		2. The other states’ taxable income taxed at Arkansas rates.
		To calculate #2 listed above, there are three (3) steps:
		ptep NW Calculate on an AR1000F what the taxpayer’s Total Tax line 33 of the AR1000F would be with everything
		included, as you would normally—Arkansas and the other states’ income/losses included.
		ptep OW Temporarily redo the AR1000F, but with all the other states’ income/losses removed. Make a note of the
		new Total Tax amount.
		ptep PW Subtract the Total Tax in Step 2 from the Total Tax in Step 1. This lets you see exactly how much affect
		the other states’ income had on AR taxes this is how much the tax would be on the outside income, if added to
		the Arkansas income, and calculated at Arkansas income tax rates.
		klqbW It is important to keep in mind that some deductions on the AR1000F return are directly linked to income
		and might need to be adjusted in Step 2 of the above calculations. An example would be other states’ gambling
		losses.
		YOU MUST ATTACH TO YOUR ARKANSAS RETURN A SIGNED COPY OF THE TAX RETURN(S) YOU FILED
		WITH THE OTHER STATE(S).
		A tax credit is allowed for a resident shareholder’s pro rata share of any net income tax paid by a Sub S Corporation
		to a state that does not recognize Sub S Corporation status.
		The State of Mississippi enacted a special tax that applies exclusively to gambling winnings. This tax is separate
		and distinct from Mississippi’s income tax. As such, an Arkansas taxpayer cannot claim a credit against their
		Arkansas income tax liability for payment of the gambling winnings tax to the State of Mississippi.
LINE	PK	The Adoption Expense Credit allowed is twenty percent EOMBF of the ~mount ~llowed on your feder~l
		return. A copy of federal Form 8839 must be attached to your Arkansas return.
LINE	QK	Enter the allowable Phenylketonuria Disorder Credit. Attach Form AR1113.
LINE	RK	Enter the allowable amount. Attach Certificate of Birth resulting in stillbirth maximum credit is $500 per stillborn
		birth. Total credit cannot exceed amount of Total Tax).

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Either the actual tax liability amount from outside states, or
The other states' taxable income* taxed at Arkansas rates.

To calculate #2 listed above, there are three (3) steps:
Step 1: Calculate on an AR1000F what the taxpayer's Total Tax (line 33 of the AR1000F) would be with everything included, as you would normally-Arkansas and the other states' income/losses included.
Step 2: (Temporarily) redo the AR1000F, but with all the other states' income/losses removed. Make a note of the new Total Tax amount.
Step 3: Subtract the Total Tax in Step 2 from the Total Tax in Step 1. This lets you see exactly how much affect the other states' income had on AR taxes; this is how much the tax would be on the outside income, if added to the Arkansas income, and calculated at Arkansas income tax rates.
NOTE: It is important to keep in mind that some deductions on the AR1000F return are directly linked to income and might need to be adjusted in Step 2 of the above calculations. An example would be other states' gambling losses.
YOU MUST ATTACH TO YOUR ARKANSAS RETURN A SIGNED COPY OF THE TAX RETURN(S) YOU FILED
WITH THE OTHER STATE(S).
A tax credit is allowed for a resident shareholder's pro rata share of any net income tax paid by a Sub S Corporation to a state that does not recognize Sub S Corporation status.
The State of Mississippi enacted a special tax that applies exclusively to gambling winnings. This tax is separate and distinct from Mississippi's income tax. As such, an Arkansas taxpayer cannot claim a credit against their Arkansas income tax liability for payment of the gambling winnings tax to the State of Mississippi.
LINE 3. The Adoption Expense Credit allowed is twenty percent (20%) of the amount allowed on your federal return. A copy of federal Form 8839 must be attached to your Arkansas return.

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INSTR
INSTRUCTIONS FOR AR1000TC (CONT.)

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