If you are not a resident of Arkansas but you have income from Arkansas sources, you would be required to file an Arkansas state income tax return. If you are a part-year resident, you would be subject to Arkansas state tax on all your income from all sources during the part of the year you are an Arkansas resident, and on income from Arkansas sources during the part of the year you are a nonresident.
According to the Arkansas Department of Finance and Administration, you are considered a nonresident if you did not make your domicile in Arkansas. Domicile for these purposes is the place you intend to have as your permanent home and where you intend to return whenever you are away. If you move out of Arkansas but intend to stay there only for a limited time, regardless of how long, your domicile in Arkansas does not change. It would only change when you move to a location outside the state where you intend to make your permanent home. You would be a part-year resident the year you establish domicile in Arkansas or the year you move out of the state.
Arkansas source income would generally include salaries and wages for services performed in Arkansas; income from a trade, business or profession carried on in Arkansas; income from a farm in Arkansas; income from a partnership, limited liability company or S corporation in Arkansas; rental and royalty income from property located in Arkansas; gains or losses on the sale of real property located in Arkansas; and interest and dividends from Arkansas sources.
Military pay received by members of the service stationed in Arkansas who are not domiciled in Arkansas is not subject to Arkansas state income tax. And according to the Military Spouses Residency Relief Act, the spouse of a member of the military stationed in Arkansas is exempt from Arkansas state income tax on income earned in Arkansas if the service member’s home of record is not Arkansas and the non-military spouse has the same domicile as the service member. The Arkansas Department of Finance and Administration points out that the nonmilitary spouse must submit a new payroll withholding form, ARW-4MS to his/her employer each year to exempt future withholding.
Students from other countries who are in Arkansas and are exempt from federal income tax under a tax treaty are subject to Arkansas state income tax. The tax would apply on any Arkansas source income, including non-qualified scholarships and fellowships, and stipends. To qualify to be excluded for tax purposes, the scholarship or fellowship must be for a candidate for a degree and used to pay for tuition and fees required for enrollment or for books, supplies and equipment required of all students in the course. Non-qualified scholarships would include the portion of scholarships used to pay for room and board or other personal expenses.
According to the Arkansas Department of Finance and Administration, non-residents or part-year residents who have any income from Arkansas sources must file a return, regardless of the amount of income. Nonresidents and part-year residents use Form AR1000NR. If you are married and one spouse is an Arkansas resident and the other is not you cannot file on the same return. The Arkansas resident would have to file using Form AR1000F and the non-resident or part-year resident would use Form AR1000NR. Both must use filing status 5, married filing separately on different returns. Nonresidents and part-year residents must attach a complete copy of their federal return to their Arkansas state tax return.
Sources:
Arkansas Individual Income Tax Forms and Instructions, Arkansas Department of Finance and Administration
Form AR1000NR, Arkansas Individual Income Tax Return
Individual Income Frequently Asked Questions, Arkansas Department of Finance and Administration
