HB1012
To Amend The Standard Deduction For Income Tax Purposes; And To Increase The Standard Deduction.
Last Action (Nov. 28, 2022): Recommended for study in the Interim by Joint Interim Committee on REVENUE & TAXATION- HOUSE
Sponsors
AI-Generated Summary
House Bill 1012 proposes an amendment to the Arkansas Code regarding the state standard deduction for income tax purposes. The bill seeks to increase the standard deduction for individual taxpayers from $2,200 to $4,400 per taxpayer, effective for tax years beginning on or after January 1, 2023. This provision also applies to married couples, entitling each spouse to claim the increased standard deduction of $4,400. The primary purpose of the legislation is to reduce the overall taxable income for Arkansas taxpayers by allowing a larger portion of their earnings to be excluded from state income taxation.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill are individual Arkansas taxpayers who file state income tax returns. By doubling the standard deduction, taxpayers will see a decrease in their total taxable income, which will likely result in a lower state income tax liability for most residents, particularly those who do not itemize their deductions.
Who Might Suffer?
The primary entity negatively impacted by this legislation is the State of Arkansas government, as the increase in the standard deduction will result in a reduction of state income tax revenue. This decrease in tax collections could necessitate adjustments to the state budget, potentially impacting the funding available for public services, infrastructure, or state-funded programs.
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