Self-employed taxes and LLC costs in Arkansas, 2026
In Arkansas the yearly cost of an LLC is a flat franchise tax, and the 2026 income tax changed halfway through the year.
Total tax on this income in 2026
$17,800
Put aside 21% of each payment · $4,450 per quarter
| Self-employment tax (15.3%) | $12,010 |
| Federal income tax | $5,790 |
| Arkansas income tax | $0 |
| QBI deduction used | $12,579 |
| Effective rate on all income | 20.9% |
With an S corp election and a $34,000 salary, about $3,632 less tax (check it).
Computed by Radif Partners from IRS and Arkansas agency documents read on October 15, 2026 · How we calculate
An Arkansas LLC costs $45 to form online with the Secretary of State and then owes a flat $150 franchise tax every year, paid with the Annual LLC Franchise Tax Report on or before May 1, with no extension available. Over five years that comes to $795 in state fees. The owner's profit is taxed on the Arkansas individual return, whose top rate was lowered by a law passed in a May 2026 special session and applied back to January 1, 2026. Because the department's 2026 rate tables were not all published when the figures were checked, this page quotes no Arkansas rate or tax amount and the calculator leaves the Arkansas line at zero. Arkansas follows the S election. A new employer pays 2 % unemployment tax on the first $7,000 of the owner's salary, and with $120,000 of profit and a $50,000 salary the election saves about $5,178 a year.
Arkansas at a glance, 2026
| LLC filing fee | $45 |
| Annual LLC Franchise Tax Report | $150 a year |
| Income tax | see the state revenue department |
| S corporation election | followed by the state |
| Tax on $75,000 of profit (single) | $15,495 federal; Arkansas tax not verified |
The Arkansas franchise tax on an LLC does not depend on revenue, members or capital. It is $150, paid each year with the Annual LLC Franchise Tax Report by May 1, and the Secretary of State grants no extension (Arkansas SOS, 2026 LLC franchise tax report). The registration for it happens at formation, filed together with the Certificate of Organization (Form LL-01) at no extra charge. The certificate itself costs $45 online and $50 on paper (Arkansas SOS, LLC forms and fees).
A rate cut voted in May, dated January
Act 2 of the 2026 First Extraordinary Session lowered the top individual rate and made the change retroactive to January 1, 2026; the Department of Finance and Administration then updated its withholding formula (Act 2 of 2026). Arkansas also computes income its own way. It does not start from federal adjusted gross income, uses a small standard deduction, and gives personal tax credits rather than exemptions. Above a certain income a separate table applies, which a simple bracket list overstates slightly. Until the department's 2026 tables are final, this page does not give an Arkansas rate. The calculator leaves the state line at zero, and the state income tax comparison carries the same caveat.
Estimated payments and the 90% rule
You owe Arkansas estimated payments when you can reasonably expect your estimated tax to be more than $1,000 for the year. The payments must cover at least 90% of the tax actually due, and the penalty on a shortfall runs at 10% a year on the underestimated amount (DFA, 2026 Form AR1000ES). The four dates match the federal ones listed in the quarterly estimated tax guide.
Running the LLC as an S corporation
An LLC that elects S status stays an LLC under Arkansas law, so the same $150 franchise tax applies; the corporation franchise tax based on capital stock concerns companies incorporated as corporations. Arkansas follows the federal election and puts no income tax on the S corporation. Payroll is cheap on the state side. A new employer pays 2 % on the first $7,000 of wages per employee, a few hundred dollars at most on an owner's salary, and experienced rates range lower or higher with claims history (Division of Workforce Services).
Owners who care about the federal cap on the state and local tax deduction can look at the elective pass-through entity tax created by Act 362 of 2021: the S corporation or partnership elects on Form AR362, pays Arkansas tax at the top individual rate on its income, and the owners take a credit (DFA, pass-through entity tax FAQ). The 2026 instructions for that return were not yet published. The LLC vs S corp calculator runs the payroll side with Arkansas selected.