Do you know about the big tax break you get if you work in Texarkana Arkansas?

The 'Border City Tax Exemption' is a way for someone to live in the Texarkana Arkansas city limits to not have to pay Arkansas state income tax. But let's go into more detail ln how this exemption can help or possibly hurt you.

Olga Delawrence Unsplash
Olga Delawrence Unsplash

This is how the 'Border City Tax Exemption' is worded exactly:

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.

If you are curious the Tax rate of incomes between $8,1001 through $79,300 is 5.9 percent.

If you make $35,000 the Arkansas tax would be $2065 dollars.

If you make $50,000 the Arkansas tax would be $2950 dollars.

And if you make $75,000 the Arkansas tax would be $4425 dollars.

Recha Oktaviani Unsplash
Recha Oktaviani Unsplash

How can you make sure you don't have to pay the Arkansas tax?

If you work in Texarkana Arkansas you must live in the city limits of Texarkana Texas or Texarkana Arkansas.

Here are some areas that are not in the Texarkana Texas or Texarkana Arkansas city limits.

Wake Village, Texas,

Nash, Texas

Most of northwest Pleasant Grove is technically out of the city limits.

Genoa Arkansas

All of Liberty Eylau

If you live in any of these areas you will have to pay the Arkansas state income tax.

So if you plan on working in Texarkana Arkansas please make sure you are living inside the city limits so there won't be a big surprise come tax time. To get more information on the City limits of Texarkana Arkansas you can find that here. You will find the Texarkana Texas city limits on this map.

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