Arkansas · Gambling Loss Deduction
Gambling Loss Deduction in Arkansas (2026)
Deduct gambling losses as an itemized deduction; starting with 2026 tax years only 90% of wagering losses are allowed, and the deduction still can't exceed gambling winnings reported. Arkansas has a progressive income tax with a top rate of 3.9%, so a Arkansas filer's combined marginal rate on the next dollar at $52,528 of income is about 15.9% (12% federal + 3.9% AR).
2026 savings example for Arkansas
Planning estimate for a single filer earning $52,528 (Arkansas median household income in LevyIO's state dataset) who removes $5,000 from taxable income. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; AR tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$795
Federal savings
$600
$4,123 → $3,523 · 12% bracket
AR state savings
$195
$1,865 → $1,670 · 3.9% marginal
Combined marginal rate
15.9%
≈ $159 saved per $1,000 deducted
Federal × Arkansas marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The AR column is the state marginal rate at the midpoint of each range. The last column is the tax saved per $1,000 deducted at that combined rate.
| Federal bracket | Gross income (single) | AR marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 3.9% | 13.9% | $139 |
| 12% | $28,500 - $66,500 | 3.9% | 15.9% | $159 |
| 22% | $66,500 - $121,800 | 3.9% | 25.9% | $259 |
| 24% | $121,800 - $217,875 | 3.9% | 27.9% | $279 |
| 32% | $217,875 - $272,325 | 3.9% | 35.9% | $359 |
| 35% | $272,325 - $656,700 | 3.9% | 38.9% | $389 |
| 37% | Over $656,700 | 3.9% | 40.9% | $409 |
Eligibility & forms
Taxpayers with gambling winnings
- For 2026 and later tax years, only 90% of losses count (IRC 165(d))
- Deduction can't exceed gambling winnings
- Must itemize
- Detailed records required
Federal forms: Schedule A, Form W-2G
Arkansas filing notes
Maximize the 50% capital gains exclusion on Arkansas-based business or property sales. The state standard deduction is low ($2,470 single), so itemizing may be worthwhile.
Common mistakes: Deducting more than winnings; Not reporting all winnings.
Frequently asked questions
How much can the Gambling Loss Deduction save a Arkansas taxpayer in 2026?
In LevyIO's example, a single filer with $52,528 of income (the Arkansas median household income in our state dataset) who removes $5,000 from taxable income saves about $600 in 2026 federal tax (12% marginal bracket) plus about $195 in Arkansas tax (3.9% state marginal rate), roughly $795 combined. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's AR bracket data, not a survey figure.
What is the Arkansas income tax rate for 2026?
Arkansas has a progressive income tax with a top rate of 3.9%. The AR standard deduction in LevyIO's dataset is $2,470 single / $4,940 married. Two brackets: 2% and 3.9% top rate. 50% capital gains exclusion on Arkansas assets. Highest combined sales taxes.
Who qualifies for the Gambling Loss Deduction in Arkansas?
Taxpayers with gambling winnings. The federal rules are the same in every state; the requirements are: For 2026 and later tax years, only 90% of losses count (IRC 165(d)); Deduction can't exceed gambling winnings; Must itemize; Detailed records required. Arkansas filers should confirm on the AR return whether the state follows the federal treatment.
Which forms do I file to claim the Gambling Loss Deduction?
Federal: Schedule A, Form W-2G. Arkansas: check the Arkansas Department of Finance and Administration instructions for the matching state schedule. Common mistakes: Deducting more than winnings; Not reporting all winnings.
Gambling Loss Deduction in other states
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.