How to make the Arkansas PTET election.

Can your business elect?

General partnerships, limited partnerships, LLCs, and S corporations engaged in business for profit and required to file an Arkansas return. C corporations, qualified subchapter S subsidiaries, trusts, sole proprietorships, and LLCs taxed as C corporations cannot elect.

The election is made by members holding more than 50% of the voting rights, and all members are bound by it for that year. Owners cannot opt out, and all Arkansas income of the entity is subject to the tax. An electing entity that owns an interest in another electing entity subtracts its share of that entity's Arkansas income.

Rate: 3.7% on net taxable income and 1.85% on net capital gains for 2026. By statute the rate equals the top individual rate under Ark. Code Section 26-51-201(a), which Act 2 of the 2026 First Extraordinary Session cut to 3.7% for 2026, and DFA's 2026 estimated tax worksheet (revised May 8, 2026) uses 3.7% and 1.85%.

The entity's net taxable income under Arkansas income tax law, apportioned or allocated to Arkansas, for all members. Guaranteed payments to members are deductible, and net operating losses carry forward as allowed under Ark. Code Section 26-51-427.

Available for 2026. The Elective Pass-Through Entity Tax Act (Act 362 of 2021) applies to tax years beginning on or after January 1, 2022, and has no end date. New to PTET? See how the election works.

Deadlines

These dates are for a calendar-year business. Pay at least two business days early, since state payment sites slow down on deadline days.

Electing, step by step

Deadline: Before the due date of the 2026 return, including extensions. The original due date is April 15, 2027 (a Thursday).

Start with 2025 Form AR362-E, from the Arkansas Department of Finance and Administration.

1. Get approval from members holding more than 50% of the entity's voting rights. The election then binds all members.
2. Complete Form AR362-E (Arkansas Pass-Through Entity Income Tax Election Form): tax year begin and end dates, FEIN, name and address, type of organization, and responsible party.
3. Check the box under 'Pass-through entity making the ELECTION' to affirm the election was approved by members holding more than 50% of the voting rights.
4. Have an authorized partner, member, or corporate officer sign it, then mail it to the Pass-Through Entity Tax section or email it to passthrough.entitytax@dfa.arkansas.gov.
5. Instead of Form AR362-E, the entity can register for the pass-through entity tax in ATAP or simply file Form AR1100PET by the extended due date. Filing AR362-E early helps DFA match estimated payments.

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Paying the tax, step by step

Required if the tax is expected to exceed $1,000. Four installments of 25% of the required annual payment (the lesser of 90% of current-year tax or 100% of prior-year tax) are due April 15, June 15, and September 15, 2026, and January 15, 2027, on Form AR1100ESPET or in ATAP. Underpayments are subject to penalty and interest under Ark. Code Section 26-18-208.

What you need

• Nothing to set up. Arkansas Taxpayer Access Point (ATAP) takes payments without an account.
• The entity's FEIN (each electing entity must have its own).
• The installment amount from the AR1100ESPET worksheet (25% of the required annual payment).
• The business bank account routing and account numbers.

Start at Arkansas Taxpayer Access Point (ATAP), Arkansas's official site.

1. Go to ATAP at www.atap.arkansas.gov. Registration is not required to make a payment, and registered users can log in instead.
2. Choose the option to make a payment.
3. Select the pass-through entity tax account, the correct payment type (estimated, extension, or return payment), and the 2026 tax year.
4. Enter the bank account details and submit, then keep the confirmation.
5. To pay by check, mail an estimate with the Form AR1100ESPET voucher, or a return balance with the Form AR1100PTV voucher.

Filing the return: Form AR1100PET, due April 15, 2027 for calendar year 2026. The 2025 instructions say a federal extension moves the filing date to one month after the federal extended due date, but tax is still due by the original due date. An S corporation does not file Form AR1100S for a year it files Form AR1100PET.

Claiming the credit

Members exclude from Arkansas gross income their pro rata share of the income that was subject to the PET; there is no credit. The entity reports each member's share on page 4 of Form AR1100PET and on Form AR K-1. Nonresident members whose only Arkansas income is from entities that paid the PET do not have to file an Arkansas return.

Good to know

• Arkansas residents also exclude their share of income on which an entity paid a substantially similar PTET to another state (DFA publishes a list of those states for 2026). Income apportioned to a state without a similar tax stays taxable in Arkansas, with a credit for tax paid there.
• Nonresident withholding under Ark. Code Section 26-51-919 does not apply to an electing entity's distributive shares, and the PET is separate from the composite return.
• Arkansas income tax credits earned by the entity can be applied against the PET at the entity's election; credits earned by members cannot offset it.
• Salaries, guaranteed payments, rent, interest, and royalties paid to members are not covered by the exclusion and stay taxable to residents, and to nonresidents to the extent sourced to Arkansas.
• If the entity does not pay in full, DFA can assess the tax against the members based on their pro rata shares.
• Paying your personal Arkansas estimates? See how to pay Arkansas estimated taxes.
• Business in more than one state? Each state has a guide of its own.

Official sources

Checked October 2026 against the Arkansas Department of Finance and Administration's own publications and Ark. Code Section 26-65-101 et seq. (rate in Section 26-65-103; member exclusion in Section 26-51-404(b)); 26 CAR Section 133-101 et seq. (Arkansas Elective Pass-Through Entity Tax Rule).

• Act 362 of 2021 (HB 1209), Elective Pass-Through Entity Tax Act
• Act 2 of the 2026 First Extraordinary Session (SB 1), top individual rate cut to 3.7% for 2026
• 2026 Pass-through Estimated Tax vouchers and instructions (AR1100ESPET, worksheet revised May 8, 2026)
• 2025 Pass-Through Entity Tax instructions (Form AR1100PET)
• Arkansas Elective Pass-Through Entity Tax Rule (26 CAR Part 133)
• DFA list of states with similar pass-through entity taxes, tax years beginning in 2026
• 2025 Form AR362-E, Pass-Through Entity Income Tax Election Form
• DFA Pass-Through Entity Tax forms page
• Arkansas Taxpayer Access Point (ATAP)

This guide is for general education and reflects rules as of October 2026. Tax law and agency websites change, and your situation may have details that change the answer. Please talk with your tax professional before acting on it.