Live in Arkansas, Work Remotely for a Arizona Employer: Who Taxes You?
Answer
Your home state takes it and the work state does not. Arizona levies no tax on wages; Arkansas taxes residents on all income regardless of where it was earned. The result is a single Arkansas resident return covering the full amount, with no offsetting credit.
Last verified
Crossing into a state with no income tax does not lower your tax bill, because your home state is not taxing you on where you work — it is taxing you on where you live. Arkansas reaches all of a resident's income, and Arizona adds nothing on top.
What you file
- 1Resident return · Arkansas
File a Arkansas resident return reporting all of your income.
The two states, side by side
| Arkansas | Arizona | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form AR1000NR | Form 140NR |
| Credit for other-state tax | Form AR1000TC | Form 309 |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | Arkansas Department of Finance and Administration | Arizona Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Arizona and working in Arkansas gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Arkansas → ArizonaBoth states — credit offsets the double tax
- 1099 contractor: Arkansas → ArizonaHome state, plus the client state if you work there
- Moved mid-year: Arkansas → ArizonaTwo part-year returns
Other Arkansas pairs
Questions people actually ask
I live in Arkansas and work remotely for a Arizona employer. Which state do I pay?
Your home state takes it and the work state does not. Arizona levies no tax on wages; Arkansas taxes residents on all income regardless of where it was earned. The result is a single Arkansas resident return covering the full amount, with no offsetting credit.
Which state should my employer be withholding for?
Arkansas. Your employer should withhold Arkansas tax rather than Arizona tax on these wages. If a Arizona line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my Arizona employer's location alone create a Arizona tax obligation?
No. Arizona sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside Arizona are a different matter — those are Arizona-source income and can require a nonresident return.
How current is this?
The Arkansas and Arizona rules on this page were last checked against Arkansas Department of Finance and Administration and Arizona Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Arkansas Department of Finance and Administration — individual income taxaccessed 2026-08-07
- Arizona Department of Revenue — individual income taxaccessed 2026-08-07