# Ark. Code Ann. § 26-51-409: Federal Subchapter S adopted > Arkansas · Statutes · In force URL: https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-409 ## Section - **Citation:** Ark. Code Ann. § 26-51-409 - **Heading:** Federal Subchapter S adopted - **Jurisdiction:** Arkansas - **Kind:** Statutes - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** AR Code / Title 26 / Chapter 51 / Subchapter 4 / Section 26-51-409 ## Text (a) Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., as in effect on January 1, 2019, regarding small business corporations, is adopted for the purpose of computing Arkansas income tax liability. (b) (1) (A) A corporation shall be treated as a Subchapter S corporation for Arkansas income tax purposes if the corporation has elected Subchapter S treatment for federal income tax purposes for the same tax year. (B) An election made under Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., for federal income tax purposes is deemed to have been made for Arkansas income tax purposes. (2) A corporation that has elected to be treated as a Subchapter S corporation for federal income tax purposes shall not elect to be treated as a Subchapter C corporation for Arkansas income tax purposes. (3) When filing an Arkansas Subchapter S income tax return, a corporation shall attach to its Arkansas Subchapter S income tax return a complete copy of the corporation's federal Subchapter S income tax return filed with the Internal Revenue Service for that taxable year. (c) (1) However, all nonresident shareholders of Subchapter S corporations receiving a prorated share of income, loss, deduction, or credit pursuant to the provisions of this section must file a properly executed state income tax return with the Secretary of the Department of Finance and Administration and remit the applicable state income tax due. (2) Failure to so report and remit on the part of any nonresident shareholder shall be grounds upon which the secretary may revoke the corporation's Subchapter S election and collect the tax from the corporation by any manner authorized by the Income Tax Act of 1929, § 26-51-101 et seq. Amended by Act 2019, No. 910,§ 3713, eff. 7/1/2019. Amended by Act 2019, No. 870,§ 3, eff. for tax years beginning on or after 1/1/2019. Amended by Act 2017, No. 434,§ 1, eff. for tax years beginning on and after 1/ 1/2018. Amended by Act 2017, No. 884,§ 16, eff. 8/1/2017. Amended by Act 2017, No. 155,§ 15, eff. for tax years beginning on and after 1/1/2015. Amended by Act 2015, No. 580,§ 15, eff. for tax years beginning on or after January 1, 2014. Amended by Act 2013, No. 1254,§ 5, eff. 8/16/2013, op. retroactively to tax years beginning on or after 1/1/2012. Acts 1979, No. 414, § 1; 1983, No. 51, §§ 1, 3; A.S.A. 1947, § 84-2004.1; Acts 1987, No. 382, § 3; 1989, No. 826, § 22; 1991, No. 685, § 2; 1993, No. 785, § 7; 1997, No. 951, § 17; 1999, No. 1126, § 24; 2003, No. 663, § 7; 2005, No. 261, § 1; 2005, No. 675, § 6; 2007, No. 218, § 18; 2007, No. 380, § 1; 2009, No. 372, § 10; 2011, No. 787, § 15. (a) Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., as in effect on January 1, 2019, regarding small business corporations, is adopted for the purpose of computing Arkansas income tax liability. 97, No. 951, § 17; 1999, No. 1126, § 24; 2003, No. 663, § 7; 2005, No. 261, § 1; 2005, No. 675, § 6; 2007, No. 218, § 18; 2007, No. 380, § 1; 2009, No. 372, § 10; 2011, No. 787, § 15. (a) Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., as in effect on January 1, 2019, regarding small business corporations, is adopted for the purpose of computing Arkansas income tax liability. (b) (1) (A) A corporation shall be treated as a Subchapter S corporation for Arkansas income tax purposes if the corporation has elected Subchapter S treatment for federal income tax purposes for the same tax year. (B) An election made under Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., for federal income tax purposes is deemed to have been made for Arkansas income tax purposes. (2) A corporation that has elected to be treated as a Subchapter S corporation for federal income tax purposes shall not elect to be treated as a Subchapter C corporation for Arkansas income tax purposes. (3) When filing an Arkansas Subchapter S income tax return, a corporation shall attach to its Arkansas Subchapter S income tax return a complete copy of the corporation's federal Subchapter S income tax return filed with the Internal Revenue Service for that taxable year. (1) (A) A corporation shall be treated as a Subchapter S corporation for Arkansas income tax purposes if the corporation has elected Subchapter S treatment for federal income tax purposes for the same tax year. (B) An election made under Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., for federal income tax purposes is deemed to have been made for Arkansas income tax purposes. (A) A corporation shall be treated as a Subchapter S corporation for Arkansas income tax purposes if the corporation has elected Subchapter S treatment for federal income tax purposes for the same tax year. (B) An election made under Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., for federal income tax purposes is deemed to have been made for Arkansas income tax purposes. (2) A corporation that has elected to be treated as a Subchapter S corporation for federal income tax purposes shall not elect to be treated as a Subchapter C corporation for Arkansas income tax purposes. (3) When filing an Arkansas Subchapter S income tax return, a corporation shall attach to its Arkansas Subchapter S income tax return a complete copy of the corporation's federal Subchapter S income tax return filed with the Internal Revenue Service for that taxable year. (c) (1) However, all nonresident shareholders of Subchapter S corporations receiving a prorated share of income, loss, deduction, or credit pursuant to the provisions of this section must file a properly executed state income tax return with the Secretary of the Department of Finance and Administration and remit the applicable state income tax due. (2) Failure to so report and remit on the part of any nonresident shareholder shall be grounds upon which the secretary may revoke the corporation's Subchapter S election and collect the tax from the corporation by any manner authorized by the Income Tax Act of 1929, § 26-51-101 et seq. (1) However, all nonresident shareholders of Subchapter S corporations receiving a prorated share of income, loss, deduction, or credit pursuant to the provisions of this section must file a properly executed state income tax return with the Secretary of the Department of Finance and Administration and remit the applicable state income tax due. d by the Income Tax Act of 1929, § 26-51-101 et seq. (1) However, all nonresident shareholders of Subchapter S corporations receiving a prorated share of income, loss, deduction, or credit pursuant to the provisions of this section must file a properly executed state income tax return with the Secretary of the Department of Finance and Administration and remit the applicable state income tax due. (2) Failure to so report and remit on the part of any nonresident shareholder shall be grounds upon which the secretary may revoke the corporation's Subchapter S election and collect the tax from the corporation by any manner authorized by the Income Tax Act of 1929, § 26-51-101 et seq. Amended by Act 2019, No. 910,§ 3713, eff. 7/1/2019. Amended by Act 2019, No. 870,§ 3, eff. for tax years beginning on or after 1/1/2019. Amended by Act 2017, No. 434,§ 1, eff. for tax years beginning on and after 1/ 1/2018. Amended by Act 2017, No. 884,§ 16, eff. 8/1/2017. Amended by Act 2017, No. 155,§ 15, eff. for tax years beginning on and after 1/1/2015. Amended by Act 2015, No. 580,§ 15, eff. for tax years beginning on or after January 1, 2014. Amended by Act 2013, No. 1254,§ 5, eff. 8/16/2013, op. retroactively to tax years beginning on or after 1/1/2012. Acts 1979, No. 414, § 1; 1983, No. 51, §§ 1, 3; A.S.A. 1947, § 84-2004.1; Acts 1987, No. 382, § 3; 1989, No. 826, § 22; 1991, No. 685, § 2; 1993, No. 785, § 7; 1997, No. 951, § 17; 1999, No. 1126, § 24; 2003, No. 663, § 7; 2005, No. 261, § 1; 2005, No. 675, § 6; 2007, No. 218, § 18; 2007, No. 380, § 1; 2009, No. 372, § 10; 2011, No. 787, § 15. ## Nearby sections - [Ark. Code Ann. § 26-51-401 Tax year - Accounting method](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-401.md) - [Ark. Code Ann. § 26-51-402 Tax year - Basis for determining liability](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-402.md) - [Ark. Code Ann. § 26-51-403 Income generally](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-403.md) - [Ark. Code Ann. § 26-51-404 Gross income generally](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-404.md) - [Ark. Code Ann. § 26-51-405 Partnership income](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-405.md) - [Ark. Code Ann. § 26-51-406 Income to beneficiaries of trusts and estates](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-406.md) - [Ark. Code Ann. § 26-51-407 Financial institutions](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-407.md) - [Ark. Code Ann. § 26-51-408 Dividends of financial institutions taxable](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-408.md) - [Ark. Code Ann. § 26-51-409 Federal Subchapter S adopted](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-409.md) - [Ark. Code Ann. § 26-51-410 Inventory](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-410.md) - [Ark. Code Ann. § 26-51-411 Gain or loss - Sale of property](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-411.md) - [Ark. Code Ann. § 26-51-412 Gain or loss - Exchange of property](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-412.md) - [Ark. Code Ann. § 26-51-413 Corporate liquidations](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-413.md) - [Ark. Code Ann. § 26-51-414 Deferred compensation plans](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-414.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-409. Check the current official text before relying on it. Not legal advice.