The Arkansas Renter Refund Act aims to provide a financial benefit to residential tenants through an income tax credit. This legislation introduces a new section to the Arkansas Code, specifically 26-51-518, which allows eligible taxpayers to claim a credit of $500 against their income tax. To qualify for this credit, a taxpayer must rent their primary residence for the entire tax year, have a net income of less than $40,000, and not be claimed as a dependent on another taxpayer's income tax return. Additionally, the credit amount cannot exceed the taxpayer's income tax due for the year.

The act is set to take effect for tax years beginning on or after January 1, 2025. This initiative is designed to support low-income renters by providing them with a tax relief option, thereby enhancing their financial stability and encouraging responsible renting practices.