1.26 Ark. Code R. 51-409(c)(1)
All resident and nonresident shareholders of corporations that have elected to be taxed by Arkansas as S Corporations and who receive a share of the corporation's income, loss, deductions or credits, must file an Arkansas individual income tax return reporting the share so received. However, a nonresident shareholder of such a corporation shall only be required to file an Arkansas individual income tax return if some or all of his share of the corporation's income, loss, credits or deductions are attributable to Arkansas sources. When an Arkansas return is required to be filed, the nonresident must report all of his gross income on his Arkansas nonresident return pursuant to ACA 26-51-435 and ACA 26-51-504. Moreover, a shareholder's share of S Corporation income attributable to Arkansas is subject to Arkansas income tax whether or not it is actually distributed to the shareholder.
1.26 Ark. Code R. 51-409(c)(1)