United States Department of Agriculture

Office of the Chief Financial Officer

National Finance Center

P.O. Box 60000 New Orleans Louisiana 70160

TAXES 11-23, Arizona State Income Tax Withholding

Beginning with wages paid for Pay Period 12, 2011, the National Finance Center (NFC) will make the following changes to the State of Arizona income tax withholdings:

• An additional withholding percentage of 0.8 percent will be added to the percentages that can be elected for withholding.
• The $15,000 annual wages threshold will be removed. Employees can now elect any of the valid percentage rates regardless of annual compensation. Employees who have annual wages exceeding $15,000 who are currently claiming the 1.3 percent tax rate will have an automatic reduction in their state withholding rate from 1.8 percent to 1.3 percent.

Note: If the employee chooses to use another percentage rate, he/she must file a new Arizona Form A-4, Employee's Arizona Withholding Percentage Election, (see attachment) indicating his/her selection.

When entering the Arizona state tax percentage, enter the percentage rate as shown below. Precede with a zero, but do not enter the decimal point.

To view the updated tax formula, go to NFC's Home Page (www.nfc.usda.gov) and click the Publications link at the top of the page. At the Publications page right-hand menu, click Tax Formulas and select the appropriate state from the map provided. Changes to the tax formula are identified by " ."

For questions about NFC processing, contact the Payroll/Personnel Call Center (Option 3, then Option 1) at 1-800-981-3026 or the EmpowHR Help Desk at 1-888-367-6955.

/s/
RANDY L. SPEED, Director
Government Employees Services Division

Attachments