Arizona State Income Tax Information
|State Tax Withholding State Code:||04|
|Basis For Withholding:||Based on state taxable wages|
|Acceptable Exemption Form:||A-4|
|Acceptable Exemption Data:||0.8, 1.8, 2.7, 3.6, 4.2, 5.1|
|Special Coding:||Arizona state tax is based on a percentage of the Arizona State taxable wages. Determine the Total Number Of Allowances field as follows:
When a Form A-4 has not been filed, or an invalid status is found for an employee on the database, the employee's taxes will automatically be withheld at the higher 2.7%, regardless of his/her annual income. In order to elect a percentage less than or greater than 2.7%, employees must submit a Form A-4. The employee can submit a Form A-4 for a minimum withholding of 0.8% of the amount withheld for state income tax. An employee required to have >0.8% deducted may elect to increase this rate to 1.3%, 1.8%, 2.7%, 3.6%, 4.2%, or 5.1% by submitting a Form A-4. The $15,000 annual wages threshold has been 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% tax rate will have an automatic reduction in their state withholding rate from 1.8% to 1.3%. Employees with an exempt status will remain the same.
Note: Do not enter the decimal point when entering the percentage in the Total Number Of Allowances Claimed field. For Example: To enter 1.3 percent, type 013.
If Block 3 is checked on Form A-4, enter 0NL. No tax will be withheld due to total exemption eligibility.
|Withholding Formula (Effective Pay Period 12, 2011)|
- Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
- Subtract the nontaxable biweekly Federal Health Benefits Plan payment(s) (includes dental and vision insurance program, and flexible spending account - health care and dependent care deductions) from the amount computed in Step 1.
- Add the taxable biweekly fringe benefits (taxable life insurance, etc.) to the amount computed in Step 2 to obtain the adjusted gross biweekly wages.
- Multiply the biweekly Arizona state taxable wages by 26 to obtain the annual Arizona State tax wages.
- Determine the annual Arizona income tax withholding by applying the following guideline.
|Multiply the Arizona State Taxable Wages by:|
1 The $15,000 annual wage threshold has been removed. Employees who have annual wages exceeding $15,000 who are currently claiming the 1.3% tax rate will have an automatic reduction in their state withholding rate from 1.8% to 1.3%.
2 The default rate will be 2.7% when a valid Form A-4 is not on file or the employee does not submit one.
- Divide the annual Arizona income tax withholding by 26 to obtain the biweekly Arizona income tax withholding.