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| State Abbreviation: | AZ |
| State Tax Withholding State Code: | 04 |
| Basis For Withholding: |  Based on state taxable wages |
| Acceptable Exemption Form: | A-4 |
| Acceptable Exemption Data: | 1.3, 1.8, 2.7, 3.6, 4.2, 5.1 |
| TSP Deferred: | Yes |
| 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 1.3% of the amount withheld for state income tax, if the annual wages are less than $15,000, or 1.8% of the
amount withheld for state income tax, if the annual wages are greater
than or equal to $15,000. An employee required to have 1.3% deducted may elect to increase this rate to 1.8%, 2.7%, 3.6%, 4.2%, or
5.1% by submitting a Form A−4. An employee required to have
1.8% may elect to increase this rate to 2.7%, 3.6%, 4.2%, or
5.1%.by submitting a Form A−4.
The old rates will convert to the new Arizona state rates. 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. |
| Additional Information: | None |
| Additional Resources: | TAXES 10-19, Arizona State Income Tax Withholding |
Withholding Formula (Effective Pay Period 15, 2010)
- 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: |
| 1.3%1 |
| 1.8% |
| 2.7%2 |
| 3.6% |
| 4.2% |
| 5.1% |
| 1Only valid if estimated annual wages are less than $15,000. Otherwise, 1.8% will be used. 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.