Vox

Musings, rants, rambling, general nonsense

Arizona Tax Changes

Posted on | June 5, 2010 | 2 Comments

This applies to you only if you live in Arizona and collect a paycheck – or if you issue them. I put the legalese below, but the cliff notes version is: Arizona State Withholding tax will be figured with a new and mysterious formula, starting July 1, 2010 (And by ‘mysterious’, I mean a percentage – a tricky idea for some)

Your employer should have already given you a new A-4 to fill out, ensuring both your, and their, compliance with the law. If they haven’t, I suggest you download the form yourself and deliver it to the HR department. Currently, the lowest withholding rate is 10.7%; with the revised formulation, the highest rate is 5.1%. If your employer processes the payroll correctly for the second half of the year, but doesn’t have your new A-4 info, you will be sending a lot more money to the Capital than you must.

Senate Bill 1185 Employer Information
Mandatory Changes to Arizona Withholding
Revised for wages paid after June 30, 2010.

Senate Bill 1185 (Laws 2009, 1st Reg. Session, Chapter 2) amended the amounts required to be withheld for Arizona withholding purposes. Through June 30, 2010, the amount required to be withheld was a percentage of federal withholding. For amounts withheld on or after July 1, 2010, the amount required to be withheld will no longer be a percentage of federal withholding. Amounts withheld on or after July 1, 2010, must be based on a table prescribed by the department.

The department has prescribed a withholding table based on a percentage of gross taxable wages. “Gross taxable wages” is the amount that meets the federal definition of “wages” contained in IRC § 3401 and that will be included in box 1 of the employee’s federal Form W-2 at the end of the calendar year (i.e. gross wages net of pretax deductions, such as the employee’s portion of health insurance premiums).

Employees subject to Arizona income tax withholding must fill out a new form that will go into effect on July 1, 2010, and give the completed form to their employer.

Resident employees working in Arizona and nonresident employees subject to Arizona income tax withholding should complete a revised Arizona Form A-4 and give the completed form to their employer.

To ease the transition, the department has included examples on each form to assist employees in making a new election.

There you have it. Even less interesting than most of my posts, but kind of important for you to know.

You’re welcome 🙂



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Category: AZ, General, work

Comments

2 Responses to “Arizona Tax Changes”

  1. mzvrwc
    June 5th, 2010 @ 10:39 pm

    Thanks for explaining this Vox! I got an email from my employer a couple of weeks ago, and I’ve been meaning to sit down and figure this out.

  2. Vox
    June 5th, 2010 @ 10:59 pm

    Not sure I explained it so well, but hopefully it helped.

    🙂

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