Tax rate used in calculating Arizona state tax for year 2023
State Abbreviation: |
AZ
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State Tax Withholding State Code: |
04
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Basis For Withholding: |
>Based on state taxable wages<
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Acceptable Exemption Form: |
A-4
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Acceptable Exemption Data: |
>0.5, 1.0, 1.5, 2.0, 2.5, 3.0, 3.5<
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TSP Deferred: |
No
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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.
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Additional Information: |
None
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Withholding Formula >(Arizona Effective 2023)<
- 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 Arizoona State tax wages.
- Determine the annual Arizona income tax withholding by applying the following guideline.
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in house payroll tax solution for Arizona small businesses here.
How to Calculate Arizona State Income Tax Withholdings Automatically
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