If you make this election, your employer will not withhold Arizona income tax from your wages for payroll periods beginning after the date you file the form. Zero withholding does not relieve you from paying Arizona income taxes that might be due at the time you file your Arizona income tax return.
NOTE: An amended Form A1-QRT can only be electronically filed through by a PSC or by an employer filing through a registered transmitter. All other employers required to file an amended Form A1-QRT must file a paper return.
The employee completes this form to notify his/her employer of the amount of Arizona withholding to be taken from his/her paycheck.
Withholding of Arizona state income tax from the commencement of employment is required for any resident employee physically working in the state of Arizona regardless of where the employer is based.
The employee should complete Form A-4 electing their withholding percentage and return it to the employer. Arizona law requires every employer to withhold Arizona income tax from those employees for services provided within Arizona.
Note: Under-withholding can result in you owing tax and/or underpayment penalties when you file your Arizona return at the end of the year. For tax year 2023 and beyond, the tax rate for Arizona taxable income is 2.5%.
To register for both an income tax withholding account with the Department of Revenue and an unemployment insurance account with the Department of Economic Security, the employer will need to complete the JT-1 application on AZTaxes or complete the form and return the completed form to the department.
To elect an Arizona withholding percentage, an employee must complete Arizona Form A-4, and submit it to their employer. You may request to have an additional amount withheld by their employer. You may change the withholding amount by completing Arizona Form A-4 to change the previous withholding amount or percentage.
Example: Single filer earning $70,000 Your total tax bill would be $10,453. If you divide $10,453 by your taxable income of $70,000, you get an effective tax rate of just under 15 percent, which is lower than your 22 percent top, or marginal, tax bracket.
Withholding percentage options. Keep in mind for tax year 2023 and beyond, the tax rate for Arizona taxable income is 2.5%.