Withholding Taxes: Arizona

Federal law and guidance on this subject should be reviewed together with this section.

Authors: Paige A. Martin and Mary Grace McNear, Kutak Rock LLP

Summary

• Wages paid to Arizona residents who work in the state are subject to withholding. An employee is an Arizona resident for income tax purposes if certain criteria are met. Arizona income tax must also be withheld from wages paid to certain Arizona nonresident employees for services performed in the state. See Withholding on Residents, Nonresidents and Expatriates.
• Arizona employers determine withholding using Form A-4, Employee's Arizona Withholding Election, and federal Form W-4. Employers may elect not to withhold taxes from employees' wages during the month of December. See Employee Withholding Forms.
• Arizona does not have special provisions regarding withholding from supplemental wages, such as bonuses. See Supplemental Wages.
• Each year employers must provide copies of federal Form W-2, Wage and Tax Statement, to each employee from whom any amount of Arizona income tax was withheld. See Form W-2 Reporting Requirements.
• Employers are required to keep records of wages paid and taxes withheld. See Recordkeeping Requirements.