Arizona tax changes for 2010-2011

Effective with paychecks dated July 16, 2010, Arizona's payroll tax deductions will be changing. Through June 27, 2010, Arizona withholding was a percentage of the amount of federal income tax withheld. Beginning June 28, 2010, Arizona withholding is 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.

All employees must complete a new Form A-4 to elect a different Arizona withholding percentage or to change the additional amount designated to be withheld from each paycheck.

If an employee does not complete a new form, the withholding percentage will be automatically set at 2.7% of the employee's gross taxable wages, until the employee completes a new form. Employees who wish to increase or decrease the amount of Arizona withholding must complete the form to change the withholding percentage or change the additional amount designated to be withheld each paycheck.

To elect your new withholding percentage:

  1. Login to UAccess Employee
  2. Go to: Self Service > Payroll and Compensation > A-4 Tax Information
  3. Make Election
  4. Click "Submit"
  5. Click "OK" to complete the approval process

The following documents will help you determine which new percentage to elect, or any additional amount you wish to have withheld. If you have further questions, please contact the Payroll Office at 621-9097. Please note that the Payroll Office cannot provide any tax advice.