We want to let you know that Arizona Form A-4 has been modified because the previous Form A-4 is no longer representative of new lower income tax rates.
The details:
In the 2021 legislative session, Arizona enacted Senate Bill 1828 (SB 1828), which significantly reduced individual tax rates starting with the 2022 tax year.
The Arizona Department of Revenue (ADOR) is requiring all employees to complete and submit the revised Form A-4 beginning with the 2023 tax year. If an employee does not submit an updated state income tax withholding election, employers must withhold Arizona income tax at the default rate of two percent.
Frequently Asked Questions provided by the ADOR state:
· Employers have until Jan. 31, 2023, to make the revised Form A-4 available to employees.
· Employers may implement the change immediately upon an employee’s submission of the revised Form A-4 and do not need to wait until Jan. of 2023.
· Employers should retain a copy of the employee’s revised Form A-4. The form should NOT be sent to the ADOR.
· If the employer should utilize a substitute electronic Form A-4 rather than paper, the electronic form can be updated to reflect the new withholding percentage.
Next steps:
We are in the process of updating your payroll system for the revised Form A-4 and expect that practitioner and employee self-service will be available on Jan. 19, 2023. In the meantime, your employees’ 2022 withholding elections will remain in place for all pay dates in 2022. Beginning with pay dates in 2023, your employees’ withholding for state income tax will be defaulted to 2 percent as required by Arizona. If you have an employee who needs to modify their 2023 withholding rate before self-service is available, please contact your ADP® service representative.
To access the revised Arizona Form A-4 and Instructions, please click on the link provided below and select the 2023 Form Year.
https://azdor.gov/forms/withholding-forms/arizona-withholding-percentage-election
Have questions?
Please contact your HR Business Partner with any questions.