Withholding Highlights

2024 HIGHLIGHTS

 

Electronic Filing of Withholding Tax Returns

Withholding returns shall be filed electronically for taxable years beginning from and after December 31, 2019, or when the Department establishes an electronic filing program.

For 2024, the Department has three methods by which employers may file Form A1-APR electronically. These methods are:

  • An employer may register at https://efile.aztaxes.gov/AZFSETPortal [AZ Web File (ASFSET)] to bulk-file its return by uploading a .csv file.
  • An employer may register at https://aztaxes.gov/Home/Page (AZTaxes) and use the data input method to submit its return.
  • Registered transmitters of AZ Web File (AZFSET) can bulk-file using the transmission method.

Any employer who is required to file its withholding return electronically may apply to the director for an annual waiver from the electronic filing requirement pursuant to Arizona Revised Statutes (A.R.S) § 43-325(F). The waiver may be granted, which may be renewed for one subsequent year, if any of the following apply:

  • The employer has no computer.
  • The employer has no internet access.
  • Any other circumstance considered to be worthy by the director.

A waiver is not required if the withholding return cannot be electronically filed for reasons beyond the employer’s control, including situations in which the employer was instructed by the Internal Revenue Service (IRS), or the Department to file by paper.

Please contact the Department at [email protected] if you need assistance in electronically submitting your Arizona withholding return.

 

Submitting Federal Forms W-2, W-2c, W-2G and 1099 (with Arizona withholding) to the Department

Federal Forms W-2, W-2c, W-2G and 1099 are an integral part of the reconciliation process required for Arizona Form A1-APR.

  • Submit all federal Forms W-2 and W-2c reporting Arizona wages paid and/or Arizona income tax withheld.
  • Submit federal Forms W-2G and/or 1099 reporting Arizona income tax withheld. Federal Forms W-2G and 1099 NOT reporting Arizona income tax withheld are not required to be submitted to the Department.

For calendar year 2024, electronic filing of the required federal Attachments is mandatory. An employer may submit supported federal Attachments to the Department by:

  • Logging into AZTaxes at https://aztaxes.gov/Home/Page to use the data input method, or to upload the supported federal forms as a .txt file.
  • Logging into AZ Web File (AZFSET) at https://efile.aztaxes.gov/AZFSETPortal to upload the supported federal forms as a .txt file.
  • Using a registered transmitter to bulk-file via the transmission method.

Employers with a valid federal or Arizona waiver or exemption from electronically filing their returns, or employers submitting unsupported federal Forms may submit the required federal Attachments by paper or on a CD, DVD or flash drive (Optical Media).

NOTE: The Department does not support the electronic filing of all federal withholding forms (e.g. W-2 series, 1099 series). See Pub 701, Submitting Arizona Forms A1-R, or A1-APR, and Federal Forms W-2, W-2c, W-2G and 1099, for a list of the required federal withholding forms that are currently supported by the Department for electronic filing.
Any unsupported federal forms reporting Arizona wages or Arizona income tax withheld must be filed as Optical Media or as paper forms using Form A1-T.

Employers filing Form A1-R or Form A1-APR electronically must submit the supported federal forms electronically through AZTaxes, AZ Web File (AZFSET), or by a registered transmitter.

Federal forms not supported by the Department must be submitted by CD, DVD, or flash drive (Optical Media), or as paper forms. To submit these forms, complete and mail Form A1-T to the address on the form. Include the Optical Media or the paper forms with your submission. When submitting Form A1-T, do not include a paper copy of the return. If submitting by Optical Media, see the Section below labeled, “Optical Media” for instructions.

Employers filing Form A1-R or Form A1-APR by paper may submit the required federal forms electronically through AZTaxes, or AZFSET. If the employer does not submit the supported federal forms electronically, all required federal forms must be attached to Form A1-APR as either Optical Media or as paper forms. If submitting by Optical Media, see the Section below labeled “Optical Media” for instructions. If submitting a paper return, mail the return to:

Arizona Department of Revenue
PO Box 29009
Phoenix, AZ 85038-9009

 

Electronic Funds Transfer

Employers are required to pay their tax liability by electronic funds transfer (EFT) if the employer owes $500 or more for any taxable year beginning from and after December 31, 2020.

An employer may apply to the director for an annual waiver from the electronic payment requirement. The application must be received by December 31 of each year. The director may grant the waiver if any of the following applies:

  • The employer has no computer.
  • The employer has no internet access.
  • Any other circumstance considered to be worthy by the director exists, including:
    • The employer has a sustained record of timely payments, and
    • No delinquent tax account with the Department.

To request a waiver, submit Form 292, Electronic Filing and Payment Waiver Application, to the Department.

NOTE: An employer who is required to pay by EFT but who fails to do so is subject to a penalty of 5% of the amount of the payment not made by EFT. See A.R.S. § 42-1125(O).
For additional information on electronic funds transfer, refer to A.R.S. § 42-1129 and the related Arizona Administrative Code rules (A.A.C. R15-10-301 through R15-10-307) for detailed information.