Influence Your Tax Bill or Refund Next Tax Season through Withholding

Phoenix, AZ—Check your withholding amount to avoid a surprise at tax time. Too little withheld means a bigger paycheck but a smaller refund or even tax due. Too much can mean you won’t have use of the money until you receive a tax refund.

When to Check or Change Your Withholding

• Lifestyle - You got married, divorced, gave birth or adopted a child, purchased a home, retired, or filed chapter 11 bankruptcy.
• Wage income - You or your spouse start or stop working or add a second job.
• Taxable income not subject to withholding - You earned interest income, dividends, capital gains, self-employment income, or IRA (including certain Roth IRA) distributions.
• Adjustments to income - You added IRA deduction, student loan interest deduction, or alimony expense.
• Itemized deductions or tax credits - You are including medical expenses, taxes, interest expenses, gifts to charity, dependent care expenses, education credit, child tax credit, or earned income credit on your return.
• Tax rate changes - You are subject to new tax rates due to changes in federal or state tax laws; new tax rates may impact your overall tax due.

How to Change Your Withholding

To change the amount of Arizona income tax withheld, you must complete Arizona Form A-4 and submit it to your employer to choose a different withholding percentage option. For information about federal withholding, please see federal Form W-4. Taxpayers should consider the facts of their situation and adjust the election accordingly.

The Withholding Calculator helps identify your tax withholding to ensure you have the right amount of tax withheld from your paycheck. Taxpayers can use the results from the calculator to help complete Form A-4 and adjust the income tax withholding.

Keep in mind that the calculator’s results will only be as accurate as the information you provide. If your circumstances change during the year, recalculate with the new information to make sure that your withholding is still correct.

Note: Underwithholding can result in you owing tax and/or underpayment penalties when you file your Arizona return. Zero withholding does not relieve you from paying Arizona income taxes that might be due when you file your Arizona income tax return.

Withholding Percentage Options

Rates are a percentage of the gross taxable wages. Taxpayers can select 0.8%, 1.3%, 1.8%, 2.7%, 3.6%, 4.2%, or 5.2%.

*For 2023, taxpayers can select 0.5%, 1.0%, 1.5%, 2.0%, 2.5%, 3.0%, or 3.5%.

Tuesday, June 14, 2022