The Department has revised Arizona Form A‑4 effective for wages paid after December 31, 2010. The changes include:
Providing an additional withholding percentage of 0.8%. Previously available percentages are unchanged.
Removal of the $15,000 annual compensation threshold. All seven withholding percentage rates are available to all employees, regardless of annual compensation.
Relaxing the exemption requirements. The employee only has to expect that there will be no Arizona tax liability in the current taxable year (instead of not having a liability in the prior year and not expecting one in the current year). However, this withholding exemption election will need to be renewed annually, similar to federal requirements.