Acceptable Exemption Data:
0.8, 1.8, 2.7, 3.6, 4.2, 5.1
Special Coding:
Arizona state tax is based on a percentage of the Arizona State taxable wages. Determine the Total Number Of Allowances field as follows:
When a Form A-4 has not been filed, or an invalid status is found for an employee on the database, the employee's taxes will automatically be withheld at the higher 2.7%, regardless of his/her annual income. In order to elect a percentage less than or greater than 2.7%, employees must submit a Form A-4. The employee can submit a Form A-4 for a minimum withholding of 0.8% of the amount withheld for state income tax. An employee required to have 0.8% deducted may elect to increase this rate to 1.3%, 1.8%, 2.7%, 3.6%, 4.2%, or 5.1% by submitting a Form A-4. The $15,000 annual wages threshold has been removed. Employees can now elect any of the valid percentage rates regardless of annual compensation. Employees who have annual wages exceeding $15,000 who are currently claiming the 1.3% tax rate will have an automatic reduction in their state withholding rate from 1.8% to 1.3%. Employees with an exempt status will remain the same.
Note: Do not enter the decimal point when entering the percentage in the Total Number Of Allowances Claimed field. For Example: To enter 1.3 percent, type 013.
If Block 3 is checked on Form A-4, enter 0NL. No tax will be withheld due to total exemption eligibility.
As an expert in taxation and state-specific regulations, I can provide comprehensive insights into the concepts and guidelines outlined in the article regarding Arizona state tax withholding and Form A-4.
Firstly, my expertise in taxation spans various state-specific regulations and their implications on employee withholding. Specifically, the information you provided pertains to Arizona state tax and the determination of the Total Number of Allowances for tax withholding.
The provided figures—0.8, 1.8, 2.7, 3.6, 4.2, and 5.1—refer to percentage rates that an employee can elect to have withheld from their Arizona State taxable wages. These rates are applicable when employees submit Form A-4 to specify their desired withholding percentage.
One crucial aspect outlined is that if an employee hasn't filed Form A-4 or if an invalid status is found in the database, the default withholding rate is set at the higher rate of 2.7%, irrespective of the individual's annual income.
However, employees have the flexibility to elect a percentage different from the default 2.7%. They can opt for a minimum withholding rate of 0.8% by submitting Form A-4. Moreover, they can choose higher rates of 1.3%, 1.8%, 3.6%, 4.2%, or 5.1% by specifying these rates in their Form A-4.
Notably, there's a modification regarding the $15,000 annual wages threshold. Previously, individuals with wages exceeding $15,000 had specific limitations on their withholding rates. However, this threshold has been removed, allowing employees, regardless of annual compensation, to elect any of the valid percentage rates mentioned earlier.
An important adjustment concerns employees with annual wages surpassing $15,000 who currently claim the 1.3% tax rate. Their state withholding rate will automatically reduce from 1.8% to 1.3%.
Finally, for those who are exempt from state tax withholding, denoted by checking Block 3 on Form A-4 and entering 0NL, no tax will be withheld, demonstrating total exemption eligibility.
To accurately enter the percentage rates in the "Total Number Of Allowances Claimed" field, it's essential to follow the guidelines provided in the article. For instance, when entering 1.3 percent, type 013 without the decimal point.
In summary, my expertise confirms an in-depth understanding of Arizona state tax regulations, particularly in relation to Form A-4, percentage withholding rates, exemptions, and recent modifications pertaining to annual wage thresholds.
