Payroll Software Accommodates Arizona Income Tax Withholding Changes

The state of Arizona has made changes to the state income tax withholdings

. Amounts withheld will no longer be a percentage of federal withholding. Wages paid after June 30, 2010 are subject to a table prescribe by the Arizona Department of Revenue.

All employees whom are now subject to Arizona withholding need to complete a new A-4 or A-4V. The new rates are not automatically applied to wages paid after June 30, 2010. Current employees must complete a new Employees Arizona Withholding Percentage Election which includes a table to help choose their new withholding rate. The revised form is available from the Arizona Department of Revenue.

A new employee must complete the revised 2010 Arizona Form A-4 within the first five days of employment to elect an Arizona withholding percentage. If the new employee does not complete the revised Arizona Form A-4, the employer will withhold Arizona income tax from the employees gross taxable wages at 2.7%.

Resident employees, current or new, who are subject to Arizona income tax withholding, must submit a new A-4 or A-4V as well.

A third group affected by the withholding change is persons collecting annuity or pension payments. These individuals must complete a revised A-4P Form.

The new withholding percentage rates take affect for wages paid after June 30, 2010. The following rates are a percentage of the employees gross taxable wages: New AZ withholding rates are as follows 1.3% (available to employees whose annual wages are less than $15,000), 1.8%, 2.7%, 3.6%, 4.2% and 5.2%.

Arizona payroll software can be made simple with small business payroll software. Automatically updating payroll software takes the worry and hassle out of such situations as tax table changes. Receive updates, generate payroll, and create checks and payroll reports with Payroll Mate, payroll software.

For more information about Arizona payroll software, tax forms and payroll reports visit the Payroll Mate website.

by: Lisa H

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