Check the amount of your tax withholding to avoid a surprise at tax time. Too few deductions means a bigger paycheck, but a lower refund or even tax owed. 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 tax
- Lifestyle – You got married, divorced, gave birth or adopted a child, bought a house, retired, or filed for Chapter 11 bankruptcy.
- Wage income – You or your spouse start or stop working or add a second job.
- Taxable income not subject to withholding tax – You earned interest income, dividends, capital gains, self-employment income, or IRA distributions (including some Roth IRAs).
- Income adjustments – You added the IRA deduction, student loan interest deduction, or child support expenses.
- Itemized tax deductions or credits – You include on your return medical expenses, taxes, interest expenses, charitable donations, dependent care expenses, education credit, credit child tax or earned income credit.
- Changes in Tax Rates – 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 tax
To change the amount of Arizona income tax withheld, you must complete Arizona Form A-4 and submit it to your employer to choose another withholding percentage option. For more information on federal withholding, please see Federal Form W-4. Taxpayers should consider the facts of their situation and adjust the election accordingly.
The Withholding Tax Calculator helps identify your tax deduction to ensure you have the correct amount of tax withheld from your paycheque. Taxpayers can use the calculator results to complete Form A-4 and adjust income tax withholding.
Keep in mind that the results from the calculator will only be as accurate as the information you provide. If your situation changes during the year, recalculate with the new information to make sure your deduction is still correct.
Note: Insufficient withholding may result in tax and/or underpayment penalties when you file your return in Arizona. The absence of withholding does not exempt you from paying any Arizona income taxes that may be due when you file your Arizona tax return.
Hold Percent Options
The rates are a percentage of the taxable gross salary. Taxpayers can select 0.8%, 1.3%, 1.8%, 2.7%, 3.6%, 4.2% or 5.2%.
