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Summary of differences between federal and state regulations
Income tax withholding
An employer must make its Arizona withholding payments to the department either on a quarterly basis or at the same time as the employer makes its federal withholding deposits. An employer must file a quarterly withholding tax return with the department to report its Arizona withholding tax liability. An employer incurs an Arizona withholding tax liability either quarterly or on the same dates as it incurs a federal withholding liability (monthly, semi-weekly, or one-banking day). An employer must determine when it incurs an Arizona withholding tax liability to establish its correct Arizona withholding payment schedule. An employer makes this determination by calculating its average Arizona withholding tax liability for the four preceding calendar quarters or by using an alternate calculation if it does not have historical data for the preceding four calendar quarters.
Arizona law requires an employer, at the beginning of each new quarter, to compute its average Arizona withholding tax liability for the preceding four calendar quarters. This calculation is performed to determine the correct Arizona withholding payment schedule. An employer that has four full consecutive calendar quarters of Arizona withholding liability historical data must use the regular withholding payment schedule computation. An employer that does not have four full consecutive calendar quarters of Arizona withholding liability historical data must use the alternate withholding payment schedule computation.
Unemployment taxes
All states finance UC primarily through contributions from subject employers on the wages of their covered workers. In addition, three states (Alaska, New Jersey, and Pennsylvania) collect contributions from employees. These taxes are deposited by the state to its account in the UTF in the Federal Treasury, and are withdrawn as needed to pay benefits.
Many states have adopted a higher tax base than what is provided in FUTA. Hawaii's wage base is usually higher and changes periodically. In all states, an employer pays a tax on wages paid to each worker within a calendar year up to the amount specified in state law. In addition, most of the states provide an automatic adjustment of the wage base if federal law is amended to apply to a higher wage base than that specified under state law. As a result of the many variables in states taxable wage bases and rates, benefit formulas, and economic conditions, actual tax rates vary greatly among the states and among individual employers within a state.
Wages subject to unemployment tax in Arizona equal $7,000.
Minimum and maximum rates in Arizona are 0.9 and 10.8 %. Rates apply to experience rated employers only and do not include applicable surtaxes or penalties.
State
Contacts
Income tax withholding
Department of Revenue
Unemployment taxes
Department of Economic Security
Regulations
Income tax withholding
Title 15. Revenue: Chapter 2. Department Of Revenue; Income And Withholding Tax Section
Unemployment taxes
Title 6. Economic Security; Chapter 3. Department Of Economic Security Unemployment Insurance
Federal
ContactsInternal Revenue Service
Regulations Title 26 Code of Federal Regulations, Internal Revenue