Arizona Tax

Deltek Modification Date - 1/18/23

The Arizona state tax is based on a percentage of the taxable wage. Employees subject to the Arizona state tax must indicate whether they want the state to withhold 0%, 1.0%, 1.5%, 2.0%, 2.5%, 3.0%, 3.5%, or 0.5% of the taxable wage.

Enter the following information on the Withholding grid on the Payroll tab of the Employee Info Center:

Field	Description
Status	Arizona’s tax calculations do not use the Status field.
Exemptions	Enter the percentage of taxable wage desired by the employee, as indicated on Arizona Employee Withholding Certificate, Form A-4. Options are: 0 — 0% of taxable wage 1 — 1.0% of taxable wage 2 — 1.5% of taxable wage 3 — 2.0% of taxable wage 4 — 2.5% of taxable wage 5 — 3.0% of taxable wage 6 — 3.5% of taxable wage 7 — 0.5% of taxable wage Vision does not check this field. Any number other than 0, 1, 2, 3, 4, 5, 6 or 7 will be recognized as 0%. Select a filing status of Both if the employee has chosen an Arizona withholding rate of 1.5% on their Arizona Withholding Percentage Election (A-4) form. If the employee did not submit Form A-4, enter 0 in this field.
Other Exemptions	Arizona’s tax calculations do not use the Other Exemptions field.

How Vision Calculates Tax

To calculate an employee's Arizona State tax, Vision does the following:

1. Multiplies the employee's gross pay per pay period by the number of pay periods in a year to determine annualized gross wages.

2. Subtracts the employee's 401(k) and 125/Cafeteria plan contributions from the employee's annualized gross wages to determine taxable income.

3. Applies the percentage indicated by the employee to the taxable wage, yielding the net income tax for Arizona.

4. Divides the annual income tax by the number of pay periods in a year to determine the amount to be withheld for the pay period.