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Version: 1.7.3

Arizona Payroll Tax Compliance

Employers in Arizona must meet three key payroll compliance obligations: state income tax withholding, unemployment insurance (UI), and new hire reporting.

Each requirement has its own forms, deadlines, and reporting rules established by the state agencies. The sections below provide a clear overview of these obligations.

Arizona Withholding Tax Requirements​

Arizona employers are required to withhold state income tax from employee wages and file returns with the Arizona Department of Revenue (ADOR). Employers must register for an Arizona withholding tax account before filing returns. Withholding returns must generally be filed electronically, and employers must file a return even if there was no Arizona withholding liability for the reporting period.

Forms required​

Form A1-QRT

  • Filed quarterly by employers that are required to file quarterly withholding returns.
  • Used to reconcile Arizona income tax withheld and deposited during the quarter.
  • Due on April 30, July 31, October 31, and January 31 for the four quarters, respectively.
  • Employers with zero Arizona withholding liability for the quarter must still file Form A1-QRT.
  • Employers that have made all required payments on time for the previous quarter may receive an additional 10 days to file.

TaxBandits API supports the automation of A1-QRT. See how it works

Form A1-R

  • Filed annually by employers that file Form A1-QRT.
  • Used to reconcile the total Arizona income tax withheld during the calendar year.
  • Due January 31 of the following year.
  • Federal Forms W-2 and W-2c reporting Arizona wages or withholding, along with applicable Forms W-2G and 1099 reporting Arizona withholding, are submitted as part of the reconciliation process.

Form A1-APR

  • Used by employers and other entities that are eligible to file and pay Arizona withholding tax on an annual basis.
  • Serves as both the annual withholding payment return and reconciliation.
  • Due January 31 of the following year.
  • Federal Forms W-2, W-2c, W-2G, and applicable Forms 1099 must be submitted with the annual filing.

Arizona Unemployment Insurance (UI) Requirements​

Employers determined liable for Arizona unemployment insurance coverage must report employee wages and unemployment insurance information to the Arizona Department of Economic Security (DES) each quarter. Quarterly Unemployment Tax and Wage Reports must be filed even when no wages were paid during the quarter.

The state requires Form UC-018 for Unemployment Insurance tax reporting.

  • Filed quarterly to report employee wages, covered workers, and the Arizona unemployment insurance tax due.
  • Due on April 30, July 31, October 31, and January 31 for the four quarters, respectively.
  • Required even if no wages were paid during the quarter.
  • The report includes employee wage information and is used to calculate the unemployment insurance tax due.

Arizona New Hire Reporting​

  • Employers must report all newly hired and rehired employees to the Arizona New Hire Reporting Center within 20 days of the employee's hire date.
  • New hire reporting helps Arizona locate noncustodial parents and enforce child support obligations.
  • The reporting requirement applies to both newly hired and rehired employees.