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Arizona Revised Statutes Title 43. Taxation of Income § 43-404. Extension of withholding to pensions, annuities, retirement accounts; definitions

Current as of January 01, 2025 | Updated by Findlaw Staff

A. For the purposes of this title, a payment from a pension or annuity or a distribution from a retirement account to an individual, if at the time the payment or distribution is made a request by the individual that such pension, annuity, retirement account be subject to withholding under this section is in effect, shall be treated as if it were a payment of wages by an employer to an employee for a payroll period.

B. A request that payment from a pension or annuity or distribution from a retirement account be subject to withholding under this section shall be made by the payee in writing to the person that is making the pension or annuity payments or retirement account distributions and shall be accompanied by a form, prescribed by the department, executed in accordance with § 43-401, subsection E. Such a request may be denied or terminated by furnishing to the person making the payment or distribution a written statement of denial or termination.

C. Distributions from a retirement account are eligible for withholding, but only to the extent that amount is includable in the Arizona gross income of the individual who receives the distribution.

D. A request to initiate, adjust or terminate withholding under this section may be executed in writing by paper or electronic means on either a paper form prescribed by the department or the form's electronic equivalent.

E. For the purposes of this section:

1. “Annuity” means either of the following:

(a) An employee annuity authorized under the internal revenue code paid to an individual, but only to the extent that the amount is includable in the Arizona gross income of such individual.

(b) Specified income payable at stated intervals to an individual for a fixed or contingent period, often for that individual's life, but only to the extent that the amount is includable in the Arizona gross income of such individual.

2. “Pension” means either of the following:

(a) A defined benefit plan authorized under the internal revenue code paid to an individual, but only to the extent that amount is includable in the Arizona gross income for such individual.

(b) Periodic, fixed amount retirement payments made by the United States military, the United States civil service or a state or local government or a private employer to former employees and surviving spouses of former employees for prior services performed, but only to the extent that amount is includable in the Arizona gross income of such individuals.

3. “Retirement account” includes:

(a) A qualified retirement plan under sections 401, 403 and 457 of the internal revenue code.  1

(b) An individual retirement account under section 408 of the internal revenue code, including a simplified employee pension fund as defined in section 408(k) of the internal revenue code and a simple retirement account as defined in section 408(p) of the internal revenue code.

1 Internal Revenue Code sections may be found in Title 26 of U.S.C.A.
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Cite this article: FindLaw.com - Arizona Revised Statutes Title 43. Taxation of Income § 43-404. Extension of withholding to pensions, annuities, retirement accounts; definitions - last updated January 01, 2025 | https://codes.findlaw.com/az/title-43-taxation-of-income/az-rev-st-sect-43-404/

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