An employer must withhold Arizona income tax from employees whose compensation is for services performed within Arizona. All wages, salaries, bonuses or other compensation paid for services performed in Arizona are subject to state income tax withholding, with exceptions.No employer may withhold or divert any portion of an employee's wages unless one of the following applies: 1. New employees must fill out an Arizona Form A4 within five days of employment. To stop income withholding order when both parties agree. You may use the forms on this page if the following factors apply to your situation. In addition to the federal income tax withholding form, W4, each employee needs to fill out an Arizona State income tax withholding form, A4. Withholding without resort to legal action. Arizona Industrial Commission, Arizona Workers Compensation, Arizona OSHA, Arizona Labor Laws. Than zero for at least 1 of the 4 preceding calendar quarters. •.