Updated October 16, 2026. Quick answer: Only if you ask. Arizona withholding on a pension or annuity payment is voluntary: you request it on Form A-4P, and the form says “You may terminate your voluntary Arizona withholding election at any time”.
Arizona pension withholding at a glance
| Item | What the documents say |
|---|---|
| Is state withholding required on regular pension payments? | No. Arizona withholds only if you request it |
| Default rate if you give the payer no form | No default. If you elect withholding you check one percentage from 0.5% to 3.5% in 0.5% steps |
| Lump sum or one-time payment | The documents read do not give a separate lump-sum rule |
| Form to start, change or stop it | Arizona Form A-4P, given to the payer (not mailed to the Department of Revenue) |
| Changed for 2026? | No change stated; the A-4P read is the 2025 edition |
What the Arizona documents say
Arizona’s Form A-4P lets a retiree ask the payer to withhold Arizona income tax from a pension, annuity or retirement account distribution, but only to the extent the payment is includable in Arizona gross income. The form says a payment that is not includable, such as a Roth IRA, cannot be the subject of a request. Without the form nothing is withheld for Arizona.
On the form you check one percentage, from 0.5% to 3.5% in steps of 0.5%, and you may add an extra amount per payment. To stop, you check the termination box on a new Form A-4P. The form says to give it to the payer, not to the Department of Revenue.
The legislature’s statute, A.R.S. 43-404, is the authority the form cites for withholding from a retirement account distribution.
What a mover should know
This page is about Arizona as a state of residence. An instruction line written for a nonresident or part-year filer is not the rule for a resident, and none of the documents read settles a part-year or two-state case, so check each state’s own rule. The federal side is the same everywhere; CMG’s federal 20% withholding on a pension lump sum page covers it, state tax withholding on IRA and 401(k) withdrawals in Arizona covers the account side, and state withholding on retirement withdrawals lists the other states checked.
What the documents do not say
- The documents read give no separate rule for a lump sum. The Form A-4P read is the 2025 edition and the documents describe no 2026 change.
Common mistakes
- Assuming the payer is withholding for the state because it withholds for the IRS: in a voluntary state nothing is withheld until you give the payer the state’s form.
- Assuming the answer for one state applies to another, or that state withholding settles the state tax owed at filing.
Related: state tax withholding on IRA and 401(k) withdrawals in Arizona, Arizona retirement taxes, whether Arizona taxes pensions, state withholding on retirement withdrawals, and retirement withholding calculator.
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Answer againSources
- Request for Arizona Voluntary Income Tax Withholding on Retirement Income (Arizona Form A-4P, 2025): https://azdor.gov/sites/default/files/document/FORMS_WITHHOLDING_2025_A-4P_f.pdf
- IRS Tax Topic 413, Rollovers from retirement plans: https://www.irs.gov/taxtopics/tc413
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.