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Employment Taxes - Arizona Job Training Tax (JTT)

Important note about your taxes: The statutes requiring employers to pay the Arizona Job Training Tax (A.R.S. § 23-769, and 41-1544) have been repealed effective January 1, 2016.

Question: What are the changes in Senate Bill 1471 and when do these changes go into effect?

Response: The table below outlines the policy impacted, the current rules, the Senate Bill 1471 changes and the effective date of the changes.

Rule Impacted	Current	Senate Bill 1471 Change	When
Arizona Job Training Tax (JTT)	Effective January 1, 2001, Arizona law imposed a 0.10% Job Training Tax on taxable wages. Unless certain exempt criteria apply, all Arizona Unemployment Insurance (UI) taxpayers are subject to pay JTT on taxable wages.	Arizona UI Taxpayers are no longer subject to pay JTT on taxable wages.	Effective for taxable wages submitted for Q1/2016 or later. Q1 = (Jan, Feb, March)
UI Tax Payment Due Less Than $9.99 Exemption **New changes effective 8/6/2016	From and after December 31, 2004, the payment of combined contributions and JTT is not required if the total quarterly amount of the contributions is less than ten dollars ($9.99 or less).	The $9.99 exemption no longer applies. All Arizona UI Taxpayers must pay the total UI Tax owed regardless of the amount. **House Bill 2222 Changes – effective 8/6/2016 reinstated the exemption for contributions less than $10.	Effective for taxable wages submitted for Q1/2016 or later. **House Bill 2222 Changes - Effective for taxable wages submitted for Q3/2016 or later, and retroactive to Q12016 or later.

Rule Impacted

Current

Senate Bill 1471 Change

When

Arizona Job Training Tax (JTT)

Effective January 1, 2001, Arizona law imposed a 0.10% Job Training Tax on taxable wages.

Unless certain exempt criteria apply, all Arizona Unemployment Insurance (UI) taxpayers are subject to pay JTT on taxable wages.

Arizona UI Taxpayers are no longer subject to pay JTT on taxable wages.

Effective for taxable wages submitted for Q1/2016 or later.

Q1 = (Jan, Feb, March)

UI Tax Payment Due Less Than $9.99 Exemption

**New changes effective 8/6/2016

From and after December 31, 2004, the payment of combined contributions and JTT is not required if the total quarterly amount of the contributions is less than ten dollars ($9.99 or less).

The $9.99 exemption no longer applies. All Arizona UI Taxpayers must pay the total UI Tax owed regardless of the amount.

**House Bill 2222 Changes – effective 8/6/2016 reinstated the exemption for contributions less than $10.

Effective for taxable wages submitted for Q1/2016 or later.

**House Bill 2222 Changes - Effective for taxable wages submitted for Q3/2016 or later, and retroactive to Q12016 or later.

Arizona Job Training Tax Historical Information

Beginning January 1, 2001, Arizona law imposed a 0.10% Job Training Tax (JTT) on taxable wages (taxable wages are the first $7,000 in gross wages paid to each employee in a calendar year—maximum $7 JTT per employee per year). The JTT is not part of an employer's Federal Unemployment Tax (FUTA) certification or Arizona Unemployment Insurance (UI) experience rating or included in the UI Tax rate. Reporting and paying JTT mirrors the Arizona UI Tax process. The JTT is entered on Line 7, Part C of the quarterly Unemployment Tax and Wage Report (UC-018). (Employers who qualify for and have elected the Reimbursement payment option in lieu of paying UI Tax are exempt from the JTT.)

All UI taxpayers are subject to JTT on taxable wages they pay from July 1, 2011 through June 30, 2012 but the following UI taxpayer groups are exempt from JTT on taxable wages they paid prior to July 1, 2011 and on taxable wages they pay between June 30, 2012 and December 31, 2015:

Employers with a positive reserve ratio of at least 13 percent
Employers with a positive reserve ratio of at least 12 percent
Employers assigned the new employer tax rate
Employers with a negative reserve ratio

View JTT-exempt UI Tax rates for current and prior years (185 KB PDF) that correspond to the above groups.

The JTT funds the Arizona Job Training Program administered by the Arizona Commerce Authority. It is a job-specific reimbursable grant program that supports the design and delivery of customized training plans for employers creating new jobs or increasing the skill and wage levels of current employees.

Questions pertaining to the Job Training Program can be directed to the Arizona Commerce Authority.

Questions pertaining to the Job Training Tax can be directed to:

Experience Rating Unit
Arizona Department of Economic Security
(602) 771-6603
Email: [email protected]

Related Links:

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Employment Taxes - Arizona Job Training Tax (JTT)