Arizona · Payroll closure
Close an Arizona payroll tax account.
Arizona has the strangest closing rules of any state we file in. The Department of Revenue cancels your withholding account through a checkbox on the final return rather than a separate form. The Department of Economic Security only accepts a voluntary termination request between January 1 and March 31.
Last updated:
Who you are dealing with
Arizona Department of Revenue
- Handles:
- Employer withholding account
- System:
- AZTaxes
- Form:
- The final withholding return itself. On Form A1-APR, check Box C, Final Return (CANCEL ACCOUNT), enter the date final wages were paid, and complete Part 6. Quarterly filers use A1-QRT
Arizona Department of Economic Security, Unemployment Insurance Tax
- Handles:
- Unemployment insurance employer account
- System:
- DES Employer Registration Unit
- Form:
- A written request for voluntary termination, accepted only between January 1 and March 31. Suspension is the alternative if you expect employees again
Arizona Department of Economic Security, Unemployment Insurance Tax, payroll closure
State fee. $0. Arizona does not charge to cancel a withholding account or to terminate unemployment coverage. Termination of coverage does not relieve you of liability for unpaid taxes, which Arizona states directly.
Our fee. $180 per state, flat. State fees are passed through at cost.
When you have to close or cancel
On the Revenue side, the trigger is your final wage payment, and the date goes on the return. On the DES side, voluntary termination requires that you did not meet any of the conditions requiring unemployment tax payment in the prior calendar year, and the request has to land in the January to March window.
Final returns come first
The final return is the cancellation. Check Box C, Final Return (CANCEL ACCOUNT), on Form A1-APR, enter the date final wages were paid, and complete Part 6. If you file the final return without checking that box, the return is accepted and the account stays open.
How long it takes
Arizona does not publish a processing time for either action. The constraint here is not speed, it is the calendar. A voluntary DES termination requested in April waits until the following January.
What we do
We confirm which accounts are open, file any outstanding final returns, submit each cancellation, and follow up until every agency confirms in writing. You keep the client. We never email them.
Opening an account in another state instead? State payroll tax registration covers the withholding and unemployment accounts payroll software will not open.
What makes Arizona harder than average
- A three month window, once a year. The Department of Economic Security accepts a voluntary termination request only between January 1 and March 31, and only if you did not meet any of the conditions requiring unemployment tax payment in the prior calendar year. Miss it and the request waits until next January.
- The cancellation hides on the return. There is no separate cancellation form for withholding. If the box is not checked, you have filed a perfectly good final return and cancelled nothing, and there is no error message to tell you so.
- Terminated accounts cannot be reopened. If you later meet the conditions requiring unemployment tax again, Arizona does not reactivate the old account. You apply for a new one, and the account history goes with the old number.
- Suspension is often the better answer, and nobody offers it to you. If you expect employees again, DES can suspend the account instead. The quarterly report forms and annual rate notices stop, and your experience rating stays intact. That is usually what a seasonal or pausing employer actually wants.
Dissolving the company is not the same as closing the tax accounts
Articles of dissolution leave the withholding, unemployment, and sales tax accounts open, and those agencies keep expecting returns until each one is closed with them. That is the separate filing that stops the notices.
How Arizona compares
Every state closes them differently. The table compares Arizona with the other states we have documented, agency by agency.
For CPAs and bookkeepers
Send the state, the last payroll or sale date, and the account numbers. The written confirmations come back to you. We do not dissolve the company and we do not take over payroll.
Questions and answers
Why is my Arizona unemployment account still open?
Most likely because the voluntary termination request fell outside the window. Arizona accepts those only between January 1 and March 31. A request sent in any other month does not get processed early, it waits.
How do I cancel my Arizona withholding account?
Through the final return. On Form A1-APR check Box C, Final Return (CANCEL ACCOUNT), enter the date final wages were paid, and complete Part 6. There is no separate cancellation form, which is why accounts get left open by people who filed everything correctly except the box.
Should I terminate or suspend the unemployment account?
If you expect to have employees in Arizona again, suspension keeps your experience rating intact and stops the quarterly report forms and annual rate notices. Termination is permanent, and a terminated account cannot be reopened. We can request either one, though which is better for your situation is a business decision rather than something we advise on.
Does terminating clear what I owe?
No. Arizona states that termination of coverage and the account does not relieve you of liability for unpaid taxes. The account status and the balance are separate.
What do you need from me to start?
The legal name and FEIN, the eight digit Unemployment Insurance account number, the Arizona withholding account number, the date final wages were paid, and whether you expect to employ in Arizona again. That last one decides terminate versus suspend.
Also in Arizona
Agency details verified 2026-08-03
Sources
About the provider
Regcrest LLC is a document preparation and filing service based in Allentown, Pennsylvania, founded in 2026. It prepares and files state payroll and sales tax registrations, account closures, and resale certificates on behalf of the businesses that instruct it, and works behind accounting firms, bookkeepers, and payroll providers as well as directly with businesses.
Regcrest LLC is not a CPA firm and not a law firm. It gives no tax or legal advice. It files in all 50 states, and publishes a full page for the 29states it has verified against the agency's own material so far, each one showing the date it was checked. For anything that turns on your specific situation, ask a licensed accountant or attorney.