Arizona Income Tax Instruction Packet
Packet of instructions for filling out your Arizona Form 140 tax return.
We last updated the Income Tax Instruction Packet in April 2016, so this is the latest version of Form 140 Instructions, fully updated for tax year 2015. You can download or print current or past-year PDFs of Form 140 Instructions directly from TaxFormFinder. You can print other Arizona tax forms here.
Extracted from PDF file 2015-arizona-form-140-instructions.pdf, last modified October 2015
Income Tax Instruction PacketArizo ona Form m 140 201 15 Reside ent Perso onal Incom me Tax Return R For information or help, ca all one of the numbers s listed d: Phoennix (60 02) 255-3381 From m area codes 520 and 928, tolll-free (80 00) 352-4090 Tax fforms, instructions, and d other tax information If youu need tax form ms, instruction ns, and other taax information,, go to the departmen nt’s website at www.azdor.go w ov. Income Tax Proc cedures and Rulings Thesee instructions may refer to the t departmentt’s income tax x proceedures and rulin ngs for more in nformation. To o view or printt these,, go to our website w and cliick on Legal Research R then n click on Proceduress or Rulings an nd select a tax x type from thee drop down menu. Publications and d Brochures To viiew or print the department’ss publications and brochures,, go to our website an nd click on Pub blications. Leave the Paper P Behin nd - e-file! Quicker Refunds R Accurate e Proof of Acceptance A Free ** No m more paper, matth errors, or maailing delays iff you e-file! Get yyour refund quiicker with direcct deposit. E-filee today, pay by b April 18, 2016, 2 to avoid d penalties and d intereest. E-filee through an authorized a IRS S/DOR e-file provider p or by y usingg your personall computer and d the Internet. Visit our website at www.azdor.go ov for a listing of approved e-file prroviders and on n-line filing sourrces. ** F For free e-fille requirementts, go to ou ur website att www w.azdor.gov. Who o Must Use e Form 140 0? You ((and your spou use, if married filing a joint reeturn) may filee Form m 140 only iff both of you u are full yeaar residents off Arizoona. You must use Forrm 140 rather than Form 140A 1 or Form m 140EZ to file for 20 015 if any of th he following ap pply to you: Y Your Arizona taxable income is $50,0 000 or more,, rregardless of filing status. Y You are making g adjustments to t income. Y You itemize deeductions. Y You claim tax credits other than the famiily income tax x ccredit, the creedit for increeased excise taxes, or thee pproperty tax creedit. Y You are claimin ng estimated payments. Do Y You Have to File? Arizzona Filing R Requirements s These rules s apply to all Arizona tax xpayers. Youu must file if youu are: Single Married filingg joint Married filingg separate Head of household and your Arizona addjusted gross incom me is at least: $ 5,500 or yoour gross incom me is at least: $11,000 $15,0000 $ 5,500 $15,0000 $ 5,500 $15,0000 $15,0000 If yyou are an Arrizona residennt, you must rreport income from m all sources inncluding out-oof-state incomee. To see if you haave to file, figgure your grosss income the me as you wouuld figure youur gross incom me for federal sam incoome tax purpooses. Then, yyou should exxclude income Arizzona law does not tax. Incoome Arizona laaw does not taxx includes: ment obligations, interest from U.S. Governm ty retirement bbenefits receiveed under Title social security II of the Sociaal Security Actt, benefits receiived under the Railroad Retirement Act, or pay receivedd for active seervice as a m member of the Reserves, Nattional Guard or the U.S. Arm med Forces. Youu can find youur Arizona adjuusted gross inccome on page 2, liine 42 of Arizoona Form 140. NOT TE: Even if youu are not requuired to file, yoou must still file a retuurn to get a reffund of any Arrizona income ttax withheld. Do You Have to File if Y You Are an n American n Indi an? You must file if yyou meet the Arizona filing requirementts unlesss all the follow wing apply to yyou: Y You are an enrrolled member of an Indian trribe. Y You live on thee reservation eestablished for that tribe. Y You earned alll of your incom me on that reserrvation. The department hhas issued a ruling on thhe Arizona tax x treatm ment of Ameriican Indians. T This ruling is IT TR 96-4. Do Y You Have to o File if You u Are the Spouse of an n Ame erican India an and You u Are Not an Enrolled d India an? You must file if you meet the Ariizona filing reqquirements. The deparrtment has isssued Income T Tax Ruling, IT TR 96-4, on the tax trreatment of spoouses of Amerrican Indians. Arizo 0 ona Form 140 Do Y You Have to o File if You u Are in the Military? Res sidency Sta atus You must file if you y meet the Arizona filing g requirementss unless all of the folllowing apply to o you: Y You are an acctive duty meember of the United Statess aarmed forces. Y Your only inco ome for the tax xable year is paay received forr aactive duty military service. T There was no Arizona A tax wiithheld from yo our active duty y m military pay. If Arrizona tax wass withheld from m your activee duty military y pay, yyou must file an a Arizona inccome tax returrn to claim any y refunnd you may be due d from that withholding. w You m must also file an Arizona in ncome tax retu urn if you havee any oother income beesides pay receeived for active duty military y servicce. If youu are an Arizon na resident and d you have to file f an Arizonaa returnn, you should d file using Form F 140. If you were an n Arizoona resident wh hen you entereed the service, you remain an n Arizoona resident, no matter where w stationeed, until you u establlish a new dom micile. As ann Arizona resid dent, you mustt report all of your y income to o Arizoona, no matterr where station ned. You must include yourr militaary pay, but using u Form 140, you may su ubtract all pay y receivved for active duty military y service; to th he extent it iss includded in your fed deral adjusted gross g income. If youu are not an Arizona A resident, but stationed in Arizona,, the foollowing appliees to you: Y You are not subject to Arrizona incomee tax on yourr m military pay. Y You must repo ort any other in ncome you eaarn in Arizona. U Use Form 140 0NR, Nonresiident Personal Income Taxx R Return, to report this income. To finnd out more, see our brochurre, Pub 704, Ta axpayers in thee Militaary. If yoou are not surre if you are aan Arizona ressident for state incom me tax purposees, we may be able to help. T The departmen nt has iissued Income Tax Procedurre, ITP 92-1, oon determining g residdency status. Res sidents You are a resident of Arizona iff your domicilee is in Arizonaa. Dom micile is the place where you hhave your perm manent home. It I is whhere you intennd to return iif you are liviing or working g tempporarily in another state or ccountry. If youu leave Arizona for a temporary perriod, you are sstill an Arizonaa resident while gonee. A resident iis subject to ttax on all income no matteer wherre the income iis earned. Partt-Year Resid dents If yoou are a part-yyear resident, you must file Arizona Form m 140P PY, Part-Yearr Resident Peersonal Income Tax Return n. You are a part-yearr resident if yoou did either oof the following g durinng 2015: Y You moved innto Arizona w with the intent of becoming a rresident. Y You moved ouut of Arizona with the intennt of giving up p yyour Arizona rresidency. Non nresidents If yoou are a nonressident, you muust file Arizonaa Form 140NR R, Nonrresident Personnal Income Taxx Return. Wha at if a Taxp payer Died d? If a taxpayer dieed before filiing a return for 2015, the taxpaayer's spouse oor personal reppresentative m may have to file and ssign a return fo for that taxpayeer. A personal representative can bbe an executorr, administratorr, or anyone w who is in charge of thee deceased taxxpayer’s properrty. If thee deceased taxxpayer did not have to file a return but had d tax w withheld, a retuurn must be fileed to get a refuund. The person who files the returrn should usee the form the taxpaayer would haave used. The person who ffiles the return n shoulld print the w word "deceasedd" after the deecedent's namee. Also enter the date of death after the decedent's name. If yoour spouse diedd in 2015 and you did not reemarry in 2015 or if your spouse ddied in 2016 beefore filing a rreturn for 2015 5, you m may file a joinnt return. If your spouse dieed in 2015, the joint return shouldd show your sspouse's 2015 income before deathh and your inccome for all off 2015. If yourr spouse died in n 20166, before filingg the 2015 reeturn, the jointt return should show w all of your inncome and all of your spouse's income fo or 20155. Print "Filing as surviving sspouse" in the area where you u sign the return. If ssomeone else iis the personal representativee, he orr she must alsoo sign the returnn. Find an Authorized A e-file Provider An authorized e-file pro ovider can tak ke the guesswork out of filing taxes. To find an authorized e--file der near you provid visit www w.azdor.gov If Yo ou Included d Your Child's Unearn ned Income e on Y Your Federa al Return, Does D Your Child Have e to Fiile an Arizo ona Return? ? No. IIn this case, th he child should d not file an Arizona A return. The parent must include i that same s income in his or herr Arizoona taxable income. Are Any Other Returns Re equired? You may also havee to file a fiducciary income taax return (Form m 141A AZ). For details about filing a fiduciary inccome tax return n, call tthe departmentt at (602) 255-33381. 2 Arizona Form 140 Claiming a Refund for a Deceased Taxpayer until December 15. If you file your 2015 Arizona calendar year return after October 17, your return will be late. If you are claiming a refund for a deceased taxpayer, you must complete Arizona Form 131, Claim for Refund on Behalf of Deceased Taxpayer. Place the completed Form 131 on top of the front of the return. NOTE: Because October 15, 2016, falls on a Saturday, you have until October 17, 2016, to file your return. If you are a fiscal year filer, your return is due on the 15th day of the fourth month following the close of your fiscal year. What are the Filing Dates and Penalties? When Should You File? What if You File or Pay Late? Your 2015 calendar year tax return is due no later than midnight, April 18. File your return as soon as you can after January 1, but no later than April 18. If you file or pay late, we will charge you interest and penalties on the amount you owe. If the U.S. Post Office postmarks your 2015 calendar year return by April 18, 2016, your return will not be late. You may also use certain private delivery services designated by the Internal Revenue Service (IRS) to meet the “timely mailing as timely filed” rule. NOTE: Because Emancipation Day (legal holiday) will be observed on April 15, 2016, you have until April 18, 2016, to file your return. Late Filing Penalty If you are a fiscal year filer, your return is due on the 15th day of the fourth month following the close of your fiscal tax year. If you file late, we will charge you a late filing penalty. This penalty is 4½% (.045) of the tax required to be shown on the return for each month or fraction of a month the return is late. This penalty cannot exceed 25% (.25) of the tax found to be remaining due. What if You Cannot File on Time? You may request an extension if you know you will not be able to file on time. Late Payment Penalty NOTE: An extension does not extend the time to pay your income tax. See the instructions for Arizona Form 204. If you pay your tax late, we will charge you a late payment penalty. This penalty is ½ of 1% (.005) of the amount shown as tax for each month or fraction of a month for which the failure continues. We charge this penalty from the original due date of the return until the date you pay the tax. This penalty cannot exceed a total of 10% (.10) of the unpaid tax. To get a filing extension, you can either Apply for a state extension (Arizona Form 204). To apply for a state extension, file Form 204 by April 18. See Form 204 for details. You do not have to include a copy of the extension with your return when you file, but make sure that you check box 82F on page 1 of the return. If you must make a payment, use Arizona Form 204, or visit www.AZTaxes.gov to make an electronic payment. Use your federal extension (federal Form 4868). File your Arizona return by the same due date. You do not have to include a copy of your federal extension with your return, but make sure that you check box 82F on page 1 of the return. Extension Underpayment Penalty If you file your return under an extension, you must pay 90% (.90) of the tax shown on your return by the return's original due date. If you do not pay this amount, we will charge you a penalty. This penalty is ½ of 1% (.005) of the tax not paid for each 30 day period or fraction of a 30 day period. We charge this penalty from the original due date of the return until the date you pay the tax. This penalty cannot exceed 25% (.25) of the unpaid tax. If we charge you the extension underpayment penalty, we will not charge you the late payment penalty under Arizona Revised Statutes (A.R.S.) § 42-1125(D). When Should You File if You Are a Nonresident Alien? The due date for your Arizona return is not the same as the due date for your federal return. Your Arizona return is due by April 18 even though your federal return is due on June 15. If you want to file your Arizona return after April 18, you must ask for a filing extension. You must file this request by April 18. Arizona will allow up to a 6-month extension. This will allow you to file your return by October 17. See Form 204 for extension filing details. If you have a federal 6-month extension, you can file your Arizona return under that extension. If you file using your federal extension, Arizona will also allow you an extra 6 months. Because we will allow only 6 months, the due date for your Arizona return is not the same as the due date for your federal return. In this case, your Arizona return will be due by October 17 even though your federal return will not be due NOTE: If you are subject to two or more of the above penalties, the total cannot exceed 25%. Interest We charge interest on any tax not paid by the due date. We will charge you interest even if you have an extension. If you have an extension, we will charge you interest from the original due date until the date you pay the tax. The Arizona interest rate is the same as the federal rate. When Should You Amend a Return? If you need to make changes to your return after you have filed, you should file Arizona Form 140X, Individual Amended Income Tax Return. You should file your amended return after your original return has processed. 3 Arizo ona Form 140 0 See the worksheett for Arizona Form 140ES to figure how w muchh your paymennts should be. For more infformation abou ut makiing estimated payments, seee the departm ment’s brochure (012)), Arizona Indiividual Estimatted Income Taxx Payments. Do n not file a new w return for th he year you are a correcting. Generally, you hav ve four years to o amend a retturn to claim a refunnd. If youu amend your federal return for any year, you must also o file ann Arizona Forrm 140X for th hat year. You must m file Form m 140X X within 90 day ys of the final determination d of o the IRS. If thee IRS makes a change to you ur federal taxab ble income forr any yyear, you mustt report that change to Arizona. You may y use onne of the follow wing two optio ons to report th his change. Wha at if You M Make Yourr Estimated d Payments s Late e? We w will charge youu a penalty if yyou fail to makke any required paym ments. We willl charge you a penalty if yoou make any of o your required paym ments late. Foor details, see Arizona Form m 221. Optiion 1 Can n You Make Estimated Payments Even if You u Do N Not Have To o? You may file a Forrm 140X for that t year. If yo ou choose thiss optionn, you must am mend your Arizzona return witthin 90 days off the final determinattion of the IRS S. Include a com mplete copy off the feederal notice with w your Form 140X. If yoou do not havve to make Arrizona estimatted income tax x paym ments, you mayy still choose too make them. For details, see Arizoona Form 140E ES. Optiion 2 You may file a copy of the fiinal federal no otice with thee deparrtment within 90 days of th he final determ mination of thee IRS. IIf you choose this t option, you u must includee a statement in n whichh you must: 1. R Request that the department recompute r yourr tax. 2. IIndicate if you agree or disagrree with the fed deral notice. If you do not agreee with the feederal notice, you y must also o includde any documeents that show why you do no ot agree. If youu choose optio on 2, mail the federal notice and any otherr docum ments to: Inndividual Incom me Audit Arrizona Departm ment of Revenu ue PO O Box 29084 Phhoenix, AZ 85 5038-9084 Line e-by-Line IInstruction ns Tips s for Preparring Your R Return M Make sure thatt you write youur SSN on yourr return. Do Y You Need to Make Estimated E Payments s in 2016? Youu must make Arizona A estimaated income taax payments duriing 2016 if: AND Youur filing AND statuus is: Your Arizona na Your Arizon gross incom me for gross income for 2015 was grreater 2016 is greater than: than: Marrried Filing Joinnt $150,000 $150,000 Singgle $75,000 $75,000 Heaad of Houusehold $75,000 $75,000 Marrried Filing Sepaarate $75,000 $75,000 C Complete yourr return using bblack ink. Y You must rouund dollar am mounts to the nearest whole ddollar. If 50 ceents or more, rround up to thee next dollar. If I lless than 50 ceents, round dow wn. Do not enteer cents. W When asked tto provide yoour own scheddule, include a sseparate sheet with your nam me and SSN at tthe top. Include yyour own schhedules with your return. Include these sschedules behiind your returnn and behind yyour Schedulees A A, if itemizingg. Y You must com mplete your feederal return bbefore you can n sstart your Arizzona return. M Make sure youu include your ddaytime telephhone number. IIf filing a fiscal year return,, fill in the perriod covered in n tthe space proviided at the top of the form. DO YOU U HAVE A COM MPLICATED RET TURN? e-file makess filing a complex rreturn simple! e-filee software offerss: eeasy step-by-stepp innstructions eerror detection beefore ffiling E Easy form selectiion M Maximum deducctions For a liist of approved ssoftware visitt www.azdoor.gov If you met the inccome threshold d for 2015, yo ou must makee estim mated paymentss during 2016 unless you aree sure you willl not m meet the threshold for 2016. As a full yearr resident, yourr Arizoona gross incom me is your fed deral adjusted gross income. This aamount is on page p 1, line 12 of the 2015 Fo orm 140. Enttering Yourr Name, Ad ddress, and SSN Line es 1, 2, and 3 NOT TE: Make suree that you writee your SSN on tthe appropriate line. 4 Arizona Form 140 Box 4 - Married Filing Joint Return Print or type your name, address, and SSN in the space provided. If you are filing a joint return, enter your SSNs in the same order as your names. If your name appears first on the return, make sure your SSN is the first number listed. If you are married filing separately, enter your name and SSN on the first line 1. Then enter your spouse’s name and SSN on the second line 1. If you are a nonresident of the United States or a resident alien who does not have an SSN, use the individual taxpayer identification number (ITIN) the IRS issued to you. If you are married and filing a joint return, check box 4. You may file a joint return if you were married as of December 31, 2015. It does not matter whether or not you were living with your spouse. You may file a joint return, even if you and your spouse filed separate federal returns. You may file a joint return if your spouse died during 2015 and you did not remarry in 2015. See page 2 of these instructions for details. The Arizona Form 140 is for full year residents only. You may not file a joint Arizona income tax return on Form 140 if any of the following apply: Your spouse is a nonresident alien (citizen of and living in another country). Your spouse is a resident of another state. Your spouse is a part-year Arizona resident. If filing a joint return with your nonresident spouse, you must file a joint return using Form 140NR. See Form 140NR instructions. If filing a joint return with your part-year resident spouse, you must file a joint return using Form 140PY. See Form 140PY instructions. NOTE: Make sure your SSN is correct. If you are filing a joint return, also make sure you enter your SSNs in the same order every year. Make sure that you enter your SSN on your return. Make sure that all SSNs are clear and correct. You may be subject to a penalty if you fail to include your SSN. It will take longer to process your return if SSNs are missing, incorrect, or unclear. Use your current home address. The department will mail your refund to, or correspond with you at that address. For a deceased taxpayer, see page 2 of these instructions. Foreign Addresses If you have a foreign address, enter the information in the following order: city, province or state, and country. Follow the country’s practice for entering the postal code. Do not abbreviate the country name. NOTE: The department has issued a ruling on filing a joint tax return with your part-year resident or nonresident spouse. This ruling is ITR 14-1. Last Names Used in Last 4 Prior Years Box 5 - Head of Household Return If the last name that you or your spouse are using on this return is not the same as the last name you or your spouse used on returns filed for the last 4 years, enter any other last name(s) that you or your spouse used when filing your return during the last 4 years. If you are filing as a head of household, check box 5 and enter the name of the qualifying child or dependent in the space provided. You may file as head of household on your Arizona return, only if one of the following applies: You qualify to file as head of household on your federal return. You qualify to file as a qualifying widow or widower on your federal return. Identification Numbers for Paid Preparers If you pay someone else to prepare your return, that person must also include an identification number where requested. A paid preparer may use any of the following: his or her PTIN, his or her SSN, or the EIN for the business. A paid preparer who fails to include the proper identification number may also be subject to a penalty. Box 6 - Married Filing Separate Return If you are filing a separate return, check box 6 and enter your spouse's name and SSN on the second line 1. If you were married as of December 31, 2015, you may choose to file a separate return. You may file a separate return, even if you and your spouse filed a joint federal return. Arizona is a community property state. If you file a separate return, you must figure how much income to report using community property laws. Under these laws, a separate return must reflect one-half of the community income from all sources plus any separate income. When you file separate returns, you must account for community deductions and credits on the same basis as community income. Both you and your spouse must either itemize or not itemize. If one of you itemizes, you both must itemize. If one of you takes a standard deduction, you both Determining Your Filing Status The filing status that you use on your Arizona return may be different from that used on your federal return. Use this section to determine your filing status. Check the correct box (4 through 7) on the front of Form 140. If you qualify as married for federal purposes, you qualify as married for Arizona purposes and must file using the status of either married filing joint or married filing separate. If you are single you must file as single or if qualified you may file as head of household (see the instructions for box 5). 5 Arizona Form 140 Your field of vision is 20 degrees or less. If your eye condition is not likely to improve beyond the conditions listed above, you can get a statement certified by your eye doctor or registered optometrist to that effect instead. You must keep the statement for your records. must take a standard deduction. One of you may not claim a standard deduction while the other itemizes. If you and your spouse support a dependent child from community income, either you or your spouse may claim the dependent. Both of you cannot claim the same dependent on both returns. The department has issued Income Tax Rulings, ITR 93-18 and ITR 93-19, on filing a separate return. Box 10 - Dependents NOTE: If a person who qualifies as your dependent is also a qualifying parent or grandparent, you may claim that person as a dependent in box 10, or you may claim that person as a qualifying parent or grandparent in box 11. You may not claim that same person in both box 10 and box 11. NOTE: In some cases you may treat community income as separate income. The department has issued a ruling, ITR 9322, on when you may treat community income as separate income. If one spouse is a resident and the other spouse is not, other special rules may apply when filing a separate return. The department has issued Income Tax Ruling, 93-20, on how to report income in this case. For more help, see the department’s Publication, Pub. 200. You must complete the Dependent Section on page 1 (and page 3, if more space is needed) of your return before you can total your dependent exemptions. You may claim only the following as a dependent: A person that qualifies as your dependent on your federal return. Box 7 - Single Return If you are filing as single, check box 7. NOTE: If you do not claim a dependent exemption for a student on your federal return in order to allow the student to claim a federal education credit on the student’s federal return, you may still claim the exemption on your Arizona return. For more information, see the department’s Individual Income Tax Ruling, ITR 05-2. Use this filing status if you were single on December 31, 2015. You are single if any of the following apply to you: You have never been married. You are legally separated under a decree of divorce or of separate maintenance. You were widowed before January 1, 2015, and you did not remarry in 2015, and you do not qualify to file as a qualifying widow or widower with dependent children on your federal return. NOTE: If you got divorced during the year, see the department’s Income Tax Ruling, ITR 14-2; and Publication, Pub. 200, for help completing your return. Exemptions Write the number of exemptions you are claiming in boxes 8, 9, 10, and 11. Do not put a check mark. You may lose the exemption if you put a checkmark in these boxes. You may lose the dependent exemption if you do not complete the Dependent Section, on page 1. You may lose the exemption for qualifying parents or grandparents if you do not complete the qualifying parents and grandparents section, on page 1. Box 8 - Age 65 or Over Write "1" in box 8 if you or your spouse were 65 or older in 2015. Write "2" in box 8 if both you and your spouse were 65 or older in 2015. A person who is age 65 or over (related to you or not) that does not qualify as your dependent on your federal return, but one of the following applies: 1. In 2015, you paid more than one-fourth of the cost of keeping this person in an Arizona nursing care institution, an Arizona residential care institution, or an Arizona assisted living facility. Your cost must be more than $800. 2. In 2015, you paid more than $800 for either Arizona home health care or other medical costs for the person. A stillborn child if the following apply: 1. The stillbirth occurred during 2015. 2. You received a certificate of birth resulting in stillbirth from the Arizona Department of Health Services. 3. The child would have otherwise been a member of your household. Box 11 - Qualifying Parents and Grandparents NOTE: If a person who is a qualifying parent or grandparent also qualifies as your dependent, you may claim that person as a dependent in box 10, or you may claim that person as a qualifying parent or grandparent in box 11. You may not claim the same person as a dependent and a qualifying parent or grandparent. Box 9 - Blind Write "1" in box 9 if you or your spouse is totally or partially blind. Write "2" in box 9 if both you and your spouse are totally or partially blind. If you or your spouse were partially blind as of December 31, 2015, you must get a statement certified by your eye doctor or registered optometrist that: You cannot see better than 20/200 in your better eye with glasses or contact lenses. You must complete the qualifying parents and grandparents section on page 1 (and page 3, if more space is needed) before you can total your exemptions for qualifying parents and grandparents. 6 Arizona Form 140 Do not include page 3 with your return if you do not use it. A qualifying parent or grandparent may be any one of the following: Your parent, grandparent or great grandparent, etc. If married filing a joint return, your spouse’s parent, grandparent, or great grandparent, etc. You may claim this exemption if all of the following apply: 1. The parent, grandparent or great-grandparent was 65 years old or older during 2015. 2. The parent or grandparent lived in your principal residence for the entire taxable year. If your parent or grandparent died during the taxable year, this requirement will still be met if he or she lived with you for the entire part of the year in which he or she was alive. Temporary absences by the parent or grandparent for special circumstances, such as a hospital stay or care in a hospice facility, count as time lived in the taxpayer’s principle residence. 3. You paid more than one-half of the support and maintenance costs of the parent or grandparent during the taxable year. To help you determine if you paid more than one-half of your parent or grandparent’s support during the taxable year, it is recommended that you review the department’s income tax procedure, ITP 14-1, and complete the worksheet. Keep the worksheet for your records. 4. The parent or grandparent required assistance with activities of daily living. The term “activities of daily living” means two or more of the listed categories activities of daily living. Activities of daily living include both basic activities of daily living and instrumental activities of daily living. The categories of activities of daily living are dressing, eating, ambulating, toileting, medicating and hygiene, shopping, housekeeping, managing personal finances, basic communication, food-preparation and transportation. For more information regarding what the term “activities of daily living” means when determining an Arizona resident taxpayer’s eligibility for this exemption, see the department’s Individual Income Tax Ruling, ITR 14-3. To help you determine if your parent or grandparent required assistance with activities of daily living to meet this requirement, it is recommended that you review the department’s Individual Income Tax Procedure, ITP 14-2, and complete the check-list. Keep the check-list for your records. Dependent information: dependents children and other Enter the following in columns (a) through (f): a) The dependent's name. If you are claiming an exemption for a stillborn child and the child was not named, enter “stillborn child” in place of a name. b) The dependent's SSN. If you are claiming an exemption for a stillborn child, enter the certificate number from the certificate of birth resulting in stillbirth. c) The dependent’s relationship to you. d) The number of months the dependent lived in your home during 2015. If you are claiming an exemption for a stillborn child, enter the date of birth resulting in the stillbirth. Temporary absences: Your child or dependent is considered to have lived with you during periods of time when temporarily absent due to special circumstances such as: illness; education; business; or vacation. You child is also considered to have lived with you during any required hospital stay following birth, as long as the child would have lived with you during that time but for the hospitalization. e) Check the box if this person did not qualify as a dependent on your federal return. f) Check the box if you did not claim this person (student) as an dependent on your federal return in order to allow that student to claim a federal education credit on the student’s federal return. You may lose the exemption if you do not furnish this information. Enter the total number of dependents listed in box 10. Qualifying parents and grandparents (Box 11) Enter the following in columns (a) through (f): a) the name of the qualifying parent or grandparent, b) the SSN of the qualifying parent or grandparent, c) the qualifying parent’s or grandparent’s relationship to you, or your spouse if filing a joint return, d) the number of months the qualifying parent or grandparent lived in your home during 2015, Temporary absences: Temporary absences by the parent or grandparent for special circumstances, such as a hospital stay or care in a hospice facility, count as time lived in the taxpayer’s principal residence. e) check the box if this person is age 65 or older, and f) check the box if this person died in 2015. You may lose the exemption if you do not furnish this information. Enter the total number of qualifying parents and/or grandparents listed in box 11. Dependents Completing the Dependent Section (Box 10) If you need additional lines to list all of your dependents, including qualifying parents and grandparents, complete page 3, Dependent Information – Continuation Sheet, and include this page with your return. Be sure to check the box on page 1 indicating you are completing page 3. 7 Arizona Form 140 You may either add or subtract items A and B below on line 16 or 35, respectively, depending on your situation. Totaling Your Income Line 12 - Federal Adjusted Gross Income A. Married Persons Filing Separate Returns You must complete your federal return before you enter an amount on line 12. You must complete a 2015 federal return to determine your federal adjusted gross income, even if you are not filing a federal return. Arizona uses federal adjusted gross income as a starting point to determine Arizona taxable income. Your federal adjusted gross income is your Arizona gross income. If you file a separate Arizona return, you must report the following income on that return: one-half of the community income from all sources, and all of your separate income. If you and your spouse file a joint federal return but separate Arizona returns, you must make sure that each separate return reflects the correct income. If you begin your Arizona return with only the income that you earned during the year, you will have to adjust this income. If you file separate federal returns, each of your federal returns should already reflect the correct income. Since your separate Arizona returns will begin with the federal adjusted gross income, you will not have to adjust your income. If you have to adjust your income, include a schedule showing how you figured your adjustment. For more information, see the department’s Publication, Pub. 200. NOTE: Be sure to use your federal adjusted gross income and not your federal taxable income. If the amount on line 12 is more than $75,000 ($150,000 if filing a joint return), you may need to make estimated payments. See "Do You Need to Make Estimated Payments in 2016?" instructions on page 4. Additions to Income Line 13 - Non-Arizona Municipal Interest Enter the amount of interest income from non-Arizona municipal bonds that you did not include as income on your federal return. You may exclude any expenses incurred to purchase or carry the obligation. Reduce the interest income by the amount of those expenses that you could not deduct on your federal return. If you received tax exempt interest from municipal bonds, include a schedule listing the payors and the amount received from each payor. You may also want to include supporting documents for amounts received from Arizona municipal bonds that are exempt from Arizona income tax. These may be items such as bank statements, brokerage statements, etc. Line 14 - Partnership Income Complete line 14 if your Arizona Form 165, Schedule K-1, shows a difference between federal and state distributable income. If the difference reported on your Arizona Form 165, Schedule K-1, is a positive number, enter that difference as an addition. Enter the addition on line 14. B. Fiduciary Adjustment A fiduciary uses Arizona Form 141AZ, Schedule K-1, to report to you your share of the fiduciary adjustment from the trust or estate. Line 3 of Form 141AZ, Schedule K-1, shows your share of the fiduciary adjustment from the estate or trust. If the amount reported on line 3 of your Form 141AZ, Schedule K-1, is a positive number, enter that amount as an addition. Enter the addition on line 16. If the amount reported on line 3 of your Form 141AZ, Schedule K-1, is a negative number, enter that amount as a subtraction. Enter the subtraction on line 35. C. Ordinary Income Portion of Lump-Sum Distributions Excluded on Your Federal Return Make this adjustment if you use federal averaging for lumpsum distributions from your pension or profit-sharing plan. Arizona law does not provide for averaging. Enter the amount of the distribution that you treated as ordinary income on your federal return. If you choose to treat the capital gain portion of the distribution as ordinary income, you must also include that amount. For more information, see the department’s Individual Income Tax Ruling, ITR 93-5. D. Items Previously Deducted for Arizona Purposes Arizona statutes prohibit a taxpayer from deducting items more than once. If your Arizona taxable income includes items previously deducted for Arizona purposes, you must add such amounts to your Arizona gross income. NOTE: If the difference reported on your Arizona Form 165, Schedule K-1, is a negative number, enter that difference as a subtraction. Enter the subtraction on line 25. Line 15 - Total Federal Depreciation Enter the total amount of depreciation deducted on your federal return. If you make an entry here, you should also take a subtraction on line 24. To figure how much you should subtract, see the instructions for line 24. Line 16 - Other Additions to Income Use line 16 if any of the special circumstances below apply. Include your own schedule with your return explaining any amounts entered here. E. Claim of Right Adjustment for Amounts Repaid in 2015 You must make an entry here if all of the following apply: 1. During 2015, you were required to repay amounts held under a claim of right. 2. The amount required to be repaid during 2015 was more than $3,000. 8 Arizona Form 140 You took a deduction for the amount repaid on your 2015 federal income tax return. If the above apply, enter the amount deducted on your federal income tax return here. For more information on the Arizona claim of right provisions, see the department’s Individual Income Tax Procedure, ITP 95-1. I. Wage Expense for Employers of TANF Recipients F. Claim of Right Adjustment for Amounts Repaid in Prior Taxable Years You must make an entry here if all of the following apply: 1. During a year prior to 2015 you were required to repay amounts held under a claim of right. 2. You computed your tax for that prior year under Arizona's claim of right provisions. 3. A net operating loss or capital loss was established due to the repayment made in the prior year. 4. You are entitled to take that net operating loss or capital loss carryover into account when computing your 2015 Arizona taxable income. 5. The amount of the loss carryover included in your federal income is more than the amount allowed to be taken into account for Arizona purposes. Enter the amount by which the loss carryover included in your federal adjusted gross income is more than the amount allowed for the taxable year under Arizona law. If you claim a credit for motion picture production costs on Form 334, you cannot deduct any expenses deducted on your federal return related to the production or related to a transferred credit. Enter the amount of any such expenses that were deducted in computing federal adjusted gross income for which you claimed a credit. G. Addition to S Corporation Income Due to Credits Claimed Shareholders of an S corporation who claim a credit passed through from an S corporation must make an addition to income for the amount of expenses disallowed by reason of claiming the credit. An S corporation that passes the following credits through to its shareholders must notify each shareholder of his or her pro rata share of the adjustment. You must enter an amount on this line when claiming any of the following Arizona credits: Environmental Technology Facility Credit (Form 305) Agricultural Water Conservation System Credit (Form 312) Pollution Control Credit (Form 315) Credit for Solar Hot Water Heater Plumbing Stub Outs and Electric Vehicle Recharge Outlets (Form 319) Credit for Employment of TANF Recipients (Form 320) Agricultural Pollution Control Equipment Credit (Form 325) Credit for Motion Picture Production Costs (Form 334) L. Nonqualified Withdrawals from 529 College Savings Plans You must make an addition to income if both of the following apply to you: You received a nonqualified withdrawal from a 529 college savings plan. You did not include the amount of the withdrawal in your federal adjusted gross income. The amount that you must add is the amount withdrawn, but no more than the difference between the amount of contributions subtracted in prior years and the amount added in any prior years. A nonqualified withdrawal is a withdrawal other than any of the following: A qualified withdrawal. A qualified withdrawal is a withdrawal from an account to pay the qualified higher education expenses of the designated beneficiary of the account. A withdrawal made as the result of the death or disability of the designated beneficiary of an account. A withdrawal that is made on the account of a scholarship, or the allowance or payment described in IRC § 135(d)(1)(B) or (C), and that is received by the designated beneficiary, but only to the extent of the amount of this scholarship, allowance or payment. A rollover or change of designated beneficiary. 3. If you claim a credit for employing TANF recipients on Form 320, you cannot deduct any wage expense for which you claim the credit. If you take this credit, enter the amount of such expenses that you deducted on your federal return. J. Motion Picture Expenses K. Adjusted Basis in Property for Which You Have Claimed a Credit for Investment in Qualified Small Businesses If you claim a credit for an investment in a qualified small business on Form 338, you must adjust your basis in the investment by the amount of the credit claimed. You must report this difference in basis on the Arizona return that you file for the taxable year in which you sell or otherwise dispose of the investment. If you sold or otherwise disposed of the investment during the 2015 taxable year, on line 16, enter the amount by which the adjusted basis computed under the IRC with respect to that property exceeds the adjusted basis of the property computed under A.R.S. § 43-1074.02. H. Solar Hot Water Heater Plumbing Stub Outs and Electric Vehicle Recharge Outlet Expenses If you file Form 319 to claim a credit for installing solar hot water heater plumbing stub outs or electric vehicle recharge outlets in a dwelling you constructed, you cannot deduct any expenses for which you claim the credit. If you take this credit, enter the amount of such expenses that you deducted on your federal return. 9 Arizona Form 140 M. Original Issue Discount (OID) on Reacquisition of Debt Instrument For federal purposes, when a taxpayer made the special election to defer discharge of indebtedness (DOI) income under IRC § 108(i) (for 2009 or 2010), the taxpayer was not allowed to take a deduction with respect to the portion of any OID that accrued with respect to that DOI income during the income deferral period. In this case, the taxpayer had to deduct the aggregate amount of the OID deductions disallowed ratably over a 5 year period, beginning with the period in which the income was includible in federal adjusted gross income. Arizona did not adopt the federal provisions requiring a taxpayer to defer the OID deduction in cases where the taxpayer federally deferred the DOI income. For Arizona purposes, you had to report the DOI income from a debt reacquisition in the year in which you reacquired the debt, and you were allowed to subtract any OID related to that DOI income in the year the OID accrued. If your federal adjusted gross income includes a deduction for any accrued OID that you have already subtracted for Arizona purposes, you must make an addition to Arizona income for the amount of deferred OID deducted on your federal return. Generally, this addition will apply to taxable years 2014 through 2018. On line 16, enter the amount of any previously deferred OID that you deducted in computing your 2015 federal adjusted gross income, to the extent that the amount was previously subtracted from Arizona gross income. N. Arizona Long-Term Health Care Savings Accounts (AZLTHSA) Withdrawals You must add amounts withdrawn from your AZLTHSA if you withdrew money for purposes other than paying for qualified long-term health care expenses. O. Sole Proprietorship Loss of an Arizona Nonprofit Medical Marijuana Dispensary included in Federal Adjusted Gross Income If you are registered as an Arizona sole proprietorship with the Arizona Department of Health Services to operate in this state as a nonprofit medical marijuana dispensary, you are required to add the amount of the loss from the dispensary that is included in the computation of your federal adjusted gross income. Include the amount of the loss on line 16. The taxpayer must make an addition to Arizona gross income on the full-year Arizona resident return for the amount of the NOL carryforward deduction included in the taxpayer’s federal adjusted gross income. For more information, see the department’s Individual Income Tax Ruling, ITR 13-5. NOTE: For a non-Arizona source loss incurred while the taxpayer was an Arizona nonresident, the taxpayer would not be allowed to amend a prior year resident Arizona income tax return to claim the NOL carry back deduction. Q. Federal Capital Loss Carryforward Deduction Incurred from Non-Arizona sources Prior to Arizona Residency An individual cannot include a capital loss carryforward deduction, incurred from non-Arizona sources while the taxpayer was an Arizona nonresident, in the Arizona taxable income of a return filed for a taxable year in which the taxpayer is an Arizona resident. Therefore, a capital loss incurred from non-Arizona sources while the taxpayer was an Arizona nonresident cannot be carried forward to a taxpayer's Arizona resident return when the loss carryover is reflected in the taxpayer's federal adjusted gross income. The taxpayer must make an addition to Arizona gross income on the full-year Arizona resident return for the amount of such capital loss carryforward deduction included in the computation of the taxpayer’s federal adjusted gross income. For more information, see the department’s Individual Income Tax Ruling, ITR 13-6 R. Other Adjustments Other special adjustments may be necessary. You may need to make an addition for depreciation or amortization. You may also need to make an addition if you claimed certain tax credits. Call one of the numbers listed on page 1 of these instructions if any of the following apply: You sold or disposed of non-depreciable property that was held for the production of income and your basis was computed under the Arizona Income Tax Act of 1954, as amended (1978 prior). You claimed the Environmental Technology Facility Credit. You claimed the Pollution Control Credit. You claimed the Recycling Equipment Credit. You claimed the Agricultural Pollution Control Equipment Credit. You elected to amortize the cost of a child care facility under Arizona law in effect before 1990 and you are still deducting amortization or depreciation for that facility on your federal income tax return. Line 17 - Subtotal Add lines 12 through 16 and enter the total. NOTE: If the Arizona nonprofit medical marijuana dispensary is registered with the Arizona Department of Health Services as anything other than a sole proprietorship, this addition does not apply. P. Federal Net Operating Loss (NOL) Carryforward from Non-Arizona Sources Accrued While a Non-Resident An individual cannot include a federal NOL carryforward deduction incurred from non-Arizona sources while the taxpayer was an Arizona nonresident in the Arizona taxable income of a return filed for a taxable year in which the taxpayer is an Arizona resident. 10 Arizona Form 140 Subtractions from Income Line 23 - Net Capital Gain from Investment in a Qualified Small Business You may subtract the amount of any net capital gain included in federal adjusted gross income for the taxable year derived from investment in a qualified small business as determined by the Arizona Commerce Authority pursuant to A.R.S. § 411518. On line 23, enter the amount of the allowable subtraction. You may only subtract those items for which statutory authority exists. You cannot take a subtraction without such authority. You may not subtract any amount that is allocable to income excluded from your Arizona taxable income. If you have any questions concerning subtractions from income, call one of the numbers listed on page 1 of these instructions. Lines 18 through 22 - Net Capital Gain or (Loss) CAUTION: If the amount entered on line 23 includes any long-term capital gain from an investment made after December 31, 2011, you cannot include that portion of the net capital gain in your computation of the allowable subtraction for any net long-term capital gain from assets acquired after December 31, 2011 and included in federal adjusted gross income. For more information, see the instructions on page 29 for the amount to enter on line 13, column (c), of the net long-term capital gain worksheet. NOTE: If you enter an amount on line 18, you must complete lines 19 and 20. If you are taking a subtraction for any net long-term capital gain from assets acquired after December 31, 2011, you must also complete lines 20 and 21. If you do not complete lines 18 through 21, you cannot take the subtraction. You may subtract a percentage of any net long-term capital gain included in your federal adjusted gross income that is derived from an investment in an asset acquired after December 31, 2011. For 2015, the percentage is 25% (.25). Use the worksheet on page 28 of these instructions, Worksheet for Net Long-Term Capital Gain Subtraction for Assets Acquired after December 31, 2011, to determine the allowable subtraction. Keep the worksheet for your records. Line 18 – Total Net Capital Gain or (Loss) If you reported a net capital gain or (loss) on your federal income tax return, enter the total net capital gain or (loss) reported on the Capital Gain or (Loss) line on page 1 of your federal return. This amount should be reported in your federal adjusted gross income. Line 19 - Total Net Short-Term Capital Gain or (Loss) Enter the total amount of net short-term capital gain or (loss) reported on the Capital Gain or (Loss) line on page 1 of your federal return. This amount should be reported in your federal adjusted gross income. Line 24 - Recalculated Arizona Depreciation For assets placed in service in taxable years beginning before December 31, 2012, enter the total amount of depreciation allowable pursuant to IRC § 167(a) for the taxable year calculated as if you had elected not to claim bonus depreciation for eligible properties for federal purposes. For assets placed in service during taxable years beginning from and after December 31, 2012 through December 31, 2013, the amount of the subtraction for these assets depends on the method used to compute the depreciation for these assets. NOTE: For more information, see the department’s individual income tax procedure, ITP 15-1. For assets placed in service in taxable years beginning from and after December 31, 2013, enter the total amount of depreciation allowable pursuant to IRC § 167(a) for the taxable year calculated as if the bonus depreciation is 10% of the amount of federal bonus depreciation pursuant to IRC § 168(k). Add all amounts together and enter the total on line 24. NOTE: If you are not required to report dividend distributions and/or short-term capital gains from mutual funds on federal Form Schedule D, do not include the shortterm capital gain distributed by the mutual fund on line 19. NOTE: For more information and examples of how to calculate Arizona bonus depreciation, see the department’s Income Tax Procedure, ITP 15-1. Line 20 - Total Net Long-Term Capital Gain or (Loss) Enter the amount from the worksheet, line 14, column (a). Line 21 - Net Long-Term Capital Gain from Assets Acquired After December 31, 2011 Enter the amount from the worksheet, line 14, column (c). Line 25 – Partnership Income Use this adjustment if your Arizona Form 165, Schedule K-1, shows a difference between federal and state distributable income. If the difference reported on your Arizona Form 165, Schedule K-1, is a negative number, enter that difference as a subtraction. Enter the subtraction on line 25. Only include net long-term capital gains on this line if it can be verified that the asset was acquired after December 31, 2011. For purposes of this line, an asset acquired by gift or inheritance is considered acquired on the date it was acquired by the gift-giver or the deceased individual. NOTE: If the difference reported on your Arizona Form 165, Schedule K-1, is a positive number, enter that difference as an addition. Enter the addition on line 14. Line 22 - Net Long-Term Capital Gain Subtraction From Income for Assets Acquired After December 31, 2011. Multiply the amount on line 21 by 25% and enter the result. 11 Arizona Form 140 Line 26 - Adjustment for IRC § 179 Expense not Allowed in Prior Years If you made an addition for IRC § 179 expense on your 2011 and/or 2012 return, enter 20% of the amount added for 2011 and/or 2012. Line 27 - Interest on U.S. Obligations Enter the amount of interest income from U.S. Government obligations included as income on your federal return. U.S. Government obligations include obligations such as savings bonds and treasury bills. You cannot deduct any interest or other related expenses incurred to purchase or carry the obligations. If such expenses are included in your Arizona gross income, you must reduce the subtraction by such expenses. If you are itemizing deductions on your Arizona return, you must exclude such expenses from the amount deducted. an optional retirement program established by the Arizona Board of Regents under Arizona Revised Statutes, and an optional retirement program established by an Arizona community college district. NOTE: Public retirement pensions from states other than Arizona do not qualify for this subtraction. Line 29 - Arizona State Lottery Winnings You may subtract up to $5,000 of winnings received in 2015 for Arizona lottery prizes. If you subtract Arizona lottery winnings here, you may have to adjust the amount of gambling losses claimed as an itemized deduction. See instructions for Form 140, Schedule A, Itemized Deduction Adjustments. Line 30 - U.S. Social Security Benefits or Railroad Retirement Benefits Arizona does not tax the following: social security benefits received under Title II of the Social Security Act, or railroad retirement benefits received from the Railroad Retirement Board under the Railroad Retirement Act. If you included such social security or railroad retirement benefits as income on your federal return, use line 30 to subtract this income. NOTE: Do not subtract interest earned on FNMA or GNMA bonds since this interest is taxable by Arizona. For details, see the department's Individual Income Tax Ruling, ITR 06-1. Do not subtract any amount received from a qualified pension plan that invests in U.S. Government obligations. Do not subtract any amount received from an IRA that invests in U.S. Government obligations. These amounts are not interest income. For details, see the department’s Individual Income Tax Rulings, ITR 96-2 and ITR 96-3. NOTE: Enter only the taxable amount (the amount that was subject to federal income tax). Do not include any amount that was not subject to federal income tax. Line 28 - Exclusion for U.S. Government, Arizona State or Local Government Pensions If you receive pension income from any of the sources listed below, subtract the amount you received or $2,500, whichever is less. Include only the amount you reported as income on your federal return. If both you and your spouse receive such pension income, each spouse may subtract the amount received or $2,500, whichever is less. Public pensions from the following sources qualify for this subtraction: the United States Government Service Retirement and Disability Fund, the United States Foreign Service Retirement and Disability System, retired or retainer pay of the uniformed services of the United States, any other retirement system or plan established by federal law, NOTE: This applies only to those retirement plans authorized and enacted into the U.S. Code. This does not apply to a retirement plan that is only regulated by federal law (i.e., plans which must meet certain federal criteria to be qualified plans). the Arizona State Retirement System, the Arizona State Retirement Plan, the Corrections Officer Retirement Plan, the Public Safety Personnel Retirement System, the Elected Officials' Retirement Plan, a retirement plan established for employees of a county, city, or town in Arizona, See the department’s Individual Income Tax Ruling, ITR 961, for more information about railroad retirement benefits. Line 31 - Certain Wages of American Indians Enrolled members of American Indian tribes may subtract wages earned while living and working on their tribe's reservation. The federal government must recognize these tribes. For more information, see the department’s Individual Income Tax Ruling, ITR 96-4. Line 32 - Pay Received for Active Service as a Member of the Reserves, National Guard or the U.S. Armed Forces Members of the U.S. armed forces may subtract pay received for active duty military service. On line 32, enter the amount of that income included in your federal adjusted gross income. Members of the reserves or the National Guard may subtract pay received for active service as a reservist or as a National Guard member. This includes pay received for weekend or two-week training periods. On line 32 enter the amount of that income included in your federal adjusted gross income. Military Technician (dual status) You may not subtract any income you received for full-time civil service employment as a “military technician (dual status)”. Compensation received by a “military technician (dual status)” for federal civil service employment for the 12 Arizona Form 140 You may take a subtraction for a contribution that you made during 2015 to a plan that existed before 2015. You may take a subtraction for a contribution that you made during 2015 to a plan established in another state. You may take a subtraction for a contribution that you made in 2015 to any 529 college savings plan. This could be a plan established for a child, grandchild, niece, nephew, or any other person for whom a plan has been established. You cannot take a subtraction for an amount transferred from one college savings plan to a different college savings plan (a rollover). National Guard or for the United States Reserves, is not income received for active service as a National Guard member for a Reserve member even though the employee may be required to wear a military uniform while at work. For more information, see the department’s Individual Income Tax Ruling, ITR 12-2. NOTE: You may not subtract pay received for active duty service as a member of the U.S. Public Health Service or NOAA. For more information, see the department’s Individual Income Tax Ruling, ITR 10-1. Line 35 - Other Subtractions from Income Line 33 - Net Operating Loss Adjustment Arizona did not adopt the special federal net operating loss rules for losses incurred during 2008 or 2009. For Arizona purposes, you must deduct a net operating loss as if the loss was computed under IRC § 172 in effect prior to the enactment of those special rules. If you made an election to deduct your 2008 or 2009 federal net operating loss under IRC § 172(b)(1)(H), you may have to enter an amount here. Figure how much of the net operating loss carry forward would have been allowed as a deduction on your 2015 federal income tax return, if the election described in IRC § 172(b)(1)(H) had not been made in the year of the loss. On line 33, enter the amount that exceeds the actual net operating loss carry forward that was deducted in arriving at federal adjusted gross income. Use line 35 if any of the following special circumstances apply. Include your own schedule with your return explaining any amounts entered here. Include your schedule with the return. A. Fiduciary Adjustment A fiduciary uses Form 141AZ, Schedule K-1 to report to you your share of the fiduciary adjustment from the trust or estate. Line 3 of Form 141AZ, Schedule K-1 shows your share of the fiduciary adjustment from the estate or trust. If the amount reported on line 3 of your Arizona Form 141AZ, Schedule K1, is a negative number, enter that amount as a subtraction. Enter the subtraction on line 35. If the amount reported on line 3 of your Arizona Form 141AZ, Schedule K-1, is a positive number, enter that amount as an addition. Enter the addition on line 16. B. Federally Taxable Arizona Municipal Interest as Evidenced by Bonds Enter the amount of any interest income received on obligations of the State of Arizona, or any political subdivisions of Arizona, as evidenced by bonds, and is included in your Arizona gross income. Do not enter any Arizona municipal interest that is exempt from federal taxation and not included in your federal adjusted gross income. For more information, see the department’s Income Tax Ruling, ITR 15-1. C. Adoption Expenses You may take this subtraction only in the year the final adoption order is granted. Enter the lesser of the total of the following adoption expenses or $3,000. When figuring your subtraction, you may include expenses incurred in prior years. The following expenses are qualified adoption expenses: unreimbursed medical and hospital costs, adoption counseling, legal and agency fees, and other nonrecurring costs of adoption. If you are married and filing separately, you may take the entire subtraction or you may divide the subtraction with your spouse. However, the total subtraction taken by both you and your spouse cannot exceed $3,000. NOTE: This subtraction applies to only those individuals who made an election under the special federal net operating loss rules for 2008 and 2009. Under the special rules for 2008 and 2009, you could have elected to carry the net operating loss back for 3, 4 or 5 years, instead of the normal 2 years. This election would have been allowed under IRC § 172(b)(1)(H) as amended by the American Recovery and Reinvestment Act of 2009 or the Worker, Homeownership, and Business Assistance Act of 2009. Line 34 - Contributions to 529 College Savings Plans You may subtract amounts you contribute to 529 college savings plans during the taxable year. You may subtract the amount you contributed during the year up to a total of $2,000 ($4,000 for a married couple filing a joint return). If you are married filing separate returns, either you or your spouse may take the subtraction, or you may divide it between you, but the total subtraction taken by both of you cannot be more than $4,000. If you contribute more than $2,000 ($4,000 if married) during the year, your total subtraction is still limited to $2,000 ($4,000 if married). For example, Jorge and Kate are married and have two children. During 2015, Jorge and Kate contributed $2,500 to a 529 plan for Child 1 and $2,500 to a 529 plan for Child 2. Even though Jorge and Kate contributed a total of $5,000 during 2015, they may subtract only $4,000 on their 2015 return. 13 Arizona Form 140 during the taxable year equal to the amount of those federal tax credits you received. G. Qualified State Tuition Program Distributions If you are a beneficiary of a qualified state tuition program, you may subtract some of the amount distributed from the program for qualified education expenses. Enter the amount of the distribution
Microsoft Word - 140 instructions
More about the Arizona Form 140 Instructions Individual Income Tax TY 2015
Other Arizona Individual Income Tax Forms:
|Form Code||Form Name|
|Form 140||Resident Personal Income Tax Return|
|Form 140EZ||Resident Personal Income Tax (EZ Form) Package|
|Form 140 Instructions||Income Tax Instruction Packet|
|140-A||Schedule A - Itemized Deduction Adjustments|
|Form 204||Application for Filing Extension|
Arizona usually releases forms for the current tax year between January and April. We last updated Arizona Form 140 Instructions from the Department of Revenue in April 2016.
About the Individual Income Tax
The IRS and most states collect a personal income tax, which is paid throughout the year via tax withholding or estimated income tax payments.
Most taxpayers are required to file a yearly income tax return in April to both the Internal Revenue Service and their state's revenue department, which will result in either a tax refund of excess withheld income or a tax payment if the withholding does not cover the taxpayer's entire liability. Every taxpayer's situation is different - please consult a CPA or licensed tax preparer to ensure that you are filing the correct tax forms!
While we do our best to keep our list of Arizona Income Tax Forms up to date and complete, we cannot be held liable for errors or omissions. Is the form on this page out-of-date or not working? Please let us know and we will fix it ASAP.