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Arizona Free Printable Arizona Form 140NR for 2023 Arizona Nonresident Personal Income Tax Package

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Nonresident Personal Income Tax Package
Arizona Form 140NR

2 22 Arizona Form 140NR Nonresident Personal Income Tax Booklet This Booklet Contains: • Form 140NR – Nonresident Personal Income Tax Return Who must use Arizona Form 140NR? • Schedule A(NR) – Itemized Deduction File a Form 140NR if you were not an Arizona resident but earned income from an Arizona source in 2022. • Form 204 – Extension Request Where’s my Refund? Check your refund status at www.AZTaxes.gov  Pay your taxes by credit card! American Express  Visa  Discover Card  MasterCard Before using paper, E-File and select the Direct Deposit option Fast: Faster processing of your refund and money in your account sooner. In some cases, 6 times faster. Accurate: Fewer errors than paper forms. Online programs make it easy to ensure you don’t miss anything important. Affordable: If you qualify, it’s free. Paperless: Help the environment by reducing the paper usage. CAUTION The federal adjusted gross income that you use on your Arizona return may not be the same as the federal adjusted gross income from your federal tax return. Also, the federal Schedule A deductions used on the Arizona return may be different from the federal Schedule A deductions taken on your federal return. Each year the Arizona State Legislature considers if they will adopt changes made to the federal tax law during the prior year. These forms assume the Legislature will adopt all federal law changes made after January 1, 2022. If you use the amounts from your 2022 federal tax return to complete your Arizona return and the Legislature does not adopt the 2022 federal changes, you may have to amend your return at a later date for any difference between Arizona and federal law. For more details, visit www.azdor.gov and click on the link for 2022 conformity. Notice As a rule, the starting point for your Arizona return is your federal adjusted gross income. To take itemized deductions, you must start with the amount shown on the federal Schedule A. This is the case for 2022, except for changes Congress made to the federal tax code during 2022 if either of the following apply: 1. The changes affect how you figure your federal adjusted gross income OR 2. The changes affect how you figure your itemized deductions. When federal changes are made, Arizona legislature must adopt those changes if the Arizona starting points are to be kept the same. The legislature will address this issue when it is in session during 2023. We must publish these forms before this issue will be addressed by the legislature. When we went to print, Arizona had not yet adopted any federal tax law changes enacted after January 1, 2022. What does this mean to you? It means that if any of the federal law changes made in 2022 apply to your 2022 return, you can opt to file your 2022 return using one of the following methods: 1. You can wait and file your 2022 return after this issue has been addressed. To do this, you may need to ask for a filing extension. You must pay 90% of the tax due by the due date of the return before any extension. 2. You can file your 2022 return assuming that the federal law changes will be adopted. The 2022 tax forms make this assumption. If you opt for method 2, one of the following will apply: • If Arizona adopts the federal changes, you do not have to do anything more. • If Arizona does not adopt all those changes, you may need to amend your 2022 Arizona return. Your amended return will have to show the difference between the Arizona law and the federal law. If this happens, we will post more details on our conformity webpage at https://azdor.gov/legal/conformity-irc. • Generally, no penalties or interest will be assessed on these amended returns, if you follow the Department’s instructions and pay any tax due when you file your original 2022 return and you file and pay the required amended return by the extended due date of your 2023 return. 3. You can file your 2022 return assuming that we will not adopt the federal law changes. If you opt for this method, you will have to do all of the following. • • • You will have to research all of the federal changes made after January 1, 2022. You will have to figure out if any of those changes apply to you. You will have figure out how to make adjustments for those changes on your return. If you opt for method 3, one of the following will apply: • If Arizona does not adopt those changes, you do not have to do anything more. • If Arizona adopts those changes, you may need to amend your 2022 Arizona return. Your amended return will have to show the difference between what you reported and what you should have reported. If this happens, we will post more details on our conformity webpage at https://azdor.gov/legal/conformity-irc. Individual Income Tax - Highlights 2022 Due date for Calendar Year Filers Deduction Increase. (Arizona Form 140, Form 140PY or Form 140NR) Your 2022 individual income tax return is due by midnight on April 15, 2023. Because April 15, 2023 falls on a weekend, and April 17, 2023 falls on a federal holiday, you have until Tuesday, April 18, 2023 to timely file your 2022 tax return. If you file under a valid extension, your extended due date to file your income tax return is October 15, 2023. Because October 15, 2023 falls on a weekend, you have until Monday, October 16, 2023 to timely file your 2022 tax return. 2022 Individual Income Tax Rates For 2022, Tax Tables X & Y were adjusted for inflation. Taxpayers with taxable income more than $50,000 must use Tax Tables X and Y to compute their tax liability. Partyear residents and nonresidents must also use Tax Tables X and Y to compute their 2022 tax liability regardless of their taxable income. The 2022 Optional Tax Table (for Arizona resident taxpayers with taxable income less than $50,000) was also adjusted for inflation. To determine your tax liability, see the Optional Tax Table. 2022 Changes to Income Tax Forms Due to modifications to the 2022 Forms 140, 140NR and 140PY certain additions and subtractions (adjustments to Arizona Gross Income) have been moved from pages 1 and 2 to pages 5 (additions) and page 6 (subtractions). 2022 Arizona Small Business Income (SBI) Tax 2022 Individual Filing Threshold The tax rate applicable to small business taxable income reported on Forms 140-SBI, 140PY-SBI or Form 140NRSBI was reduced from 3.5% in 2021 to 3.0% for 2022. The filing threshold used to determine if a taxpayer must file an Arizona individual income tax return was adjusted for inflation. Credit for Contributions to Private School Tuition Organizations (Form 323) The filing threshold is based on a taxpayer’s filing status and federal gross income excluding certain income that Arizona does not tax. A taxpayer must file if they are: The allowable current year credit for contributions to private school tuition organizations was adjusted for inflation purposes. For 2022, the maximum current year credit is: • $623 for single or head of household taxpayers; • $1.245 for married taxpayers filing a joint return; and • $623 for married taxpayers filing a separate return. Single and gross income is more than $12,950; Married filing joint and gross income is more than $25,900; • Married filing separate and gross income is more than $12,950; and • Head of Household and gross income is more than $19,400. For more information and income that is excluded, see the table, Arizona Filing Requirements, provided on page 1 of the instructions for the income tax form you are filing • • Credit for Contributions Made to Certified School Tuition Organizations (Form 348) The allowable current year credit for contributions to a certified school tuition organization was adjusted for inflation purposes. For 2022, the maximum current year credit is: • $620 for single and head of household taxpayers; • $1,238 for married taxpayers filing a joint return; and • $620 for married taxpayers filing a separate return. 2022 Arizona Standard Deduction Amounts Adjusted The 2022 Arizona standard deduction amounts are: • • • $12,950 for a single taxpayer or a married taxpayer filing a separate return; $25,900 for a married couple filing a joint return; and $19,400 for individuals filing a head of household return. Repealed Individual Tax Credits Beginning with tax year 2022, the following income tax credits have been repealed. Taxpayers who claimed either of these credits and established unused carryover amounts from prior tax years, may still claim the carryover amounts for the remaining 5-year carryover period allowed by the credit. Change to Standard Deduction Increase for Charitable Contributions Computation For taxpayers who do not itemized deductions on their 2022 Arizona income tax return and elect to take the standard deduction, the allowable Standard Deduction Increase was modified. For tax year 2022, the allowable portion of your charitable contributions used to compute your Standard Deduction Increased was increased from 25% to 27% of the qualified charitable contributions made during the tax year. Taxpayers must complete page 3 of their personal income tax form to claim the Standard • • Pollution Control Credit (Form 315) Employment by a Healthy Forest Enterprise Credit (Form 332) New Individual Tax Credits Affordable Housing Tax Credit (Form 354) Beginning with tax year 2022, Arizona allows an individual taxpayer to claim a nonrefundable tax credit for projects in 1 3 Individual Income Tax - Highlights 2022 this state that qualify for the federal low-income housing tax credit under section 42 of the Internal Revenue Code (IRC) that are placed in service from and after June 30, 2022 in an amount equal to at least fifty-percent (50%) of the amount of the federal credit allowed in each taxable during the federal credit. Arizona Revised Statute § 43-1074 The tax credit may claimed on either the individual’s personal income tax return (Form 140, 140NR or 140PY) or the Small Business Income tax return, if filing. (Form 140-SBI, 140NR-SBI or 140PY-SBI) For more information, see Credit Form 354 and instructions. Pass-Through Entity (PTE) Tax (Credit Form 355) Beginning with tax year 2022, Arizona allows an individual partner or an individual shareholder of a partnership/S Corporation a nonrefundable tax credit for the taxes paid by the PTE on the individual’s behalf for their share of the income distributed to the partner/shareholder. If the allowable credit exceeds the taxes otherwise due on the claimants income, or if the there are no taxes due, the amount of the claim not used to offset taxes may be carried for not more than five consecutive taxable years as a credit against subsequent years’ income tax liability. Arizona Revised Statute § 43-1077 For more information, see Credit Form 355, Credit for Entity-Level Tax, and instructions. An individual taxpayer who claims the allowable PTE tax credit, must also adjust their Arizona gross income by adding the amount of the tax payment made by the PTE for which the tax credit is claimed. A taxpayer who is claiming this credit on their personal income tax return, the add-back adjustment is reported on page 5, “Other Additions to Arizona Gross Income” and included in the total amount reported on the income tax return. Arizona Revised Statute § 43-1021. 2 4 Tax Credits Available Over 100,000 eligible Arizona families failed to receive thousands of dollars in tax credits because they did not file a tax return. You may qualify for these special credits when you file your state and federal taxes. Tax Year 2022 Federal Earned Income Tax Credit Eligibility Table Number of Qualifying Children 0* 1 2 3 or more *your age 25 - 64 Earned Income (less than) $16,480 ($22,610 if MFJ) $43,492 ($49,622 if MFJ) $49,399 ($55,529 if MFJ) $53,057 ($59,187 if MFJ) Maximum Credit $560 $3,733 $6,164 $6,935 MFJ = Married Filed Jointly Tax Year 2022 Federal Child Tax Credit Eligibility Table Qualifications Maximum Credit Amount Per Qualifying Child Children under the age of 17 years at the end of the 2022 tax year $2,000 per child Parents and children must have Social Security Number or ITIN (Individual Taxpayer Identification Number) to claim credit. Do you qualify for the Arizona Family Tax Credit and/or Dependent Tax Credit? To determine if you qualify to claim the Arizona Family Tax Credit and/or the Dependent Tax Credit, see the instructions for Forms 140, 140A, 140EZ and 140PY. Nonresidents filing Form 140NR cannot claim the Arizona Family Tax Credit but you may still qualify to claim the Dependent Tax Credit. Arizona Increased Excise Tax Credit Eligibility Table Qualifications Eligibility depends on Arizona residency and filing status Income $25,000 or less per year To Qualify! You must file your state and federal taxes How To File! Get your taxes prepared FREE at one of the community tax assistance sites. The sites will also e-file your taxes; that means a FREE FAST REFUND. Where To File! For locations call ......................................2-1-1 within Arizona From anywhere .............................................. (877) 211-8661 TDD/TTY AZ Relay ............................. 7-1-1 or (800) 367-8939 Website: www.211arizona.org Earn it! Keep it! Save it!  Save for a House  Save for a Car  Save for a College Education 5 THIS PAGE INTENTIONALLY LEFT BLANK 6 Arizona Form 140NR 2022 Nonresident Personal Income Tax Return For information or help, call one of the numbers listed: Phoenix (602) 255-3381 From area codes 520 and 928, toll-free (800) 352-4090 Tax forms, instructions, and other tax information If you need tax forms, instructions, and other tax information, go to the department’s website at www.azdor.gov. Income Tax Procedures and Rulings These instructions may refer to the department’s income tax procedures and rulings for more information. To view or print these, go to our website select Reports, Statistics and Legal Research from the main menu then click on Legal Research and select a document and category type from the drop down menus. Publications To view or print the department’s publications, go to our website select Reports, Statistics and Legal Research from the main menu then click on Publications in the left-had column. Leave the Paper Behind - e-file! • • • • Quicker Refunds Accurate Proof of Acceptance Free ** No more paper, math errors, or mailing delays when you e-file! Get your refund quicker with direct deposit. E-file today, pay by April 18, 2023, to avoid penalties and interest. E-file through an Authorized IRS/DOR e-file provider or by using your personal computer and the Internet. Visit our website at www.azdor.gov for a listing of approved efile providers and on-line filing sources. ** For free e-file requirements, check out our website at www.azdor.gov. NOTE: FOR ALL COMPOSITE NONRESIDENT PERSONAL INCOME TAX RETURNS • If this return is filed as a Nonresident Composite Personal Income Tax Return, check box 13 on page 1 of the return and see the instructions, beginning on page 29, for completing a composite return. • A composite nonresident return cannot be e-filed. Partnerships and S corporations filing a composite return on behalf of its nonresident partners or nonresident shareholders must mail Form 140NR to the department. AVOID PROCESSING DELAYS: Are you mailing your Arizona income tax return? If you are mailing your return to the department, see the last page of these instructions for assembly order (for sequence) information. Are You Subject to Tax in Arizona? If you are in this state for a temporary or transitory purpose or did not live in Arizona but received income from sources within Arizona during 2022, you are subject to Arizona tax. You are subject to Arizona income tax on all income derived from Arizona sources. Income from Arizona sources includes the following: • wages; • rental income; • business income; • the sale of Arizona real estate; • interest and dividends having a taxable or business situs, in this state; and • any other income from an Arizona source. Do You Have to File? Arizona Filing Requirements These rules apply to all Arizona taxpayers. You must file if you are: and your gross income is more than: • Single $12,950 • Married filing joint $25,900 • Married filing separate $12,950 • Head of Household $19,400 If you are a nonresident, you must report income derived from Arizona sources. To determine if you meet the gross income threshold amount above, multiply the amount by the percentage of your federal adjusted gross income that represents your Arizona gross income (income ratio shown on line 27 of Form 140NR). To see if you have to file, figure your gross income the same as you would figure your gross income for federal income tax purposes. Then you should exclude income that Arizona law does not tax. Income that Arizona law does not tax includes: • interest from U.S. Government obligations; • social security retirement benefits received under Title II of the Social Security Act; • benefits received under the Railroad Retirement Act, tier 1 or tier 2 railroad retirement benefits, railroad disability benefits reported on federal forms RRB-1099 and RRB1099-R, railroad unemployment benefits and railroad sickness payments paid by the Railroad Retirement Board; • pay received for active service as a member of the Reserves, National Guard, or the U.S. Armed Forces; or • benefits, annuities and pensions as retired or retainer pay of the uniformed services of the United States Income earned by a qualifying out-of-state employee from performing qualified disaster recovery work during a disaster period is exempt from Arizona income tax. For more information, see the instructions for line 15. 7 Arizona Form 140NR Determining Residency Status NOTE: Even if you do not have to file, you must still file a return to get a refund of any Arizona income tax withheld. If you are not sure if you are an Arizona resident for state income tax purposes, we may be able to help. For more information, see the department’s procedure, ITP 92-1, Procedure For Determining Residency Status. Do You Have to File if You Are an American Indian? You must file if you meet the Arizona filing requirements unless all the following apply to you: • • • Residents You are an enrolled member of an Indian tribe. You live on the reservation established for that tribe. You earned all of your income on that reservation. You are a resident of Arizona if your domicile is in Arizona. Domicile is the place where you have your permanent home. It is where you intend to return if you are living or working temporarily in another state or country. If you leave Arizona for a temporary period, you are still an Arizona resident while gone. A resident is subject to Arizona tax on all income no matter where the resident earns the income. For information on the Arizona tax treatment of American Indians, see the department’s ruling, ITR 96-4, Income Taxation of Indians and Spouses. Do You Have to File if You Are The Spouse of an American Indian and You Are Not an Enrolled Indian? If you are a full year resident, you must file Arizona Form 140, Form 140A, or Form 140EZ. Part-Year Residents You must file if you meet the Arizona filing requirements. For more information, see the department’s ruling, ITR 96-4, Income Taxation of Indians and Spouses. If you are a part-year resident, you must file Arizona Form 140PY, Part-Year Resident Personal Income Tax Return. You are a part-year resident if you did either of the following during 2022: • You moved into Arizona with the intent of becoming a resident. • You moved out of Arizona with the intent of giving up your Arizona residency. Do You Have to File if You Are in the Military? NOTE: If you were an Arizona resident when you entered the service, you remain an Arizona resident, no matter where you are stationed, until you establish a new domicile. For more information, see the instructions under Residency Status. You must file if you meet the Arizona filing requirements unless all the following apply to you: • You are an active duty member of the United States armed forces. • Your only income for the taxable year is pay received for active duty military service. • There was no Arizona tax withheld from your active duty military pay. If Arizona tax was withheld from your active duty military pay, you must file an Arizona income tax return to claim any refund you may be due from that withholding. Nonresidents You must also file an Arizona income tax return if you have any other income besides pay received for active duty military service. If the deceased taxpayer did not have to file a return but had tax withheld, a return must be filed to get a refund. If you are a nonresident (including nonresident aliens), you must file Arizona Form 140NR, Nonresident Personal Income Tax Return. What if a Taxpayer Died? If a taxpayer died before filing a return for 2022, the taxpayer's spouse or personal representative may have to file and sign a return for that taxpayer. A personal representative can be an executor, administrator, or anyone who is in charge of the deceased taxpayer’s property. The person who files the return should use the form the taxpayer would have used. The person who files the return should print the word "deceased" after the decedent's name. Also, enter the date of death after the decedent's name. If you are not an Arizona resident, but you are stationed in Arizona, the following applies to you: • You are not subject to Arizona income tax on your military pay. If your spouse died in 2022 and you did not remarry in 2022 or if your spouse died in 2023 before filing a return for 2022, you may file a joint return. If your spouse died in 2022, the joint return should show your spouse's 2022 income before death and your income for all of 2022. If your spouse died in 2023, before filing the 2022 return, the joint return should show all of your income and all of your spouse's income for 2022. Print "Filing as surviving spouse" in the area where you sign the return. If someone else is the personal representative, he or she must also sign the return. You must report any other income you earn in Arizona. Use Form 140NR, Nonresident Personal Income Tax Return, to report this income. To find out more, see the department’s publication, Pub. 704, Taxpayers in the Military. • If You Included Your Child's Unearned Income on Your Federal Return, Does Your Child Have To File An Arizona Return? No. The child should not file an Arizona return. The parent must include that same income in their Arizona taxable income. 2 8 Arizona Form 140NR Are any Other Returns Required? When Should You File if You Are a Nonresident Alien? You may also have to file a fiduciary income tax return (Form 141AZ). For details about filing a fiduciary income tax return, call the department at (602) 255-3381. 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 15, 2023, even though your federal return is due on June 15, 2023. Because April 15, 2023 falls on a weekend, and April 17, 2023 falls on a federal holiday, you have until Tuesday, April 18, 2023 to timely file your 2022 tax return. If you want to file your Arizona return after April 18, 2023, you must ask for a filing extension. You must file this request by April 18, 2023. Arizona will allow up to a 6-month extension. This will allow you to file your return by October 15, 2023. See Form 204 for extension filing details. Because October 15, 2023 falls on a weekend, you have until Monday, October 16, 2023 to timely file your 2022 tax return. See Form 204 for extension filing details. Claiming a Refund for a Deceased Taxpayer If you are claiming a refund for a deceased taxpayer, you must complete Arizona Form 131, Claim for Refund on Behalf of Deceased Taxpayer. If you are claiming a refund on Form 140NR-SBI for a deceased taxpayer, you must also complete Arizona Form 131-SBI, Claim for Refund on Behalf of Deceased Taxpayer. Place both forms on top, when mailing the returns. What are the Filing Dates and Penalties? NOTE: If the due date for an income tax or related payment falls on a weekend and/or legal holiday, the filing or payment is considered timely if filed or paid on the next business day and that business day is a day other than Saturday, Sunday or a legal holiday. 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 16, 2023, even though your federal return will not be due until December 15, 2023. If you file your 2022 Arizona calendar year return after October 16, 2023, your return will be late. When Should You File? Your 2022 calendar year tax return is due no later than midnight, April 15, 2023. File your return as soon as you can after January 1, 2023, but no later than April 15, 2023. Because April 15, 2023 falls on a weekend, and April 17, 2023 falls on a federal holiday, you have until Tuesday, April 18, 2023 to timely file your 2022 tax 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. 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. What if You File or Pay late? 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 2022 calendar year return by April 18, 2023, 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. For more information, see “Mailing Your Return” at the end of these instructions. What if You Cannot File on Time? You may request an extension if you know you will not be able to file on time. If you request an extension to file your 2022 calendar year tax return, your due date is October 15, 2023. Because October 15, 2023 falls on a weekend, you have until Monday, October 16, 2023 to timely file your 2022 tax return. Late Filing Penalty NOTE: An extension does not extend the time to pay your income tax. See the instructions for Arizona Form 204. 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. 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, 2023. 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 (above your name) 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. Late Payment Penalty 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. • 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 (above your name) 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 3 9 Arizona Form 140NR each 30-day period or a 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). Do You Need to Make Arizona Estimated Payments in 2023? You must make Arizona estimated income tax payments during 2023 if: AND AND your Arizona your Arizona Your filing status is: gross income gross income for 2022 was for 2023 is greater than: greater than: Single $ 75,000 $ 75,000 Married filing joint $150,000 $150,000 Married filing separate $ 75,000 $ 75,000 Head of Household $ 75,000 $ 75,000 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. If you met the income threshold for 2022, you must make estimated payments during 2023 unless you are sure you will not meet the threshold for 2023. As a nonresident, your Arizona gross income is that part of your federal adjusted gross income derived from Arizona sources. Your Arizona gross income is on line 26 of the 2022 Form 140NR. When Should You Amend a Return? If you need to make changes to your return after you have filed, do not file a new return using Form 140NR. You must file Arizona Form 140X, Individual Amended Income Tax Return. File your amended return after your original return has processed. Generally, you have four years to amend a return to claim a refund. Use the worksheet for Arizona Form 140ES to figure how much your payments should be. For more information about making estimated payments, see the department’s publication, Pub. 012, Arizona Individual Estimated Income Tax Payments. If you amend your federal return for any year, you must also file an Arizona Form 140X for that year. What if You Make Your Estimated Payments Late? If the IRS makes a change to your federal taxable income for any year, you must report that change to Arizona. You must file Form 140X within 90 days of the final determination of the IRS. You may use one of the following two options to report this change. We will charge you a penalty if you are late or if you fail to make any required payments. See Arizona Form 221. Can You Make Estimated Payments Even if You Do Not Have To? Option 1 If you do not have to make Arizona estimated income tax payments, you may still choose to make them. For details, see Arizona Form 140ES. You may file a Form 140X for that year. If you choose this option, you must amend and mail your Arizona return within 90 days of the final determination of the IRS. Include a complete copy of the federal notice with your Form 140X. Line-by-Line Instructions Option 2 Tips for Preparing Your Return You may file a copy of the final federal notice with the department within 90 days of the final determination of the IRS. If you choose this option, you must include a statement in which you must: 1. 2. • • Request that the department recompute your tax. Indicate if you agree or disagree with the federal notice. • • If you do not agree with the federal notice, you must also include any documents that show why you do not agree. If you choose Option 2, mail the federal notice and any other documents to Individual Income Audit Arizona Department of Revenue PO Box 29084 Phoenix, AZ 85038-9084 • • • 4 10 You must complete your federal return before you can start your Arizona return. Make sure that you enter your Social Security Number (SSN) on your return. Complete your return using black ink. You must round dollar amounts to the nearest whole dollar. If 50 cents or more, round up to the next dollar. If less than 50 cents, round down. Do not enter cents. If you are mailing your return, see the last page of these instructions for the assembly order. Make sure you include your daytime telephone number. If filing a fiscal year return, fill in the period covered. Arizona Form 140NR Entering Your Name, Address, and SSN Determining Your Filing Status The filing status that you use on your Arizona return may be different from that used on your federal return. Lines 1, 2, and 3 NOTE: Make sure that you enter your SSN on the appropriate line and your SSN is correct. If you are filing a joint return, also make sure that you enter your SSNs in the same order every year. Use this section to determine your filing status. Check the correct box (4 through 7) on the front of Form 140NR. 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. Enter 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 first names. If your name appears first on the return, make sure your SSN is the first number listed. 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). Box 4 - Married Filing Joint Return If you are married filing separately, enter your name and SSN on the first line 1. Enter your spouse’s name and SSN on the second line 1. 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, 2022. 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. 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. You may file a joint return if your spouse died during 2022 and you did not remarry in 2022. See page 2 of these instructions for details. 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. If you are married to an Arizona full year resident, you may file a joint return with your Arizona resident spouse. If filing a joint return with your Arizona resident spouse, you must use Form 140NR. NOTE: If a partnership or S corporation files a composite return on behalf of its nonresident partners or shareholders, the entity filing the return should enter its EIN in place of the SSN. For example, if the entity’s EIN is 98-7654321, the entity would enter its EIN as 987-65-4321. NOTE: For help on filing a joint return with your full-year resident spouse, see the department’s ruling, ITR 14-1, Filing a Joint Tax Return When a Resident Spouse is Married to a PartYear Resident or Nonresident. Use your current home address. The department will mail your refund to or correspond with you at that address. Box 4a - Injured Spouse Protection of Joint Overpayment For a deceased taxpayer, see page 2 of these instructions. Foreign Addresses Check box 4a only if you and your spouse are filing a joint return and you or your spouse qualify as an injured spouse and are requesting protection from application of any joint overpayment against the other spouse’s delinquencies or debts for back child support, court fees, and fees to counties, cities or educational institutions. The taxpayer (spouse) requesting injured spouse protection must have Arizona income with taxes withheld and reported on their own Form W-2 or Form 1099. 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. Last Names Used in Last 4 Prior Years 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 in the last 4 years, enter any other last name(s) that you or your spouse used when filing your return during that period. NOTE: You cannot use Form 203 to request protection from offset for past-due federal taxes. You must contact the IRS. Identification Numbers for Paid Preparers You must complete Arizona Form 203, Request for Injured Spouse Protection from Application of Joint Overpayment Against Spouse’s Delinquencies and Debts, and include that form with your tax return when filed. Place the completed form on top of your income tax return. For more information, see the instructions for Form 203. 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 be subject to a penalty. Box 5 - Head of Household Return If you are filing as a head of household, check box 5. 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: 5 11 Arizona Form 140NR • • You qualify to file as head of household on your federal return, or You qualify to file as a qualifying widow or widower on your federal return. • • 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, 2022, 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. If one spouse is a resident and the other spouse is not, special rules apply when filing a separate return. For more information on how to report income in this case, see the department’s ruling, ITR 93-20, Income Reporting Requirements of Resident and Nonresident Spouses Who File Separate Arizona Individual Income Tax Returns; and the department’s publication, Pub. 200, Income Tax Issues Affecting Married and Divorced Taxpayers. Box 9 - Blind If you or your spouse were partially blind as of December 31, 2022, you must get a statement certified by your eye doctor or registered optometrist that either: • You cannot see better than 20/200 in your better eye with glasses or contact lenses, or • Your field of vision is 20 degrees or less. NOTE: In some cases, you may treat community income as separate income. For more information on when you may treat community income as separate income, see the department’s ruling, ITR 93-22, When Community Income May Be Treated as Separate Income. 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. • If you are single or filing as head of household, enter "1" in box 9 if you are totally or partially blind. • If you are married filing a joint return, enter "1" in box 9 if you or your spouse is totally or partially blind. Enter "2" in box 9 if both you and your spouse are totally or partially blind. Box 7 - Single Return If you are filing as single, check box 7. Use this filing status if you were single on December 31, 2022. You are single if any of the following apply to you: • • • If you are single or filing as head of household, enter "1" in box 8 if you were 65 or older in 2022 and not claimed as a dependent by another taxpayer. If you are married filing a joint return, enter "1" in box 8 if you were 65 or older and not claimed as a dependent by another taxpayer or your spouse was 65 or older in 2022 and not claimed as a dependent by another taxpayer. Enter "2" in box 8 if both you and your spouse were 65 or older in 2022 and neither of you are claimed as a dependent by another taxpayer. If you are married and filing a separate return, enter "1" in box 8 if you were 65 or older and not claimed by another taxpayer. You cannot take an exemption for your spouse. Your spouse, if 65 or older and not claimed by another taxpayer, may take this exemption on his/her own separate return. You have never been married. You are legally separated under a decree of divorce or of separate maintenance. You were widowed before January 1, 2022, you did not remarry in 2022, 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 ruling, ITR 14-2, Reporting Income, Deductions, Exemptions, and Withholding for Divorced Individuals for the Year of Divorce; and publication, Pub. 200, Income Tax Issues Affecting Married and Divorced Taxpayers. If you are married and filing a separate return, you may take an exemption for yourself if you are totally or partially blind. You may only claim an exemption for your spouse if your spouse (1) is totally or partially blind, (2) has no Arizona adjusted gross income for calendar year, and (3) is not the dependent of another taxpayer. Enter "1" in box 9 if you are totally or partially blind or your spouse is totally or partially blind and your spouse meets the above criteria. Enter “2” in box 9 if you are totally or partially blind and your spouse is totally or partially blind and your spouse meets the above criteria, and your spouse meets the above criteria. Exemptions - Boxes 8 and 9 Enter the number of exemptions you are claiming in boxes 8 and 9. Do not put a check mark or “X”. You may lose the exemption if you put a checkmark or “X” in these boxes. Dependents - Boxes 10a and 10b Box 8 - Age 65 or Over Boxes 10a and 10b NOTE: If a taxpayer’s 65th birthday was January 1, 2023 (born 1/1/58), that person is considered to be age 65 at the end of 2022 for federal income tax purposes and likewise for Arizona income tax purposes. Boxes 10a and 10b identify the number of your qualifying dependents that are either under the age of 17 (box 10a) or age 17 and over (box 10b). This information is used to compute the allowable Dependent Tax Credit. Include only those 6 12 Arizona Form 140NR Box 13 - Composite Return dependents in box 10a or 10b that you are using to compute the allowable Dependent Tax Credit on line 59. Check box 13 if this is a composite return filed by a partnership on behalf of its nonresident partners or an S corporation on behalf of its nonresident shareholders. Lines 10c through 10f You must complete the dependent information section (lines 10c through 10f on page 1 (and Part 1 on page 4, if more space is needed), for each person counted in either box 10a or 10b. Be sure to check the box on page 1 indicating you are completing page 4. For a list of qualifications and additional information on filing an Arizona composite nonresident income tax return, see the department’s ruling, ITR 16-2, Composite Individual Income Tax Returns. You may claim only those individuals that qualify as your dependent for federal purposes. For each qualifying individual, enter the following information: a) first and last name; b) SSN; c) relationship to taxpayer; d) the number of months this person lived in your home; 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. Your 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 box 1 (for box 10a) if this person is under the age of 17 or - check box 2 (for box 10b) if this person is age 17 or over; and f) check the box if you did not claim this person on your federal return due to educational credits. IMPORTANT – SPECIAL INSTRUCTIONS FOR COMPOSITE RETURNS: Go to page 29 to complete a composite nonresident personal income tax return. Determining Arizona Income Line 14 - Spouse of Active Duty Military Member Check the box on line 14 if you are married and the spouse of an active duty military member, and you qualify for relief under the Military Spouses Residency Relief Act. For information about who qualifies for relief, see the department’s publication, Pub. 705, Spouses of Active Duty Military Members. Use lines 15 through 27 to determine what portion of your total income is taxable by Arizona. NOTE: If you are unable to determine the proper line to use, please call one of the numbers listed on page 1. FEDERAL Column Enter the actual amounts shown on your 2022 federal income tax return in the FEDERAL column. Complete lines 15 through 25. Line 25 should equal the federal adjusted gross income shown on your 2022 federal Form 1040 or Form 1040NR. ARIZONA Column Enter that portion of your federal income received from Arizona sources in the ARIZONA column. Such income includes wages earned in Arizona, Arizona rental and business income, and gains on the sale of Arizona property. NOTE: If you did not claim a dependent who is 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 dependent on your Arizona return. For more information, see the department’s ruling, ITR 05-2, Will Arizona Allow a Dependent Exemption When a Taxpayer Does Not Claim Federal Exemption in Order to Claim the Education Credit? NOTE: If you are filing a joint return with your full year resident spouse, you must enter your Arizona source income in the ARIZONA column and your spouse must enter all income from all sources in the ARIZONA column. For details, see the department’s ruling, ITR 14-1, Filing a Joint Tax Return When a Resident Spouse is Married to a Part-Year Resident or Nonresident. You may lose the dependent tax credit if you do not furnish this information. Enter the total number of dependents in box 10a and 10b. Reporting Your Residency Status The Tax Reform Act of 1986 limits the amount of losses that you may deduct from passive activities. A passive activity is one that involves the conduct of any trade or business in which the taxpayer does not materially participate. Check the appropriate box (11 through 13). Check only one box. Box 11 - Nonresident As a nonresident, your Arizona gross income may include some of these losses. You may consider only those passive losses that arose from Arizona sources. Your 2022 Arizona gross income can include only Arizona source losses you used on your 2022 federal return. Check box 11 if you were not an Arizona resident during 2022, and were not on active military duty in Arizona. Box 12 - Nonresident Active Military Check box 12 if you were a nonresident on active duty military assignment in Arizona during 2022. 7 13 Arizona Form 140NR For the purpose of this exemption, a qualifying out-of-state business is a business that is temporarily in Arizona to solely perform qualified disaster recovery work during a disaster period. For more information, see the department’s publication, Pub. 720, Disaster Recovery Tax Relief. Line 20 - Gains or (Losses) Lines 15 through 24 – Arizona column The following line-by-line instructions apply to the ARIZONA column. Line 15 - Wages, Salaries, Tips, etc. Enter all amounts received for services performed in Arizona. Income earned by a qualifying out-of-state employee, from performing qualified disaster recovery work during a disaster period, is exempt from Arizona income tax. Exclude this income from line 15 in the Arizona column. Enter gains or (losses) on sales of Arizona sourced property. Enter the total Arizona sourced net capital gain or (loss) used to determine the amount 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. For the purpose of this exemption, a qualifying out-of-state employee is an Arizona nonresident individual who is temporarily in Arizona to solely perform qualified disaster recovery work during a disaster period. For more information, see the department’s publication, Pub. 720. NOTE: If you reported the maximum allowable net capital (loss) for the current taxable year on your federal return, enter the total amount of Arizona sourced loss used to compute the net capital loss claimed on your federal return. NOTE: Active Duty Military Members - Do not include active duty military pay unless the active duty military member is an Arizona resident filing a joint return with his or her Arizona nonresident spouse on Form 140NR. If you are an Arizona resident active duty military member including military pay on line 15 in the “ARIZONA” column, also include that amount in the amount entered as an “Other Subtraction From Income” on page 2, line 45. For example: A single taxpayer has a $3,000 capital gain from property in State XYZ and a ($7,000) capital (loss) from property in Arizona resulting in a ($4,000) net federal capital loss. [$3,000 gain – ($7,000 loss) = ($4,000 net loss)] Because the taxpayer is limited to claiming a loss in the amount of ($3,000) on the federal tax return, the taxpayer must carryforward the remaining amount of the loss ($1,000) for federal purposes. [($4,000 actual loss) – $3,000 limit = ($1,000 loss carryforward)] NOTE: Spouses of Active Duty Military Members If you are the spouse of an active duty military and you qualify for relief under the Military Spouses Residency Relief Act, do not enter any wages, salaries, or tips you earned during the taxable year for services performed in Arizona. Line 16 - Interest If you have an Arizona business, enter only interest (including U.S. Government interest) you earned on accounts pledged as collateral. Also, enter your distributive share of interest from a partnership doing business in Arizona or an S corporation doing business in Arizona. Do not include any other interest income, even if it was earned in Arizona banks. For the current tax year: the Arizona nonresident taxpayer would enter the loss actually used, ($6,000), on line 20 of the Arizona column. [($7,000) – ($1,000 carryforward) = ($6,000)]. • In the year the carryforward amount is used for federal purposes, assuming the taxpayer has no other gains or (losses), the taxpayer would enter the remaining Arizona sourced capital loss ($1,000) on line 20 of the Arizona column. Line 21 - Rents, etc. Enter the following income on line 21: • Rent or royalty income earned on Arizona properties. • Income from Form 141AZ Schedule K-1(NR), line 2 from estates or trusts. • Income or (loss) from Schedule(s) K-1(NR) from Arizona partnerships (Arizona Form 165) or small business corporations (Arizona Form 120S). Line 17 - Dividends If you have an Arizona business, enter only those dividends earned on stocks pledged as collateral, including dividends from small business corporations. Also, enter your distributive share of dividend income from a partnership doing business in Arizona or an S corporation doing business in Arizona. Do not include any other dividend income. Line 22 - Other Income Reported on Your Federal Return Line 18 - Arizona Income Tax Refunds Enter the amount of Arizona income tax refunds received in 2022 that you included in your federal adjusted gross income. Enter other income from sources within Arizona. Do not include pension income or social security taxed by the federal government. Include your own schedule with the tax return. Line 19 - Business Income or (Loss) Line 23 - Total Income Add lines 15 through 22 and enter the total. Enter income or (loss) from Arizona businesses. Income earned by a nonresident who is a sole owner of a qualifying out-of-state business from performing qualified disaster recovery work during a disaster period is exempt from Arizona income tax. Exclude this income from line 19 in the Arizona column. Line 24 - Other Federal Adjustments On line 24, include any other federal adjustments included in your federal adjusted gross income that are attributable to the Arizona source income reported on your 2022 Arizona nonresident return. 8 14 • Arizona Form 140NR included on Schedule D). For more information, see Form 140NR-SBI and instructions. Additional information and guidance can be found in the department’s Publication 712, Summary of Arizona Small Business Income and Taxation. Line 25 - Federal Adjusted Gross Income Subtract line 24 from line 23 in the FEDERAL column. Line 26 - Arizona Gross Income Subtract line 24 from line 23 in the ARIZONA column. Line 27 - Arizona Income Ratio How do I elect to report small business income on Arizona Form 140NR-SBI? Divide line 26 by line 25 and enter the result on line 27. You must round your answer to three decimal places. Do not enter more than 1.000. Do not include the percent sign (%) with the amount entered on line 27. Taxpayers make the election by simply completing Form 140NR-SBI reporting their small business income and including the completed form with their Form 140NR tax return, when filed. This is your Arizona income ratio of your total income. Examples: Arizona Gross Income from line 26 $ 17,516 $ 25,650 Federal Adjusted Gross Income from line 25 $ 32,000 $ 92,100 17,516/32,000 = .547375 enter on line 27: . $ 9,000 • • • • • 4 7 Line 28 - Small Business Income 2 7 If you elect to report your small business income on Arizona Form 140NR-SBI, check the box on line 28 and enter the amount of small business income reported on Form 140NR-SBI, line 10. 9 10,000/9,000 = 1.11111 enter on line 27: 1 • 5 Modified Arizona Gross Income 25,650/92,100 = .278501 enter on line 27: . $ 10,000 NOTE: You must include Form 140NR-SBI with your Form 140NR, when filed. If you do not include Form 140NR-SBI with your Form 140NR, processing of your return may be delayed or your subtraction on line 28 may be denied. See the Mailing instructions for the correct address when mailing both Form 140NR and Form 140NR-SBI. Arizona income ratio . 0 0 If you are not making this election, enter “0” on line 28. Line 29 – Modified Federal Adjusted Gross Income 0 Subtract line 28 from line 26. If Arizona gross income and federal adjusted gross income are both positive and Arizona’s gross income is greater than the federal adjusted gross income, enter 1.000 on line 27. If Arizona gross income is positive (greater than zero), and federal adjusted gross income is equal to or less than zero (negative), enter 1.000 on line 27. If Arizona gross income is equal to or less than zero (negative), and federal adjusted gross income is more than zero, enter 0.000 on line 27. If Arizona gross income and federal adjusted gross income are both zero, enter 1.000 on line 27. If Arizona gross income is zero, and federal adjusted gross income is negative, enter 0.000 on line 27. If Arizona gross income and federal adjusted gross income are both negative, divide the Arizona amount by the federal amount and enter the result on line 27. The result cannot be more than 1.000. Additions to Income NOTE: • If you are electing to report your Arizona sourced small business income on Form 140NR-SBI and if any of the following additions are directly related to the small business income, report that addition on Form 140NRSBI. If the addition is not directly related to small business income, make the addition on Form 140NR. • If you are not filing Form 140NR-SBI, make that addition on Form 140NR. As a nonresident, include only those additions listed below that are related to Arizona source income reported on Form 140NR. Line 30 - Total Depreciation Included in Arizona Gross Income If you are making the small business election and this addition is directly related to small business income reported on Form 140NR-SBI, do not report the addition on Form 140NR, enter the addition on Form 140NR-SBI. Enter the amount of depreciation deducted on the federal return that is included in Arizona gross income. If you make an entry here, you should also take a subtraction on line 40 for allowable depreciation attributable to assets used in your Arizona business. See the instructions for line 40. Arizona Small Business Tax Return Individuals may elect to report their small business income on Arizona Form 140NR-SBI, Small Business Income, for the small business income amount included in their federal adjusted gross income. An individual’s small business income is reported on federal Schedules B, C, D, E, F and Form 4797 (for amounts not 9 15 Arizona Form 140NR Line 31 - Partnership Income Adjustment (Positive) C. Claim of Right Adjustment for Amounts Repaid in 2022 If you are making the small business election and this addition is directly related to small business income reported on Form 140NR-SBI, do not report the addition on Form 140NR, enter the addition on Form 140NR-SBI. NOTE: For items C and D; taxpayers that made the election to file an Arizona Small Business Income Tax Return in 2022, if the income required to be paid back under the claim of right is the type of income that would be included in lines 4 through 9 of the 140NR-SBI return if the income were reported in 2022, the adjustment should be made in the 140NR-SBI return. All other claim of right adjustments should be made on the regular 140NR return. Depending on your situation, you may either add (line 31) or subtract (line 41) this amount. Use this adjustment if line 17, column (c) of your Arizona Form 165 Schedule K-1(NR), shows a difference between federal and state distributable income. If the difference reported on line 17, column (c) of your Arizona Form 165 Schedule K-1(NR) is a positive number, enter that portion of the difference that is allocable to partnership income taxable by Arizona as an addition on line 31. You must make an entry here if all of the following apply: 1. During 2022, you were required to repay amounts held under a claim of right. 2. The amount required to be repaid was subject to Arizona income tax in the year included in income. 3. The amount required to be repaid during 2022 was more than $3,000. 4. You took a deduction for the amount repaid on your 2022 federal income tax return. 5. The deduction taken on your federal income tax return is reflected in your Arizona taxable income. If the above apply, include the amount deducted on your federal income tax return which is reflected in your Arizona taxable income. For more information see the department’s procedure, ITP 16-1, Procedure for Individuals Who Restore Substantial Amounts Held Under a Claim of Right. NOTE: If the difference reported on line 17, column (c) of your Arizona Form 165 Schedule K-1(NR) is a negative number, enter the portion of the difference that is allocable to partnership income taxable by Arizona as a subtraction on line 41. Line 32 - Other Additions to Arizona Gross Income Use line 32 if any of the special circumstances below apply. NOTE: If you are reporting any adjustment on line 32, complete the schedule on page 5 of your tax return, Other Additions to Arizona Gross Income, and include it with your return. If you are not reporting any adjustment on line 32, do not include page 5 with your return. D. 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 2022, you were required to repay income 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 2022 Arizona taxable income. 5. The amount of the loss carryover included in your Arizona gross income is more than the amount allowed to be taken into account for Arizona purposes. Include the amount by which the loss carryover included in your Arizona gross income is more than the amount allowed for the taxable year under Arizona law. A. Fiduciary Adjustment - Form 141AZ Schedule K-1(NR) If you are making the small business election and this addition is directly related to small business income reported on Form 140NR-SBI, do not report the addition on Form 140NR, enter the addition on Form 140NR-SBI. A fiduciary uses Form 141AZ Schedule K-1(NR) to report to you your share of the fiduciary adjustment from the trust or estate. Line 5 of Form 141AZ Schedule K-1(NR) shows your share of the fiduciary adjustment from the estate or trust. Depending on your situation, you may either add (line 32) or subtract (line 45) this amount. If the amount reported on line 5 of your Arizona Form 141AZ, Schedule K-1(NR) is a positive number, include that amount as an addition on line 32. NOTE: If the amount reported on line 5 of your Arizona Form 141AZ Schedule K-1(NR) is a negative number, include that amount as a “Subtraction from Income” on line 45. E(a) Addition Due to Claiming the Agricultural Water Conservation System (Credit 312) You must make an addition to income for the amount of expenses disallowed by reason of claiming the credit. See the instructions for completing Credit Form 312. B. 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 back such amounts to your Arizona gross income. E(b). Addition to S Corporation Income Due to Claiming Pass-Through Credit for Agricultural Water Conservation system (Credit 312) If you are making the small business election and this addition is directly related to small business income 10 16 Arizona Form 140NR reported on Form 140NR-SBI, do not report the addition on Form 140NR, enter the addition on Form 140NR-SBI. 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 subtraction does not apply. Shareholders of an S corporation who claim a credit passed through from an S corporation must make an addition to their income for the amount of expenses disallowed by reason of claiming the credit. If you are making the small business election and this addition is directly related to small business income reported on Form 140NR-SBI, do not report the addition on Form 140NR, enter the addition on Form 140NR-SBI. 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 (Form 312-S, line 1). Shareholders must include an amount on this line when claiming the Agricultural Water Conservation System Credit (Form 312). See the instructions for completing Credit Form 312. 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 may subtract the amount of the income from the dispensary that is included in the computation of your federal adjusted gross income. F(a) Adjusted Basis in Property for Which You Have Claimed a Credit for Investment in Qualified Small Businesses (Credit 338) In addition, a sole proprietorship of an Arizona dual licensee that has not elected to operate on a for-profit basis may subtract the portion of income included in federal adjusted gross income that is from the medical marijuana portion of the business. If you are making the small business election and this addition is directly related to small business income reported on Form 140NR-SBI, do not report the addition on Form 140NR, enter the addition on Form 140NR-SBI. 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 2022 taxable year, include the amount by which the adjusted basis computed under the Internal Revenue Code (IRC) with respect to that property exceeds the adjusted basis of the property computed under A.R.S. §
Extracted from PDF file 2022-arizona-form-140nr.pdf, last modified November 2022

More about the Arizona Form 140NR Individual Income Tax Nonresident TY 2022

This is the nonresident income tax return for Arizona. This easy to use package features "Fill it in...It does the math".

We last updated the Nonresident Personal Income Tax Package in February 2023, so this is the latest version of Form 140NR, fully updated for tax year 2022. You can download or print current or past-year PDFs of Form 140NR directly from TaxFormFinder. You can print other Arizona tax forms here.


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Related Arizona Individual Income Tax Forms:

TaxFormFinder has an additional 95 Arizona income tax forms that you may need, plus all federal income tax forms. These related forms may also be needed with the Arizona Form 140NR.

Form Code Form Name
Form 140NR-A Schedule A (NR) - Itemized Deductions for Nonresidents
Form 140NR-SBI Small Business Income Tax Return (Nonresident, 140NR-SBI)

Download all AZ tax forms View all 96 Arizona Income Tax Forms


Form Sources:

Arizona usually releases forms for the current tax year between January and April. We last updated Arizona Form 140NR from the Department of Revenue in February 2023.

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Form 140NR is an Arizona Individual Income Tax form. Many states have separate versions of their tax returns for nonresidents or part-year residents - that is, people who earn taxable income in that state live in a different state, or who live in the state for only a portion of the year. These nonresident returns allow taxpayers to specify which which income is subject to the state's taxes, and which is not.

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!

Historical Past-Year Versions of Arizona Form 140NR

We have a total of twelve past-year versions of Form 140NR in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:


2022 Form 140NR

Arizona Form 140NR

2021 Form 140NR

Arizona Form 140NR

2020 Form 140NR

Arizona Form 140NR

2019 Form 140NR

Arizona Form 140NR

2017 Form 140NR

Arizona Form 140NR

2016 Form 140NR

Arizona Form 140NR

Nonresident Personal Income Tax Return 2014 Form 140NR

Arizona Form 140NR

Nonresident Personal Income Tax Return 2011 Form 140NR

Arizona Form 140NR


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