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Arizona Free Printable Arizona Form 140PY for 2022 Arizona Part-Year Resident Personal Income Tax Package

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Part-Year Resident Personal Income Tax Package
Arizona Form 140PY

2 21 Arizona Form 140PY Part-Year Resident Personal Income Tax This Booklet Contains: • Form 140PY – Part-Year Resident Personal Income Tax Return Who must use Arizona Form 140PY? • Schedule A(PY) – Itemized Deductions File a Form 140PY if you were an Arizona resident for less than 12 months during 2021. • Form 204 – Extension Request Where’s my Refund? Check your refund status at www.AZTaxes.gov View your 1099-G online at AZTaxes.gov 1099-Gs will no longer be mailed; print a copy of your 1099-G online at AZTaxes.gov Before using paper, consider FILE ONLINE! Fast: Faster processing of your refund and money in your account sooner. 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.  Pay your taxes by credit card! American Express  Visa  Discover Card  MasterCard 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 it will adopt changes made to the federal tax laws in the prior year. These forms assume the Legislature will adopt all federal law changes made after January 1, 2021. If you use the amounts from your 2021 federal tax return to complete your Arizona return and the Legislature does not adopt the 2021 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 2021 conformity. THIS PAGE INTENTIONALLY LEFT BLANK 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 2021, except for changes Congress made to the federal tax code during 2021 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 2022. 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 March 11, 2021. What does this mean to you? It means that if any of the federal law changes made after March 11, 2021 apply to your 2021 return, you can opt to file your 2021 return using one of the following methods: 1. You can wait and file your 2021 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 2021 return assuming that the federal law changes will be adopted. The 2021 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 2021 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 2021 return and you file and pay the required amended return by the extended due date of your 2022 return. 3. You can file your 2021 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 March 11, 2021. 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 2021 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. 1 THIS PAGE INTENTIONALLY LEFT BLANK 2 Individual Income Tax - Highlights 2021 Due Date for Calendar Year Filers Arizona Small Business Income (SBI) Tax Your 2021 individual income tax return is due by midnight on April 15, 2022. However, because April 15, 2022 falls on a federal holiday, you have until Monday, April 18, 2022 to timely file your 2021 tax return. If you file under a valid extension, your extended due date to file your income tax return is October 15, 2022. However, because October 15, 2022 falls on a Saturday, you have until Monday, October 17, 2022 to timely file your 2021 tax return. On July 9, 2021, Governor Doug Ducey signed into law Senate Bill 1783, creating a small business income tax by enacting Arizona Revised Statutes (A.R.S.) § 43-1701, effective for tax years beginning from and after December 31, 2020. The small business income tax rate for tax year 2021 is 3.5% of the amount of a taxpayer’s computed Arizona small business taxable income. Taxpayers filing Arizona Form 140, 140NR or 140PY with small business income reported on Federal Schedules B, C, D, E, F and Form 4797 and included in their federal adjusted gross income may voluntarily elect to report their small business income on the corresponding Arizona Small Business Income Tax return (Form 140-SBI (full-year resident), 140NR-SBI (nonresident) or 140PY-SBI (partyear resident)). This election is made annually by simply timely filing an SBI return and does not bind the taxpayer to having to report small business income separately in subsequent tax years. 2021 Changes to Income Tax Forms Due to recent modifications to 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). 2021 Arizona Standard Deduction Amounts Adjusted The 2021 Arizona standard deduction amounts are: • • • $12,550 for a single taxpayer or a married taxpayer filing a separate return; $25,100 for a married couple filing a joint return; and $18,800 for individuals filing a head of household return. Taxpayers who elect to report small business income on one of the forms listed above are required to adjust their regular income tax returns by reducing their federal adjusted gross income by the amount of small business income reported on the SBI returns. Change to Standard Deduction Increase for Charitable Contributions Computation Several new forms were created relating to the SBI tax form. They include, but are not limited to, the following. • Form 301-SBI (nonrefundable tax credits claimed on the SBI tax return). • Form 309-SBI (Credit for taxes paid to another state or country on Arizona small business income). • Form 204-SBI for making extension payments for the small business income tax return. For tax year 2021, taxpayers who did not itemize deductions on their 2021 federal return and elected to take the standard deduction on their Arizona tax returns are not required to reduce the total amount of their 2021 qualifying charitable contributions by the amount for which they took the allowable charitable contribution deduction on their federal tax returns. 2021 Individual Income Adjusted for Inflation Tax For more information including filing requirements, see the SBI form and instructions applicable for your residency status. Brackets For 2021, the Arizona individual income tax brackets on Tax Table X & Y were adjusted for inflation. Subtraction for Contributions College Savings Plan The 2021 Optional Tax Table (for taxpayers with taxable income less than $50,000) was also adjusted for inflation. For specific amounts, see the Optional Tax Table and Tax Table X & Y. Recent legislation amended the amount of allowable contributions directly made to a 529 College Savings Plan on behalf of the designated beneficiary that can be subtracted from Arizona gross income if such contributions were not deducted in computing federal adjusted gross income. For tax year 2021, taxpayers may subtract the amount contributed during the year up to a maximum of $2,000 per beneficiary ($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 per beneficiary. 2021 Tax Surcharge Beginning with tax year 2021, Proposition 208, which was passed by voters in the 2020 general election, requires individuals with taxable incomes of more than $250,000 (single and married filing separate) and more than $500,000 (married filing joint and head of household) to remit an additional tax surcharge. to a 529 For taxpayers subject to the additional tax surcharge, Tax Tables X and Y were modified for 2021 to provide examples to help taxpayers compute and report their regular tax and tax surcharge amounts on their respective income tax returns (Forms 140, 140NR and 140PY). 1 3 Individual Income Tax - Highlights 2021 Subtraction for Contributions to 529A (ABLE) Accounts Credit for Contributions Made to Certified School Tuition Organizations (Form 348) In addition to the allowable subtraction for contributions to a 529 College Savings Plan, certain individual taxpayers may also take a subtraction for contributions made during the taxable year to a 529A, Achieving a Better Life Experience (ABLE) account, during the taxable year on behalf of the designated beneficiary if such contributions were not deducted in computing federal adjusted gross income. The allowable current year credit for contributions to a certified school tuition organization was adjusted for inflation purposes. For 2020, the maximum current year credit is: • $608 for single and head of household taxpayers • $1,214 for married taxpayers filing a joint return • $608 for married taxpayers filing a separate return. New Individual and Corporate Nonrefundable Tax Credit (Form 353, Healthy Forest Production Tax Credit) For tax year 2021, taxpayers may subtract the amount contributed during the year up to a maximum of $2,000 per beneficiary ($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 per beneficiary. A.R.S. §§ 43-1076.01 and 43-1162 provide for nonrefundable individual and corporate income tax credits for processing qualifying forest products. “Qualifying forest products” means dead standing and fallen timber, and forest thinnings associated with the harvest of small diameter timber, slash, wood chips, peelings, brush and other woody vegetation, removed from federal, state and other public forest land and from private forest land. Co-owners of a facility that processes qualifying forest products, including partners in a partnership and shareholders of an S corporation, may each claim a pro rata share of the credit allowed based on ownership interest. For more information on the allowable subtraction for contributions to a 529 plan or 529A account, see the instructions for Forms 140, 140NR or 140PY. Individual Tax Credits - Charitable Contributions: Forms 321,322, 323, 348 and 352 The following credit forms were recently modified to require all taxpayers to provide the date of each contribution claimed on the specific tax credit form: • • • • • For more information, see Credit Form 353 and instructions. Form 321: Contributions to Qualifying Charitable Organizations Form 322: Contributions Made or Fees Paid to Public Schools Form 323: Contributions to Private School Tuition Organizations Form 348: Contributions to Certified School Tuition Organizations Form 352: Contributions to Qualifying Foster Care Charitable Organizations Required Adjustments to Arizona Gross Income Related to Medical Marijuana Dispensary, Testing Facilities and/or Adult Use Marijuana (including dual licensees) (Forms 140, 140NR, 140PY, 140-SBI, 140NRSBI and 140PY-SBI) The following is a list of four required adjustments to Arizona Gross Income related to Medical Marijuana Dispensary, Testing Facilities and/or Adult Use Marijuana (including dual licensees). If any of these apply, see the instructions for the form(s) you are filing. If you are filing a Small Business Income tax return, these adjustments are reported on that return. (Note: line references are for the 2021 tax returns.) 1. Sole Proprietorship Loss of an Arizona Nonprofit Medical Marijuana Dispensary included in Federal Adjusted Gross Income from Schedule C. (Addition) • Forms 140, 140NR and 140PY (page 5) • Forms 140-SBI (line 25); 140NR-SBI (line 24); 140PY-SBI (line 25) 2. Sole Proprietorship Income of an Arizona Nonprofit Medical Marijuana Dispensary included in Federal Adjusted Gross Income from Schedule C. (Subtraction) • Forms 140, 140NR and 140PY (page 6) • Forms 140-SBI (line 45); 140NR-SBI and 140PYSBI (line 42) Tax Credit for Contributions Made or Fees Paid to Public Schools (Form 322) In 2021, Arizona legislation was passed to limit the qualified contributions or fees paid to community school meal programs. The amendment provides that an amount paid by an individual to receive a meal or a meal card does not qualify as a fee or donation for community school meal programs. Credit for Contributions to Private School Tuition Organizations (Form 323) The allowable current year credit for contributions to private school tuition organizations was adjusted for inflation purposes. For 2020, the maximum current year credit is: • $611 for single or head of household taxpayers • $1,221 for married taxpayers filing a joint return • $611 for married taxpayers filing a separate return. 2 4 Individual Income Tax - Highlights 3. 4. 2021 Sole Proprietorship – Marijuana Establishment, Testing Facilities and Dual Licensees That Elected to Operate on a For-Profit Basis. (Subtraction) • Forms 140, 140NR and 140PY (page 6) • Forms 140-SBI (line 46); 140NR-SBI and 140PYSBI (line 43) S Corporation Shareholders of Marijuana Establishments, Testing Facilities and Dual Licensees That Elected to Operate on a For-Profit Basis: individual shareholders pro-rata share of expenses related to sales of adult use products. (Subtraction) • Forms 140, 140NR and 140PY (page 6) • Forms 140-SBI (line 47); 140NR-SBI and 140PYSBI (line 44) 3 5 THIS PAGE INTENTIONALLY LEFT BLANK 6 ARIZONA SMALL BUSINESS INCOME TAX On July 9, 2021 Governor Ducey signed into law Senate Bill 1783 establishing Title 43 Chapter 17 (Small Businesses, which provides for an alternative tax for Arizona small business income. Beginning with tax year 2021, a taxpayer may elect to file a separate small business income tax return (Form 140-SBI, 140NR-SBI or 140PY-SBI) to report the their share of Arizona small business gross income. The election is made separately for each tax year and is effective by reporting Arizona small business income on a timely filed Arizona small business income tax return (SBI). The SBI tax return will be considered timely if filed together with the taxpayer’s regular income tax return on or before the due date (including valid extensions). A taxpayer who elects to file an SBI tax return is required to make an adjustment reducing their federal adjusted gross income reported on the regular individual income tax return (Form 140, 140NR or 140PY) by the total amount of Arizona small business gross income reported on their SBI tax return. The Arizona small business gross income is determined by adding the amounts plus the portion of federal Schedule D that represents capital gains (losses) from the disposition of a non-publically traded ownership interest or from the disposition of a capital asset used in a trade or business. Only amounts that are included in the taxpayer’s federal adjusted gross income may be included in Arizona small business gross income. Note: For Arizona nonresidents, Arizona small business gross income is that portion of federal adjusted gross income that represents small business income from sources within Arizona; for Arizona part-year residents, Arizona small business income includes all small business income earned while a resident and only that portion of small business income from Arizona sources during the period of non-residency included in the taxpayer’s federal adjusted gross income. . The SBI tax return must be filed with the regular income tax return to be accepted. If the taxpayer does not file both returns together, the election may be denied and the adjustment to federal adjusted gross income may be disallowed. A taxpayer may revoke their election on a timely filed amended Arizona small business tax return (Form 140X-SBI) and corresponding amended Arizona individual income tax return (Form 140X). __________________________________________ _________________________________________ Items to consider when filing a Small Business Income tax return The following is provided to give general information when filing a SBI tax return. For more information relating to required adjustments, allowable tax credits and computing the tax amount, see the SBI instructions before completing the SBI tax return. You may also want to review the instructions for the regular tax return before completing the SBI tax return. Forms and instructions are available at: https://azdor.gov/forms/individual Due Date (Forms 204 and 204-SBI) The due date is the same as the due date for a regular individual income tax return. For calendar year filers, the due date is April 15. Because April 15, 2022 falls on a federal holiday, taxpayer’s have until April 18, 2022 to timely file their 2021 Arizona tax returns. If you cannot file your SBI return by the due date, a taxpayer may file Form 204, Application for Filing Extension, providing an automatic 6-month extension to file both the regular and SBI tax returns. The extension request must be filed on or before the original due date. Taxpayers are not required to file a separate Form 204 for the SBI tax return. Form 204 will also provide the same extension period for the SBI return. Generally, an extension request would allow the taxpayer to file on or before October 15. Because October 15, 2022 falls on a weekend, taxpayers have until October 17, 2022 to timely file their 2021 Arizona tax return(s). Note: Keep in mind, an extension request does not provide an extension to pay your small business income taxes. Taxpayers must pay their taxes by the original due date of the return to avoid any late payment penalty. 1 7 ARIZONA SMALL BUSINESS INCOME TAX Form 204-SBI, Extension Payment, is used only to remit a required extension payment for the Small Business Income tax return. Do not file this form to request an extension of time to file the SBI tax return. For more information see Form 204-SBI. AZ Form 301-SBI, Nonrefundable Individual Tax Credits and Recapture, for Small Business Income Most nonrefundable income tax credits available to claim on the regular income tax return are also available to claim on the SBI return. A taxpayer that qualifies for any tax credit shown on page 1 of Form 301-SBI must claim that tax credit on the SBI return and not on the regular individual tax return. The credit cannot be “split” between the two tax returns. However, a taxpayer may “transfer” all or a portion of any nonrefundable tax credit remaining (not used) on the SBI return. To transfer a credit amount, the taxpayer must have a tax liability remaining on their regular income tax return after applying regular return credits against the tax liability shown on the regular individual income tax return. A taxpayer determines if they are eligible to transfer any credit amount and the amount available to transfer by completing page 3 of Form 301-SBI. If the taxpayer transfers any available credit from the 301-SBI, that amount is entered on Form 301. For TY 2021, the transfer amount is reported on Form 301, line 60. For more information, see Forms 301-SBI and 301 and their related instructions. Note: Tax credits claimed for qualifying contributions to qualified charitable organizations (Credit Forms 321, 322, 323, 348 and 352) cannot be claimed on Form 301-SBI and must be claimed on the taxpayer’s regular tax return. Credit for Income Taxes Paid to Other States (Arizona Credit Form 309-SBI) SB 1783 (A.R.S. § 43-1701) also establishes a Credit for Income Taxes Paid to Other States, allowed against Arizona smallbusiness income tax liability, for net income taxes imposed by and paid to another state or country on the same Arizona small business taxable income taxed by both Arizona and the other state or country. For more information, see Form 309-SBI. Small Business Income Estimated Tax Payments For tax year 2021, a taxpayer is (was) not required to remit SBI estimated tax payments. The department will not assess a penalty for underpayment of estimated taxes on any amount not remitted. Note: The taxpayer is still subject to the late payment penalty (including applicable interest) for the amount of taxes not paid by the original due date of the return. The department will not assess a late filing penalty on the SBI tax return. If the taxpayer fails to timely file the SBI tax return (either by the normal due date or extended due date), the election will be denied and the adjustment (decrease to federal adjusted gross income) made on the regular tax return for small business income will be disallowed. In this case, all income is reported on the regular income tax form. Beginning with tax year 2022, a taxpayer is required to pay estimated tax in four equal installments (25% of the required annual estimated tax payment) if the taxpayer’s liability is at least $1,000. Use Form 140ESSBI, Individual Estimated Income Tax Payment (Small Business Income Tax Return), to remit the required amount of quarterly estimated taxes. Page 2 of Form 140ES-SBI includes a worksheet to determine the required amount of each quarterly tax payments. For TY 2022, the tax is equal to 3.0% of small business taxable income reported on the SBI tax return. The amount of the required payment is the lesser of: a) 90% of the tax shown on the return for the TY or, if no return is filed, 90 percent of the tax for that year; b) 100% of the tax shown on the small business income tax return for the preceding TY — unless the preceding TY was not 12 months; or the small business did not file a return for thepreceding TY that indicated a liability. If the taxpayer fails to remit the required estimated tax payment (Form 204-SBI), the department may assess an underpayment of estimated taxes penalty on any amount not timely remitted. 2 8 ARIZONA SMALL BUSINESS INCOME TAX Composite income tax return in Another State A small business taxpayer who participates in a composite income tax return in anotherstate may claim a credit for taxes paid to the other state if the taxes paid to the other state are imposed on — and paid directly — by the small business taxpayer and not the entity and if the: a) Small business taxpayer makes direct payment to the other state; b) Small business taxpayer makes direct payment to the entity filing the composite incometax return; c) Entity charges the small business taxpayer's loan account for the amount of the tax; and d) Entity reduces the small business taxpayer's capital account. If the taxpayer claims the credit for taxes paid to a foreign country, to use the conversion rate in effect on the date the taxpayer paid the taxes to the foreign country. If any taxes paid to another state or country are credited or refunded andthe taxpayer has been allowed a credit, to immediately report that fact to DOR. If any taxes paid to another state or country are credited or refunded, a tax equal to the credit allowed for the taxes credited or refunded by the other state or country to be paid by the taxpayer on notice and demand from DOR __________________________________________ _________________________________________ For the purpose of the Small Business Income tax return: 1. "Arizona small business" means an activity that generates Arizona small business gross income. 2. "Arizona small business adjusted gross income" of a resident taxpayer means the Arizona small business gross income subject to the adjustments provided in article 3 of this chapter. A.R.S. § 43-1721 (additions and subtractions to Arizona small business gross income). NOTE: In computing Arizona small business adjusted gross income, the additions and subtractions provided in sections 43-1021 and 43-1022 shall be made but only to the extent the additions and subtractions directly relate to Arizona small business gross income. The subtraction for SBI provided in section 43-1022, paragraph 28 may not be included as a subtraction under this chapter. Deductions other than those deductions already reflected in the net amounts reported on the federal schedules prescribed in section 43-1701 may not be taken against Arizona small business adjusted gross income in computing Arizona small business taxable income. 3. "Arizona small business gross income" of a resident taxpayer: (a) Means the sum of the amounts, whether positive or negative, that are included in a taxpayer's federal adjusted gross income for the taxable year, computed pursuant to the internal revenue code, and that are reported on the following schedules and forms or on equivalent successor schedules and forms designated by the internal revenue service: (i) Schedule B, interest and ordinary dividends. (ii) Schedule C, profit or loss from business. (iii) Schedule E, supplemental income or loss. (iv) Schedule F, profit or loss from farming. (v) Form 4797, sale of business property. (vi) Form 4835, farm rental income and expenses. (b) Includes any amount reported on schedule D, capital gains and losses, that is recognized with respect to either the taxable disposition of an ownership interest in any entity other than a publicly traded entity, or the taxable disposition of capital assets used in connection with a trade or business activity, including goodwill and going concern value. 4. "Arizona small business taxable income" of a resident taxpayer means the Arizona small business adjusted gross income minus any deductions allowable in article 4 of this chapter. 3 9 THIS PAGE INTENTIONALLY LEFT BLANK 10 2021 Part-Year Resident 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 Arizona Form 140PY Do You Have to File? Arizona Filing Requirements These rules apply to all Arizona taxpayers. 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. You must file if you are: • Income Tax Procedures and Rulings Single $12,550 • Married filing joint $25,100 • Married filing separate $12,550 • Head of Household $18,800 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 Type and Category from the drop down menus. Publications To view or print the department’s publications, go to our website and click on Reports, Statistics and Legal Research from the main menu then click on Publications in the left hand 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 option. E-file today, pay by April 18, 2022, 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. AVOID PROCESSING DELAYS: Are you mailing your Arizona income tax return? If you are mailing your return to the department, see page 29 for assembly order (form sequence) information. Are You Subject to Tax in Arizona? As a part-year resident, you are subject to tax on all of the following: 1. Any income you earned in 2021 while an Arizona resident. This includes any interest or dividends received from sources outside Arizona. 2. Any income you earned from an Arizona source in 2021 before moving to (or after leaving) the state. and your gross income is at least: If you are a part-year resident, you must report all income for the part of the year you were an Arizona resident, plus any income from Arizona sources for the part of the year you were an Arizona nonresident. 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 RRB1099 and RRB-1099-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. If you are not required to file an Arizona income tax return, but qualify to claim the credit for Arizona’s increased excise taxes, do not file this form. You may complete and file Arizona Form 140ET to claim the credit. 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. 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: • 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. For Arizona’s tax treatment of American Indians, see department’s ruling, ITR 96-4, Income Taxation of Indians and Spouses. NOTE: If you also have Arizona source income and deductions for the portion of the year you were an Arizona nonresident, file Arizona Form 140PY for the entire taxable year. 11 Arizona Form 140PY Do You Have to File if You Are the Spouse of an American Indian and You Are Not an Enrolled Indian? Residents 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. If you are a full year resident, you must file Arizona Form 140, 140A, or 140EZ. 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. Do You Have to File if You Are in the Military? You must file if you meet the Arizona filing requirements unless all the following apply to you: • Part-Year Residents You are an active duty member of the United States armed forces. 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 2021: • 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. 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 you are a nonresident (including nonresident aliens), you must file Arizona Form 140NR, Nonresident Personal Income Tax Return. 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. What if a Taxpayer Died? If a taxpayer died before filing a return for 2021, 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. As an Arizona part-year resident, you must report all of your income for the portion of the year you were an Arizona resident, no matter where you are stationed. You must include your military pay, but using Form 140PY, you may subtract all pay received for active duty military service to the extent it is included in your Arizona gross income. If the deceased taxpayer did not have to file a return but had tax withheld, a return must be filed to get a refund. 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 stationed in Arizona, the following applies to you: • • You are not subject to Arizona income tax on your military pay. You must report any other income you earn in Arizona. Use Form 140NR, Nonresident Personal Income Tax Return, to report this income. If your spouse died in 2021 and you did not remarry in 2021 or if your spouse died in 2022 before filing a return for 2021, you may file a joint return. If your spouse died in 2021, the joint return should show your spouse's 2021 income before death and your income for all of 2021. If your spouse died in 2022, before filing the 2021 return, the joint return should show all of your income and all of your spouse's income for 2021. 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. 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. In this case, the child should not file an Arizona return. The parent must include that same income in his or her Arizona taxable income. Are Any Other Returns Required? 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. Determining Residency Status 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 on determining residency status, see the department’s procedure, ITP 92-1, Procedure For Determining Residency Status. 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. Place the completed Form 131 on the front of the return. 2 12 Arizona Form 140PY What Are the Filing Dates and Penalties? “timely mailing as timely filed” rule. For more information, see “Mailing Your Return” at the end of these instructions. 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. Late Filing Penalty 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. When Should You File? Your 2021 calendar year tax return is due no later than midnight, April 15, 2022. File your return as soon as you can after January 1, 2022, but no later than April 15, 2022. Because April 15, 2022 falls on a federal holiday, you have until Monday, April 18, 2022 to timely file your 2021 tax return. 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. 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 if You Cannot File on Time? Extension Underpayment Penalty 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 2021 calendar year tax return, your due date is October 15, 2022. Because October 15, 2022 falls on a Saturday, you have until Monday, October 17, 2022 to timely file your 2021 tax return. 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). NOTE: An extension does not extend the time to pay your income tax. See the instructions for Arizona Form 204. 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 15, 2022. 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. 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. 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. 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 140PY. 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. When Should You File if You Are a Nonresident Alien? As a Nonresident Alien, do not file Form or Form 140PY. Use Form 140NR, Nonresident Personal Income Tax Return, to report your Arizona sourced income. File Form 140NR-SBI if you elect to report your Arizona sourced small business income on the Small Business Income Tax Return. See the instructions for Form 140NR for your filing due dates.. If you amend your federal return for any year, you must also file an Arizona Form 140X for that year. 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. 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 2021 calendar year return by April 15, 2022, your return will not be late. You may also use certain private delivery services designated by the Internal Revenue Service (IRS) to meet the Option 1 You may file a Form 140X for that year. If you choose this option, you must amend and mail your Arizona return within 90 3 13 Arizona Form 140PY days of the final determination of the IRS. Include a complete copy of the federal notice with your Form 140X. Line-by-Line Instructions Tips for Preparing Your Return Option 2 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: • You must complete your federal return before you can start your Arizona return. • 1. Request that the department recompute your tax. • • 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 page 31 for assembly order. Make sure you include your daytime telephone number. If filing a fiscal year return, fill in the period covered. 2. 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 • • • Entering Your Name, Address, and SSN Do You Need to Make Arizona Estimated Payments in 2022? DO YOU HAVE A COMPLICATED RETURN? You must make Arizona estimated income tax payments during 2022 if: AND AND Your filing status your Arizona gross your Arizona gross is: income for 2021 income for 2022 is was greater than: greater than: Single $ 75,000 $ 75,000 Married filing joint $150,000 $150,000 Married filing $ 75,000 $ 75,000 separate Head of Household $ 75,000 $ 75,000 E-file makes E-file software offers: filing a complex • easy step-by-step instructions return simple! • For a list of approved software visit www.azdor.gov 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, make sure that you enter your SSNs in the same order every year. If you met the income threshold for 2021, you must make estimated payments during 2022, unless you are sure you will not meet the threshold for 2022. As a part-year resident, your Arizona gross income is that part of your federal adjusted gross income that you must report to Arizona. Your Arizona gross income is on line 26 of the 2021 Form 140PY. 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. 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 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. What if You Make Your Estimated Payments Late? 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. 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? Use your current home address. The department will send your refund or correspond with you at that address. 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. For a deceased taxpayer, see page 2 of these instructions. 4 14 • • error detection before filing Easy form selection Maximum deductions Arizona Form 140PY Foreign Addresses Box 4a - Injured Spouse Protection of Joint Overpayment 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. 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. Last Name(s) 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. Identification Numbers for Paid Preparers NOTE: You cannot use Form 203 to request protection from offset for past-due federal taxes. You must contact the IRS. 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. 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. A paid preparer who fails to include the proper identification number may also 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: 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 140PY. • 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. 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 married and filing a separate return, check box 6. Enter your spouse's name and SSN on the second line 1. 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). If you were married as of December 31, 2021, 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. Box 4 - Married Filing Joint Return 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, 2021. 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. 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. You may file a joint return if your spouse died during 2021 and you did not remarry in 2021. See page 2 of these instructions for details. 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. If you are a part-year resident married to an Arizona full year resident, you may file a joint return with your full year resident spouse. If filing a joint return with your full year resident spouse, you must use Form 140PY. 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. NOTE: For more information 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 Part-Year Resident or Nonresident. 5 15 Arizona Form 140PY Box 7 - Single Return 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 filing as single, check box 7. Use this filing status if you were single on December 31, 2021. 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, 2021, and you did not remarry in 2021, and you do not qualify to file as a qualifying widow or widower with dependent children on your federal return. • Enter "2" in box 9 if both you and your spouse are totally or partially blind. • 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. 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. Enter the number of exemptions you are claiming in boxes 8, 9, and 11a. Do not put a check mark. You may lose the exemption if you put a checkmark in these boxes. Box 11a - Qualifying Parents and Grandparents Box 8 - Age 65 or Over NOTE: If a person who is a qualifying parent or grandparent also qualifies as your dependent, you may include that person as a dependent in box 10b, or you may claim that person as a qualifying parent or grandparent in box 11a. You may not include the same person in both box 10b and box 11a. NOTE: If a taxpayer’s 65th birthday was January 1, 2022 (born 1/1/1957), that person is considered to be age 65 at the end of 2021 for federal income tax purposes and likewise for Arizona income tax purposes. If you are single or filing as head of household, enter "1" in box 8 if you were 65 or older in 2021 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 2021 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 2021 and neither of you are claimed as a dependent by another taxpayer. • You must complete the qualifying parent and grandparent section (lines 11b and 11c) on page 1 (and Part 2 on page 4, if more space is needed) before you can total your exemptions for qualifying parents and grandparents. Be sure to check the box on page 1 indicating you are completing page 4. 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 (1-4): 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. 1. 2. Box 9 - Blind If you or your spouse were partially blind as of December 31, 2021, 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. If your eye condition is not likely to improve beyond the conditions listed above, you can get a statement certified by • 3. 6 16 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 is (1) totally or partially blind, (2) has no Arizona adjusted gross income for calendar year, and (3) is not a 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. Exemptions - Boxes 8, 9, and 11a • If you are married filing a joint return, enter "1" in box 9 if you or your spouse is totally or partially blind. The parent, grandparent, or great-grandparent was 65 years old or older during 2021. The parent, grandparent, or great-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. You paid more than one-half of the support and maintenance costs of the parent or grandparent during the taxable year. Arizona Form 140PY 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 procedure, ITP 14-1, Procedure for Determining Support for Purposes of the Parents and Grandparents Exemption Allowed under A.R.S. § 43-1023(C) and complete the worksheet. Keep the worksheet for your records. 4. NOTE: If a person who is a qualifying parent or grandparent also qualifies as your dependent, you may include that person as a dependent in box 10b, or you may claim that person as a qualifying parent or grandparent in box 11a. You may not include the same person in both box 10b and box 11a. Lines 10c and 10d You must complete the dependent information section (lines 10c and 10d) 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. 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 which 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. You may claim only those individuals who qualify as your dependent for federal purposes. For each qualifying individual, enter the following information: a) b) c) d) 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 ruling, ITR 14-3, "Activities of Daily Living" for the Purpose of the Exemption Allowed Under A.R.S. § 43-1023(C). 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 procedure, ITP 14-2, Procedure for Determining Whether a Parent or Grandparent Requires Assistance with Activities of Daily Living for Purposes of the Exemption Allowed under A.R.S. § 43-1023(C) and complete the checklist. Keep the checklist for your records. e) Lines 11b and 11c f) For each qualifying parent and grandparent, enter the following information: a) b) c) d) e) f) first and last name; SSN; relationship to taxpayer; 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. - 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 check the box if you did not claim this person on your federal return due to educational credits. 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? first and last name; SSN; relationship to taxpayer; the number of months this person lived in your home; check this box if the person is age 65 or over; check this box if the person died in 2021. You may lose the exemption for qualifying parents or grandparents if you do not furnish this information. Enter the total number of qualifying parents/grandparents in box 11a. 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. Dependents – Boxes 10a and 10b Reporting Your Residency Status Boxes 10a and 10b Check the appropriate box. 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 dependents in box 10a or 10b that you are using to compute the allowable Dependent Tax Credit on line 59. Box 12 - Part-Year Resident Other than Active Military Check box 12 if you were an Arizona resident for part of 2021 and were not an active duty military member. Box 13 - Part-Year Resident Active Military Check box 13 if you were an active duty military member who either began or gave up Arizona residency during 2021. 7 17 Arizona Form 140PY Line 14 - Dates of Arizona Residency The following instructions apply to the ARIZONA column. If you became an Arizona resident during 2021, enter the date that you became an Arizona resident. If you gave up your Arizona residency during 2021, do both of the following: 1. 2. Line 15 - Wages, Salaries, Tips, etc. Enter all amounts received while an Arizona resident. Also enter all amounts received from Arizona employment during the part of the year you were an Arizona nonresident. Enter the date you became an Arizona resident. Enter the date you gave up your Arizona residency. For the period while a nonresident, 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 the name of the other state(s) of residency in the space provided or the name of the foreign country, if applicable. Determining Arizona Income Use lines 15 through 26 to determine what portion of your total income is taxable by Arizona. 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, Disaster Recovery Tax Relief. You must complete your federal return before completing your Arizona return. You must complete a 2021 federal return to determine your federal adjusted gross income, even if not filing a federal return. Arizona uses federal adjusted gross income as a starting point to determine Arizona taxable income. NOTE: Do not include active duty military pay for the part of the year you were a nonresident. NOTE: If you are unable to determine the proper line to use, please contact one of the numbers listed on page 1. Line 16 - Interest Enter all amounts received while an Arizona resident. FEDERAL Column You must also enter any interest income derived from Arizona sources during the part of the year you were an Arizona nonresident. Interest income from Arizona sources is interest income that has acquired an Arizona business situs. Enter the actual amounts shown on your 2021 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 2021 federal Form 1040 or Form 1040NR. 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. ARIZONA Column Enter that portion of your federal income received while you were an Arizona resident in the ARIZONA column. For example, if you became an Arizona resident on June 30, enter all income you received from that day to December 31, 2021. Be sure you add the amount you received while an Arizona resident from non-Arizona municipal bonds to your income on line 30, Other Additions to Income. NOTE: If you also have Arizona source income for the portion of the taxable year you were an Arizona nonresident, also include that source income on the appropriate line in the ARIZONA column. Line 17 - Dividends 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. Enter all amounts received while an Arizona resident. You must also enter any dividends derived from Arizona sources during the part of the year you were an Arizona nonresident. Dividend income from Arizona sources is dividend income th
Extracted from PDF file 2021-arizona-form-140py.pdf, last modified October 2021

More about the Arizona Form 140PY Individual Income Tax Nonresident TY 2021

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

We last updated the Part-Year Resident Personal Income Tax Package in January 2022, so this is the latest version of Form 140PY, fully updated for tax year 2021. You can download or print current or past-year PDFs of Form 140PY directly from TaxFormFinder. You can print other Arizona tax forms here.

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 140PY.

Form Code Form Name
Form 140PY-A Schedule A (PY) - Itemized Deductions Part-Year Residents
Form 140PY-SBI Small Business Income Tax Return (Part Year, 140PY-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 140PY from the Department of Revenue in January 2022.

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Form 140PY 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 140PY

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


2021 Form 140PY

Arizona Form 140PY

2020 Form 140PY

Arizona Form 140PY

2019 Form 140PY

Arizona Form 140PY

2017 Form 140PY

Arizona Form 140PY

2016 Form 140PY

Arizona Form 140PY

Part-Year Resident Personal Income Tax Return 2014 Form 140PY

Arizona Form 140PY

Part-Year Resident Personal Income Tax Return 2012 Form 140PY

Arizona Form 140PY

Part-Year Resident Personal Income Tax Return 2011 Form 140PY

Arizona Form 140PY


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