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Arizona Free Printable Arizona Form 140PY for 2021 Arizona Part-Year Resident Personal Income Tax Package

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

2 20 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 2020. • 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 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, 2020. If you use the amounts from your 2020 federal tax return to complete your Arizona return and the Legislature does not adopt the 2020 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 2020 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 2020, except for changes Congress made to the federal tax code during 2020 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, the 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 2021. 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 made after January 1, 2020. What does this mean to you? It means that if any of the federal law changes made in 2020 apply to your 2020 return, you can opt to file your 2020 return using one of the following methods: 1. You can wait and file your 2020 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 2020 return assuming that the federal law changes will be adopted. The 2020 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 the changes, you may need to amend your 2020 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 2020 return and you file and pay the required amended return by the extended due date of your 2021 return. 3. You can file your 2020 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, 2020. 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 the changes, you do not have to do anything more. • If Arizona adopts the changes, you may need to amend your 2020 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. THIS PAGE INTENTIONALLY LEFT BLANK Individual Income Tax - Highlights 2020 Due date for calendar year filers Credit for Contributions to Private School Tuition Organizations (Form 323) Your 2020 individual income tax return is due by midnight on April 15, 2021. If you file under a valid extension, your extended due date to file your income tax return is October 15, 2021. 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: • $593 for single and head of household taxpayers • $1,186 for married taxpayers filing a joint return Itemized Deductions Recent legislation amended Arizona Revised Statutes § 43-1042, relating to the allowable deduction for state income taxes paid. Credit for Contributions Made to Certified School Tuition Organizations (Form 348) Taxpayers itemizing deductions on their Arizona income tax return and claimed charitable contributions as a state tax payment on their federal 1040 Schedule A are required to make an adjustment for the amount of charitable contributions taken as a state tax payment claimed on the taxpayer’s federal itemized deductions (Form 1040 Schedule A). 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: • $590 for single and head of household taxpayers • $1,179 for married taxpayers filing a joint return 2020 Arizona Standard Deduction Amounts Adjusted The 2020 Arizona standard deduction amounts are: • $12,400 for a single taxpayer or a married taxpayer filing a separate return; • $24,800 for a married couple filing a joint return; and • $18,650 for individuals filing a head of household return. Standard Deduction Increase for Charitable Contributions (New Adjustment) Taxpayers who did not itemize deductions on their federal return and who elect to take the standard deduction on the Arizona tax return and claim the allowable standard deduction increase must reduce the total amount of the 2020 qualifying charitable contributions by the amount for which the taxpayers took the allowable deduction on their federal return. 2020 Individual Income Adjusted for Inflation Tax Brackets For 2020, the Arizona individual income tax brackets on Tax Table X & Y were adjusted for inflation. The 2020 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. 1 THIS PAGE INTENTIONALLY LEFT BLANK 2020 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 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 and click on Reports and Legal Research 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 and Legal Research then click on Publications. 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 15, 2021, 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 2020 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 2020 before moving to (or after leaving) the state. 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. Arizona Form 140PY 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 at least: • Single $12,400 • Married filing joint $24,800 • Married filing separate $12,400 • Head of household $18,650 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 Arizona law does not tax. Income 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, or • pay received for active service as a member of the Reserves, National Guard, or the U.S. Armed Forces. 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 income tax 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? 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. Arizona Form 140PY Do You Have to File if You Are in the Military? subject to 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 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 2020: • 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. 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 were an Arizona resident when you entered the service, you remain an Arizona resident, no matter where stationed, until you establish a new domicile. 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 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 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. To find out more, see the department’s publication, Pub. 704, Taxpayers in the Military. • Nonresidents If you are a nonresident, 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 2020, 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. 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 your spouse died in 2020 and you did not remarry in 2020 or if your spouse died in 2021 before filing a return for 2020, you may file a joint return. If your spouse died in 2020, the joint return should show your spouse's 2020 income before death and your income for all of 2020. If your spouse died in 2021, before filing the 2020 return, the joint return should show all of your income and all of your spouse's income for 2020. 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. If You Included Your Child's Unearned Income on Your Federal Return, Does Your Child Have to File an Arizona Return? Are Any Other Returns Required? 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. 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 Claiming a Refund for a Deceased Taxpayer 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. 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. Residents What Are the Filing Dates and Penalties? 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 When Should You File? Your 2020 calendar year tax return is due no later than midnight, April 15, 2021. File your return as soon as you can after January 1, 2021, but no later than April 15, 2021. 2 Arizona Form 140PY Late Filing Penalty If you are a fiscal year filer, your return is due on the 15th day of the fourth month following the close of your fiscal year. If you file late, we will charge you a late filing penalty. This penalty is 4½% (.045) of the tax required to be shown on the return for each month or fraction of a month the return is late. This penalty cannot exceed 25% (.25) of the tax found to be remaining due. What if You Cannot File on Time? You may request an extension if you know you will not be able to file on time. NOTE: An extension does not extend the time to pay your income tax. See the instructions for Arizona Form 204. 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. 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, 2021. 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. 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 each 30 day period or fraction of a 30 day period. We charge this penalty from the original due date of the return until the date you pay the tax. This penalty cannot exceed 25% (.25) of the unpaid tax. If we charge you the extension underpayment penalty, we will not charge you the late payment penalty under Arizona Revised Statutes (A.R.S.) § 42-1125(D). When Should You File if You Are a Nonresident Alien? The due date for your Arizona return is not the same as the due date for your federal return. Your Arizona return is due by April 15, 2021, even though your federal return is due on June 15, 2021. If you want to file your Arizona return after April 15, 2021, you must ask for a filing extension. You must file this request by April 15, 2021. Arizona will allow up to a 6-month extension. This will allow you to file your return by October 15, 2021. See Form 204 for extension filing details. If you have a federal 6-month extension, you can file your Arizona return under that extension. If you file using your federal extension, Arizona will also allow you an extra 6 months. Because we will allow only 6 months, the due date for your Arizona return is not the same as the due date for your federal return. In this case, your Arizona return will be due by October 15, 2021, even though your federal return will not be due until December 15, 2021. If you file your 2020 Arizona calendar year return after October 15, 2021, your return will be late. 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. NOTE: If you are subject to two or more of the above penalties, the total cannot exceed 25%. Interest We charge interest on any tax not paid by the due date. We will charge you interest even if you have an extension. If you have an extension, we will charge you interest from the original due date until the date you pay the tax. The Arizona interest rate is the same as the federal rate. When Should You Amend a Return? If you need to make changes to your return after you have filed, 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. 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 2020 calendar year return by April 15, 2021, 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. 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 days of the final determination of the IRS. Include a complete copy of the federal notice with your Form 140X. 3 Arizona Form 140PY Line-by-Line Instructions 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: 1. Request that the department recompute your tax. 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 • • Do You Need to Make Arizona Estimated Payments in 2021? Entering Your Name, Address, and SSN Tips for Preparing Your Return • 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 page 28 for assembly order. Make sure you include your daytime telephone number. If filing a fiscal year return, fill in the period covered. • • • You must make Arizona estimated income tax payments during 2021 if: AND AND Your filing your Arizona gross your Arizona gross status is: income for 2020 was income for 2021 is greater than: greater than: Married Filing Joint $150,000 $150,000 Single $ 75,000 $ 75,000 Head of Household $ 75,000 $ 75,000 Married Filing Separate $ 75,000 $ 75,000 DO YOU HAVE A COMPLICATED RETURN? 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 • • error detection before filing Easy form selection Maximum deductions 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 2020, you must make estimated payments during 2021, unless you are sure you will not meet the threshold for 2021. 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 2020 Form 140PY. 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. 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 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 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. Make sure that you enter your SSN on your return. Make sure that all SSNs are clear and correct. You may be subject to a penalty if you fail to include your SSN. It will take longer to process your return if SSNs are missing, incorrect, or unclear. Use your current home address. The department will send your refund or correspond with you at that address. For a deceased taxpayer, see page 2 of these instructions. What if You Make Your Estimated Payments Late? 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? 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. 4 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. 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 for 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. 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. Identification Numbers for Paid Preparers If you pay someone else to prepare your return, that person must also include an identification number where requested. A paid preparer may use any of the following: • his or her PTIN; • his or her SSN; or • the EIN for the business. A paid preparer who fails to include the proper identification number may also be subject to a penalty. Box 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: • 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. 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. 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 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 were married as of December 31, 2020, 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 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, 2020. It does not matter whether or not you were living with your spouse. You may file a joint return, even if you and your spouse filed separate federal returns. You may file a joint return if your spouse died during 2020 and you did not remarry in 2020. See page 2 of these instructions for details. 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. Box 7 - Single Return 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. If you are filing as single, check box 7. Use this filing status if you were single on December 31, 2020. You are single if any of the following apply to you: • You have never been married. 5 Arizona Form 140PY • • You are legally separated under a decree of divorce or of separate maintenance. You were widowed before January 1, 2020, and you did not remarry in 2020, 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. Exemptions - Boxes 8, 9, and 11a 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 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. Box 8 - Age 65 or Over NOTE: If a taxpayer’s 65th birthday was January 1, 2021 (born 1/1/1956), that person is considered to be age 65 at the end of 2020 for federal income tax purposes and likewise for Arizona income tax purposes. • • • Enter "2" in box 9 if both you and your spouse are totally or partially blind. 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 (1) your spouse is 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. 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. 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): 1. The parent, grandparent, or great-grandparent was 65 years old or older during 2020. 2. 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. 3. You paid more than one-half of the support and maintenance costs of the parent or grandparent during the taxable year. To help you determine if you paid more than one-half of your parent or grandparent’s support during the taxable year, it is recommended that you review the department’s 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. If you are single or filing as head of household, enter "1" in box 8 if you were 65 or older in 2020 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 2020 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 2020 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. Box 9 - Blind If you or your spouse were partially blind as of December 31, 2020, you must get a statement certified by your eye doctor or registered optometrist that: • You cannot see better than 20/200 in your better eye with glasses or contact lenses. • Your field of vision is 20 degrees or less. If your eye condition is not likely to improve beyond the conditions listed above, you can get a statement certified by your eye doctor or registered optometrist to that effect instead. You must keep the statement for your records. • 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. 6 Arizona Form 140PY Boxes 10a and 10b 4. The parent or grandparent required assistance with activities of daily living. The term “activities of daily living” means two or more of the listed categories. Activities of daily living include both basic activities of daily living and instrumental activities of daily living. The categories of activities of daily living are dressing, eating, ambulating, toileting, medicating and hygiene, shopping, housekeeping, managing personal finances, basic communication, food-preparation, and transportation. For more information regarding what the term “activities of daily living” means when determining an Arizona resident taxpayer’s eligibility for this exemption, see the department’s 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. 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. 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. 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. Lines 11b and 11c For each qualifying parent and grandparent, 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; e) check this box if the person is age 65 or over; f) check this box if the person died in 2020. 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. Dependents – Box 10a and Box 10b Repeal of Arizona’s dependent deduction for taxable years beginning from and after December 31, 2018. Arizona’s 2019 legislation amended A.R.S. § 43-1023 repealing the deduction for a taxpayer’s dependent for taxable years beginning from and after December 31, 2018. Enactment of Arizona’s Dependent Tax Credit for taxable years beginning from and after December 31, 2018. (This legislation also enacted A.R.S. § 1073.01 establishing a Dependent Tax Credit for taxpayers claiming the following individuals: • dependents under the age of 17; and • dependents age 17 and older. 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? 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 Dependent Tax Credit is claimed on page 2, line 59. Check the appropriate box. 7 Arizona Form 140PY Box 12 - Part-Year Resident Other than Active Military passive losses that arose from Arizona sources. Your 2020 Arizona gross income can include only losses you used on your 2020 federal return. The following instructions apply to the ARIZONA column. 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. 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. 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. Check box 12 if you were an Arizona resident for part of 2020 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 2020. Line 14 - Dates of Arizona Residency If you became an Arizona resident during 2020, enter the date that you became an Arizona resident. If you gave up your Arizona residency during 2020, do both of the following: 1. Enter the date you became an Arizona resident. 2. Enter the date you gave up your Arizona residency. 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. You must complete your federal return before completing your Arizona return. You must complete a 2020 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. Line 16 - Interest Enter all amounts received while an Arizona resident. 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. 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. 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. Line 17 - Dividends 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 that has acquired an Arizona business situs. Line 18 - Arizona Income Tax Refunds Enter the amount of Arizona income tax refunds received in 2020 that you included in your federal adjusted gross income. Line 19 - Business Income or (Loss) Enter any business or farm income or (loss) incurred while you were an Arizona resident. Also enter income or (loss) derived from Arizona businesses during the part of the year you were an Arizona nonresident. NOTE: If you are unable to determine the proper line to use, please contact one of the numbers listed on page 1. FEDERAL Column Enter the actual amounts shown on your 2020 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 2020 federal Form 1040 or Form 1040NR. 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, 2020. 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. 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. As a part-year resident, your Arizona gross income may include some of these losses. For the part of the year you were an Arizona resident, you may consider any passive losses that arose while an Arizona resident. For the part of the year you were an Arizona nonresident, you may consider only those 8 Arizona Form 140PY Line 21 - Rents, etc. Enter income received from rents, royalties, partnerships, estates, trusts, small business corporations, etc., while an Arizona resident. Also enter rents or royalties earned on Arizona properties during the part of the year you were an Arizona nonresident. Enter any income or (loss) derived from Arizona sources from partnerships, small business corporations, etc., during the part of the year you were an Arizona nonresident. Line 22 - Other Income Reported on Your Federal Return Enter other income shown on your federal return that you received while an Arizona resident. Other income may include alimony that is included in your computation of your federal taxable income, pensions, social security, unemployment, and lottery and gambling winnings. Include a schedule listing these other items. Also enter any other income derived from Arizona sources during the part of the year you were an Arizona nonresident. For the period while a nonresident, 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. 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) Only enter those gains or (losses) 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. In the Arizona column, enter the amount of net gain or (loss) on line 20 only from the following: • Any gain or (loss) on property sold while an Arizona resident if you included the amount as income on your 2020 federal return. • Any gain or (loss) on sales of Arizona property (Arizona sources) during the part of the year you were an Arizona nonresident. Net Operating Losses Arizona does not have specific provisions for calculating the net operating loss of an individual. Generally, the amount of net operating loss deduction included in your federal adjusted gross income is the amount allowable for Arizona purposes. However, there are instances when the amount allowable for Arizona purposes may be different. As a part-year resident, Arizona recognizes that portion of the federal net operating loss which is attributable to income taxed by Arizona as the Arizona net operating loss. As a part-year resident, include in Arizona gross income the amount of federal net operating loss carry forward or carryback attributable to Arizona unless any of the following apply: • The net operating loss attributable to Arizona included in your federal adjusted gross income has already been deducted for Arizona purposes. • The net operating loss included in your federal adjusted gross income was incurred from non-Arizona sources while a nonresident. Enter the amount of net operating loss deduction included in your federal adjusted gross income that was attributable to income taxed by Arizona. Do not include any amount of the loss that has already been deducted for Arizona purposes. For information on deducting a net operating loss carryback in cases where you did not make an election under Internal Revenue Code (IRC) § 172(b)(1)(H), see the department’s procedure, ITP 13-1, Procedure for Individuals Deducting a Net Operating Loss Carryback. If you made an election under IRC § 172(b)(1)(H), see the instructions for line 44, “Other Subtractions From Income.” Line 23 - Total Income Add lines 15 through 22 and enter the total. NOTE: If you reported the maximum allowable net capital (loss) for the current taxable year on your federal return, enter the total amount of net capital loss from all property sold while a resident and net capital loss from all property sourced to Arizona during the part of the year you were an Arizona nonresident used to compute the allowable net capital loss claimed on your federal return. For example: A single taxpayer has a $3,000 capital gain from property sold in State XYZ of which $1,000 was earned while an Arizona resident and $2,000 was earned during the period while a nonresident. Taxpayer also had a ($7,000) capital (loss) from Arizona property sold during the period while a resident in Arizona resulting in a ($4,000) net federal capital loss. [$3,000 gain – ($7,000 loss) = ($4,000 net loss)] Because 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)] • For the current tax year: the part-year resident taxpayer would enter the loss actually used ($5,000), for Arizona purposes, on line 20 of the Arizona column. [($7000 loss less $1,000 loss carryforward + $1,000 gain earned while a resident) = $5,000 loss)]. • Assuming taxpayer has no other gains or (losses) from nonArizona sources, the taxpayer would enter the remaining Arizona sourced capital loss ($1,000) on line 20, of the Arizona column in the year the carryforward amount is used for federal purposes 9 Arizona Form 140PY Line 24 - Other Federal Adjustments If any of the following are included in adjustments shown on your federal return, make an entry on this line as explained: • IRA: Enter the amount actually paid while an Arizona resident for your IRA and/or your spouse’s IRA. • Student loan interest: Enter the amount you paid while an Arizona resident. • Self-employed SEP, SIMPLE and qualified plans: Enter the amount actually paid while an Arizona resident. • Self-employment tax: Enter that portion of the selfemployment tax that relates to self-employment income reportable to Arizona. • Self-employed health insurance: Enter that amount of selfemployed health insurance that was actually paid while an Arizona resident. • Penalty on early withdrawal of savings: Multiply the federal deduction by the ratio of your Arizona interest to your federal interest. • Alimony: Enter the amount actually paid while an Arizona resident and included in your computation of federal taxable income. • Moving expenses: Enter the amount of moving expenses included in your federal adjusted gross income that you accrued and paid during the part of the year you were an Arizona resident. Examples Arizona Gross Income from line 26 Federal Adjusted Gross Income from line 25 $ 17,516 $ 32,000 Arizona income ratio 17,516/32,000 = .547375 enter on line 28: . $ 25,650 $ 92,100 $ 9,000 • NOTE: Do not enter any amounts for items 1 through 8 above unless you deducted these items in computing your federal adjusted gross income. • If your federal return shows other adjustments to income, include your own schedule to show your calculation. 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. Arizona gross income is made up of the portion of the federal adjusted gross income earned by the taxpayer during the period of residency (regardless of source as long as taxable by Arizona) plus the Arizona source income earned during the portion of the year that the taxpayer was a non-resident. Line 27 - Arizona Income Ratio Divide line 26 by line 25, and enter the result on line 27. You must round your answer to three decimal places. This is your Arizona income ratio of your total income. Do not enter more than 1.000. Do not include the percent sign (%) with the amount entered on line 27. • • • 7 2 7 9 10,000/9,000 = 1.11111 enter on line 28: 1 • 4 25,650/92,100 = .278501 enter on line 28: . $ 10,000 5 . 0 0 0 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 percentage cannot be more than 1.000. Additions to Income Line 28 - Total Depreciation Included in Arizona Gross Income 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 the amount that is attributable to income taxable by Arizona. See the instructions for line 40. Line 29 - Net Capital (Loss) from the Exchange of one kind of Legal Tender for another kind of Legal Tender To determine if you are required to make this addition to income, you must net all gains and (losses) from all exchanges of kind of legal tender for another kind of legal tender including amounts shown on Form 165 Schedule K-1, Form 120S Schedule K-1, and Form 141AZ, Schedule K-1. 10 Arizona Form 140PY Enter the amount of any net capital loss from Arizona sources and included in Arizona gross income for the taxable year that is derived from the exchange of one kind of legal tender for another kind of legal tender. portion of line 3 that is allocable to estate or trust income taxable by Arizona as an addition on line 30. NOTE If the amount on line 3 of your Form 141AZ Schedule K-1 or K-1(NR), is a negative number, enter that portion of line 3 that is allocable to estate or trust income taxable by Arizona as a subtraction on line 44. NOTE: If the amount from all sources results in a net capital gain from the exchange of one kind of tender for another kind of tender, enter that amount on line 38. For the purposes of this paragraph: (a) "Legal tender" means a medium of exchange, including specie that is authorized by the United States Constitution or Congress for the payment of debts, public charges, taxes, and dues. (b) "Specie" means coins having precious metal content. Line 30 - Other Additions to Income Use line 30 if any of the special circumstances below apply. D. Partnership Income Adjustment (Positive) Depending on your situation, you may either add (line 30) or subtract (line 44) this amount. Use this adjustment if line 3, of your Arizona Form 165 Schedule K-1, shows a difference between federal and state distributable income. If the difference reported on line 3, of your Arizona Form 165 Schedule K-1, is a positive number, include that portion of the difference that is allocable to partnership income taxable by Arizona as an addition on line 30. NOTE: If you are reporting any adjustment on line 30 or line 44, complete page 5 of your tax return, Adjustments to Arizona Gross Income, and include it with your return. If are not reporting any adjustment on line 30 or line 44, do not include page 5 with your return. NOTE: If the difference reported on line 3, of your Arizona Form 165 Schedule K-1, is a negative number, include that portion of the difference that is allocable to partnership income taxable by Arizona as a subtraction on line 44. E. Items Previously Deducted for Arizona Purposes Arizona statutes prohibit a taxpayer from deducting items more than once. If your Arizona taxable income includes items previously deducted for Arizona purposes, you must add such amounts to your Arizona gross income. F. Claim of Right Adjustment for Amounts Repaid in 2020 You must make an entry here if all of the following apply: 1. During 2020, 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 2020 was more than $3,000. 4. You took a deduction for the amount repaid on your 2020 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. G. Claim of Right Adjustment for Amounts Repaid in Prior Taxable Years You must make an entry here if all of the following apply: • During a year prior to 2020 you were required to repay income held under a claim of right. • You computed your tax for that prior year under Arizona's claim of right provisions. • A net operating loss or capital loss was established due to the repayment made in the prior year. A. Non-Arizona Municipal Interest Enter interest income earned from non-Arizona municipal bonds while an Arizona resident. NOTE: You must reduce this addition by any interest or other related expenses incurred to purchase or carry the obligation. As a part-year resident, you must reduce the addition by the amount of those expenses attributable to income subject to Arizona tax. You may reduce the addition by those expenses that you could not deduct on your federal return. B. Ordinary Income Portion of Lump Sum Distribution Excluded on Your Federal Return Arizona law does not provide for averaging. Enter the amount of the distributions received while an Arizona resident and treated as ordinary income on your federal return. If you chose to treat the capital gain portion of the distributions as ordinary income, you must also include that amount on line 30. For more information, see the department’s ruling, ITR 93-5, Arizona's Income Tax Treatment of the Capital Gain Portion of a Lump Sum Distribution from a Qualified Retirement Plan. C. Fiduciary Adjustment - Form 141AZ Schedule K-1 and/or Schedule K-1(NR) A fiduciary uses Arizona Form 141AZ Schedule K-1 and/or Schedule K-1(NR), to report to you your share of the fiduciary adjustment from the trust or estate. Line 3 of Form 141AZ Schedule K-1 or K-1(NR), shows your share of the fiduciary adjustment from the estate or trust. Depending on your situation, you may either add (line 30) or subtract (line 44) this amount. If the amount reported on line 3 of your Form 141AZ Schedule K-1 or Schedule K-1(NR), is a positive number, enter that 11 Arizona Form 140PY You are entitled to take that net operating loss or capital loss carryover into account when computing your 2020 Arizona taxable income. • 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. H. Addition to S Corporation Income Due to Credits Claimed Shareholders of an S corporation who claim a credit passed through from an S corporation must make an addition to income for the amount of expenses disallowed by reason of claiming the credit. An S corporation that passes the following credits through to its shareholders must notify each shareholder of his or her pro rata share of the adjustment. You must include an amount on this line when claiming any of the following credits. • Agricultural Water Conservation System Credit (Form 312) • Pollution Control Credit (Form 315) • Credit for Employment of TANF Recipients (Form 320) I. Wage Expense for Employers of TANF Recipients If you claim a credit on Form 320, for employing TANF recipients, you cannot deduct any wage expense for which you claim the credit. If you take this credit, include the amount of such expenses that you deducted on your federal return. J. Adjusted Basis in Property for Which You Have Claimed a Credit for Investment in Qualified Small Businesses If you claim a credit for an investment in a qualified small business on Form 338, you must adjust your basis in the investment by the amount of the credit claimed. You must report this difference in basis on the Arizona return that you file for the taxable year in which you sell or otherwise dispose of the investment. If you sold or otherwise disposed of the investment during the 2020 taxable year, include the amount by which the adjusted basis computed under the IRC with respect to that property exceeds the adjusted basis of the property computed under A.R.S. § 43-1074.02. K. Nonqualified Withdrawals from 529 College Savings Plans You must make an addition to income if both of the following apply to you: • You received a nonqualified withdrawal from a 529 college savings plan. • You did not include the amount of the withdrawal in your federal adjusted gross income. The amount that you must add is the amount withdrawn, but no more than the difference between the amount of contributions subtracted in prior years and the amount added in any prior years. A nonqualified withdrawal is a withdrawal other than any of the following: A qualified withdrawal. A qualified withdrawal is a withdrawal from an account to pay the qualified higher education expenses of the designated beneficiary of the account. • A withdrawal made as the result of the death or disability of the designated beneficiary of an account. • A withdrawal that is made on the account of a scholarship, or the allowance or payment described in IRC § 135(d)(1)(B) or (C) and that is received by the designated beneficiary, but only to the extent of the amount of this scholarship, allowance or payment. • A rollover or change of designated beneficiary. L. Sole Proprietorship Loss of an Arizona Nonprofit Medical Marijuana Dispensary Included in Federal Adjusted Gross Income If you are registered as an Arizona sole proprietorship with the Arizona Department of Health Services to operate in this state as a nonprofit medical marijuana dispensary, you are required to add the amount of the loss from the dispensary that is included in the computation of your federal adjusted gross income. Include the amount of the loss on line 30. • • NOTE: If the Arizona nonprofit medical marijuana dispensary is registered with the Arizona Departm
Extracted from PDF file 2020-arizona-form-140py.pdf, last modified October 2020

More about the Arizona Form 140PY Individual Income Tax Nonresident TY 2020

This is the part year resident income tax return for Arizona. This easy to use package features "Fill it in...It does the math". Form 140PY requires you to list multiple forms of income, such as wages, interest, or alimony .

We last updated the Part-Year Resident Personal Income Tax Package in January 2021, so this is the latest version of Form 140PY, fully updated for tax year 2020. 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

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 2021.

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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 ten 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:


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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