The Arizona State Credit 333, also known as the Credit for Employing National Guard Members, allows employers in Arizona to claim a tax credit of $1,000 for each employee who is a member of the Arizona National Guard and is placed on active duty during the taxable year. This credit is designed to support businesses that employ National Guard members by offsetting payroll tax liabilities.
Eligibility Requirements
- The employee must be a member of the Arizona National Guard.
- The employee must be in a full-time equivalent position at the time they are placed on active duty.
- The National Guard member must have served on active duty for training that exceeds the required annual training period, including any federal or state activations during the taxable year.
Pass-Through Entities: Partnerships
For partnerships, the credit is passed through to individual partners based on their ownership percentage. Partnerships must file Form 333-P, which is available on the Arizona Department of Revenue (AZDOR) website, to distribute the credit to partners. The form requires:
- Partnership name and Employer Identification Number (EIN).
- Each partner’s name, SSN or EIN, and ownership percentage.
Pass-Through Entities: S Corporations
An S corporation must make an irrevocable election to either:
- Claim the credit at the entity level, or
- Pass the credit through to its shareholders using Form 333-S (Credit for Employing National Guard Members Distribution to Shareholders).
If the credit is passed through, Form 333-S must be completed to report each shareholder's share of the credit.
Source:
Form 333 - Credit for Employing National Guard Members (Arizona Department of Revenue)
Arizona Form 333-P Credit for Employing National Guard Members Distribution to Partners
Arizona Form 333-S Credit for Employing National Guard Members Distribution to Shareholders
Disclaimer: Always verify details with the current year’s official forms and instructions from the Arizona Department of Revenue or consult a tax professional for personalized advice.