Arizona offers a variety of tax credits for individual taxpayers that may reduce Arizona income tax liability. Some credits are nonrefundable and can reduce tax only to zero, while certain credits are refundable if statutory requirements are met. Most credits are claimed using Arizona Form 140 and the applicable supporting credit forms.
Key Arizona Tax Credits for Individuals
- Credit for Increased Research Activities (Basic Research Payments) – Arizona provides a credit for qualifying increased research activities and basic research payments conducted in Arizona. Taxpayers claiming this credit must meet statutory requirements and complete the applicable Arizona credit form.
- Credit for Contributions to Certified School Tuition Organizations (STOs) – Individuals who make qualifying contributions to certified School Tuition Organizations may be eligible to claim a credit using the applicable Arizona STO credit form.
- Credit for Contributions to Public Schools – Individuals who make qualifying contributions to Arizona public schools may be eligible for a nonrefundable tax credit using the applicable Arizona credit form.
- Credit for Contributions to Qualifying Charitable Organizations (QCOs) – Individuals who make cash contributions to qualifying charitable organizations may claim a nonrefundable credit using Arizona Form 321.
- Credit for Contributions to Qualifying Foster Care Charitable Organizations (QFCOs) – Individuals who make qualifying cash contributions to qualifying foster care charitable organizations may claim a nonrefundable credit using Arizona Form 352.
- Property Tax Credit – Eligible taxpayers may claim the refundable Arizona Property Tax Credit using Form 140PTC, subject to age, income, residency, and other statutory requirements.
- Credit for Qualified Facilities – Certain taxpayers may qualify for a credit related to qualified facilities under Arizona law. Eligibility requirements and application procedures are administered in accordance with Arizona statutes and applicable program requirements.
- Enterprise Zone Credit – The Enterprise Zone Credit was repealed for new credits effective July 1, 2011. Taxpayers may continue to claim allowable carryforwards from credits properly established before repeal, subject to statutory limitations.
How to Claim Credits on Arizona Form 140
- Complete the appropriate Arizona credit form for each credit claimed.
- Use Arizona Form 301, when required, to summarize applicable nonrefundable individual tax credits.
- Transfer credit amounts to the appropriate lines of Arizona Form 140 as instructed for the applicable tax year.
- Include all required forms, schedules, and supporting documentation in accordance with Arizona Department of Revenue filing instructions.
Source:
Form 140
Form 321
Form 352
Form 140PTC
Disclaimer: Always verify details with the official Arizona Department of Revenue forms and instructions. Tax laws and eligibility criteria may change annually. For complex situations, consult a CPA or tax professional.