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Deductions
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Part Year / Non- Resident
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Credits
Refunds
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Form 140PTC
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Credit for Increased Excise Taxes
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Why does AZ not accept a Federal POA when all the other states I have dealt with do?
Arizona will accept the federal power of attorney form (federal Form 2848) provided the following changes are made. You must insert the phrase "and Arizona Department of Revenue" after the phrase "Internal Revenue Service" on lines 2 and 8 of federal Form 2848. You must also insert the appropriate Arizona tax type (for example, Arizona individual income tax) and appropriate Arizona tax form number on line 3 of federal Form 2848.
Why do I have to pay taxes on income I did not earn in Arizona?
Arizona law provides that Arizona residents are taxable on the same income that they report for federal income tax purposes, subject only to the specific modifications allowed under Arizona tax law. If you are taxed on income earned in another state by both Arizona and the other state, the credit for taxes paid to another state may be available to you if you filed a tax return with another state. See the Form 309 instructions for additional information.
I cannot make my payment in full; can I make payment arrangements?
If you cannot pay the full amount owed when you file, you may ask to make monthly installment payments. To make this request, wait unit the department processes your return and sends you an initial billing notice.
Is there any way you can tell me if my return has been received?
Please allow 8 weeks from the time your return was filed to check on your return. You may inquire about your return status by calling (602) 255-3381 or, if you are calling from area codes 520 or 928, you may call toll-free (800) 352-4090. This is an automated inquiry line. You must be ready to provide your social security number, zip code, filing status, and amount of refund you expect to receive.
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Is my retirement from another state taxed in Arizona?
Yes. Arizona will tax your retirement from another state.
Is unemployment taxable?
To the extent that unemployment is taxable for federal purposes, it is also taxable for Arizona purposes.
What are the filing requirements for Arizona?
The filing requirements are explained at the beginning of the instructions for Arizona income tax returns. If your gross income (for Arizona filing purposes,"gross income" means gross income as defined in the Internal Revenue Code, minus income included in gross income but excluded from Arizona taxations) is at least $15,000, you must file an Arizona income tax return. Also, you must file an Arizona income tax return if your Arizona adjusted gross income is at least $11,000 for married filing jointly or $5,500 for those filing as single, head of household or married filing separately.
Can I make a payment with my credit card?
No. Arizona has no provisions for paying by credit card at this time.
Do I have to send in an extension to the state if I already sent it in to the IRS?
A federal extension for filing income taxes will also extend your time to file Arizona income taxes. However, if you are making a tax payment with your extension request, you must use the Arizona extension form (Form 204) to make that payment in order to ensure your payment will be properly credited to your account.
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If I have income from another state is it taxable in Arizona?
Yes, an Arizona resident is subject to tax on all income from wherever derived.
What portion of my pension is taxable?
As a general rule, the same portion of your pension is taxable for Arizona purposes as is taxable for federal purposes. However,Arizona allows a subtraction, not to exceed a total of $2,500, for pensions from the State of Arizona and its political subdivisions or from U.S. government service, including the U.S. military.
What is the due date for my tax return?
Arizona individual income tax returns are due on the 15th day of the 4th month after the close of the taxable year. For most people, this is April 15th. If April 15th falls on a Saturday or Sunday, the return is due on the next business day. Tax returns for the year 2005 are due on April 17, 2006, unless you have obtained a valid extension.
Are capital gains reported on my Arizona tax returns?
Arizona has no special treatment for capital gains. Capital gains included in your federal adjusted gross income are included in your Arizona gross income and are taxed at your regular tax rate.
Are government bonds reported on Arizona Income tax?
Arizona allows a subtraction for interest on U.S. government obligations that are included in Arizona gross income. Arizona requires that municipal bond interest from other states be added to Arizona gross income. For more information see the department's Guideline for Exempt Securities, G 91-4.
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What is this 1099G form that I received from ADOR?
The 1099G is used by the state to report payments of tax refunds and interest to you and to the IRS.
How many weeks does my return take to process?
How long it takes your return to process depends on how you filed (e-file or paper) and when you filed. If you file early in the tax season, your return will be processed much faster than if you file at the last minute. Returns that are e-filed are processed faster than paper returns. Please allow 8 weeks from the date you filed before calling to check on the status of your return.
How do I e-file my return?
Electronic tax filing is the fastest and most accurate way to file an individual income tax return. Other benefits of e-file include refunds in as few as 5 to 7 days with a secure direct deposit to your financial institution. Internet web sites are available to permit you to electronically file your taxes using your personal home computer. The Department’s web site provides a list of IRS/DOR approved providers and e-file software.
If you do not have a home computer, you may use computers available in your local libraries, community centers, community colleges, etc.
All credits are made available on your Arizona return if you e-file. Some software does not support all credits, so be sure to research the software thoroughly before purchasing.
You need the following information to complete both your federal and state tax returns:
W-2s
1099s
spouse’s name and social security number
dependent names and social security numbers
all schedule A information (if applicable)
a copy of last year’s tax returns
all other tax records necessary to complete your return
If you do not have an Internet e-mail account, you need to create one using one of the free services (Hotmail, MSN, etc.). This is essential to receive your confirmation or rejection notice from the IRS and the ADOR. Those who wish to take advantage of Refund Direct Deposit need a check or a clear copy of one of your checks for input into the program. Both the IRS and the ADOR must know to which banking institution and which account to deposit the refund. Your check contains the routing and transit numbers necessary for the process.
The IRS generally sends acknowledgement within 24 hours of sending the electronic return. ADOR sends the acceptance notice within 48 hours after the IRS acknowledgement is received.
If you e-file, you must sign Arizona Form 8453, Arizona Individual Income Tax Declaration for Electronic Filing which must be retained for at least 4 years.
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How do I pay the tax due if I file electronically?
Yes, you can authorize an electronic funds withdrawal (direct debit) from your checking or savings account.
How can I initiate an electronic funds withdrawal?
If there is a balance due on your E-Filed return, most software packages will include an option for you to elect to pay by electronic funds withdrawal. Upon selection of this option, a payment record will display for entry of account information (most software). You can pay your balance due now or specify a future payment date up to and including April 15, 2006. Future dates cannot be selected beyond April 15, 2006.
How do I pay my balance due other than electronically?
If you do not choose to pay your balance due by electronic funds withdrawal, you can send in a check or money order with form AZ-140V Payment Voucher for Electronic Filing. Your tax professional or the software program used to file your return from home will instruct you how to submit this form. The form AZ-140V Payment Voucher for Electronic Filing, is printed directly from the software once the return has been completed.
What criteria must be met in order for Arizona to consider one a resident?
Whether one is considered an Arizona resident depends on the facts and circumstances of each case. For guidance in determining whether or not you are an Arizona resident, please consult Arizona Individual Income Tax Procedure ITP 92-1.
I don't have all of my W-2s. What am I supposed to do?
If you did not get a W-2 from your employer, use the IRS TeleTax system at 1-800-829-4477, topic number 154, to find out what you need to do. If you have lost your W-2 or it is incorrect, ask your employer for a new one.
I already sent in my return but I forgot to enclose my payment. Where do I send the payment?
Please send the payment to Arizona Department of Revenue. PO Box 52016, Phoenix, AZ 85072-2016. Be sure to write your social security number on your check. If your payment is postmarked after April 17, 2006, the Department can charge you a late payment penalty. This penalty is ½ of 1 percent (.005) of the amount shown as tax for each month or fraction of a month for which the failure continues. This penalty cannot exceed a total of 10 percent.
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Deductions
Why do I have to show contributions on line 14 of the Arizona Schedule A?
Arizona does not allow you to claim both a credit and a deduction for the same charitable contribution. You should enter an amount on line 14 of 140 Schedule A only if you are taking an Arizona tax credit for an amount included in your federal charitable deductions. Entering an amount here will reduce the federal charitable deduction allowed on your Arizona return by the amount of credit claimed.
If I claim the standard deduction on my federal return can I itemize on the Arizona return?
Yes. You may take the federal standard deduction and itemize Arizona deductions. You must fill out a federal Schedule A and, if applicable, an Arizona Schedule A and attach these forms to your return.
Can I claim the amount of federal tax that I paid on my state return?
No. You cannot deduct federal income taxes paid on your Arizona tax return.
What portion of my vehicle registration is tax deductible?
The lieu tax portion of your vehicle registration is the only deductible portion.
How do I fill out Arizona Schedule A?
There are instructions with the form that give step-by-step instructions in filling out the Arizona Schedule A. You must first fill out the Federal Schedule A.
Why didn't you give me credit for my children?
Arizona tax laws do not provide a credit for dependents, but there is an exemption allowed.
To get the dependent exemption for your children you must fill out all of the information asked for in Part A, lines A1 through A3, on back of Form 140. This includes names, social security numbers, relationships, and months lived in your home. If you do not furnish this information, you may lose the dependent exemption.
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Part Year / Nonresident
If I file as a nonresident, am I being taxed twice on my income, by Arizona and the other state?
As a nonresident of Arizona, your state of residence may allow a tax credit against its taxes for taxes paid to Arizona on the resident return that you file with that state. Contact your state of residency for more information about tax credits allowed by that state. In a few cases, Arizona allows nonresident individuals a credit against the Arizona income tax on the Arizona return. For more information, see Arizona Form 309.
If I file as a part-year resident, am I being taxed twice on my income by Arizona and the other state?
As a part-year resident, you are subject to Arizona tax on any income you earned during the portion of the year while an Arizona resident and any income you earned from an Arizona source before moving to (or after leaving) the state. If you are subject to tax by both Arizona and another state on the same income, you may be eligible for a tax credit for taxes paid to the other state. For more information, see Arizona Form 309.
I am a resident of another state but I work in Arizona. Do I have to file an Arizona return?
You have to file a tax return reporting any income earned in Arizona if you exceed the amounts listed in the filing requirements stated in the instructions of the Arizona income tax returns. If you do not exceed these requirements, you may want to file anyway to get back any Arizona income tax that has been withheld from your earnings.
I am an Arizona resident but my spouse is in the military and a nonresident of Arizona. What form do we file for Arizona?
If you want to file as married filing jointly, you should file a Form 140NR. If you want to file married filing separately, the Arizona resident files a Form 140, and the nonresident military spouse would file a Form 140NR showing that spouse's Arizona source income and his or her community property share of the resident spouse's income. See individual income tax rulings ITR 97-3, ITR 95-2, ITR 93-20 and Arizona Department of Revenue Pub 704, Taxpayers in the Military for additional information.
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Credits
Can I take both the public school tax credit and the school tuition tax credit?
Yes. For more information, see Arizona Department of Revenue Pub 707, School Tax Credits.
If I am a single individual that contributed more than $500 to a School Tuition Organization? Can I carry over the additional amount to the next tax year for credit purposes?
No. The credit for contributions to a school tuition organization for single individuals is limited to $500.
Do I get to take the School Tax Credit if I made contributions or paid fees to a Charter school?
You may take the public school tax credit for contributions made or fees paid to a public school in support of extracurricular activities or character education. This includes amounts paid to a charter school.
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Refunds
My spouse had a liability with Child Support prior to marriage but the state took all of "my" refund, I want it back what shall I do? (Fed Injured Spouse)
You need to call the Arizona Department of Economic Security at the telephone number listed on the notice you received.
The information line is saying that my check was mailed on ------------ and I have not received it. Why?
The department mails your refund to the address shown on your tax return unless you have notified the Department of a change of address. Sometimes mail is lost. If you have not received the check within two weeks of the date it was mailed, call (602) 255-3381 or toll-free (800) 352-4090 from area codes 520 or 928 for assistance.
Why was my refund offset to another state agency?
Arizona Revised Statutes § 42-1122 requires the department to offset a taxpayer's refund to pay a debt owed to another state agency or a court if the other agency or the court asks it to do so.
I had already paid off my debt in full to the other agency, so why did you still offset my refund? How do I get it back?
Apparently, the other agency did not notify the Department of Revenue that your debt was paid. You need to contact the agency that had your refund offset to get it back.
You offset my refund to a liability my spouse had incurred before we were married. I want my half of the refund returned to me, how can I do this?
You must contact the agency that had your refund offset at the telephone number on the notice you received.
I filed a joint return, but my spouse and I are now divorced. You issued the refund in both of our names but my spouse refuses to give me my half. What do I do?
This is a civil matter between you and your spouse.
The IRS has a form for innocent spouse. Does Arizona have something similar?
Yes. See Arizona Form 200, Request for Innocent Spouse Relief and Separation of Liability and Equitable Relief. Use this form if you are an innocent spouse (a person that has filed a joint return who is requesting relief from joint and several liability). Do not use this form if you are an injured spouse (a person whose share of an overpayment shown on a joint return was, or is expected to be, applied against that person's spouse's past-due state taxes, child support or spousal maintenance, or debts owed to another Arizona state agency).
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Estimated Payments
Why am I getting penalized for underpayment of estimated taxes when I am getting a refund?
If your 2005 Arizona gross income exceeds $75,000 and if your Arizona gross income for the 2004 taxable year was greater than $75,000(150,000 if married filing jointly), Arizona law required you to make estimated payments to cover the amount that was not covered by withholding during 2005. These payments were due on April 15, 2005, June 15, 2005, September 15, 2005, and January 17, 2006. If you did not make these payments on a timely basis, you may owe a penalty.
Do I have to pay estimated tax for 2006?
Arizona requires certain individuals to make estimated income tax payments.
You must make Arizona estimated income tax payments during 2006 if:
Your filing status is:
AND
Your Arizona gross income for 2005 was greater than:
AND
Your Arizona gross income for 2006 exceeds:
Married Filing Joint
$150,000
$150,000
Single
$75,000
$75,000
Head of Household
$75,000
$75,000
Married Filing Separately
$75,000
$75,000
See the instructions to Form 140ES for help in determining if you owe estimated payments.
If I sent in an estimated payment without the 140ES voucher will I be penalized?
The department needs Form 140ES to track estimated payments that you make and to give you proper credit for them. However, if your payments are timely no penalty is due.
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Form 140PTC
Can I amend my past returns to claim the PTC?
No. Property tax claims must be filed on or before the due date, including any extensions, for the year for which the credit is being claimed.
My mother is over 65, collects only SS, lives with me and pays rent. Can she claim the PTC?
Since your mother lives with you, the total household income must meet the PTC limitation. Currently, the total household income must be less than $5,501 for a claimant that lives with others.
Can I still file a 140PTC for previous tax years?
No. Property tax claims must be filed on or before the due date, including any extensions, for the year for which the credit is being claimed.
Can I file an extension for the Property Tax Credit?
Yes. You can request an extension of up to 6 months for filing your 140PTC. The request must be made by the original due date for filing the individual income tax return.
Do I have to file a separate form in addition to the 140PTC?
If the only reason you are filing is to claim the property tax credit, you do not have to file any form except the 140PTC.
What can I do if my landlord refuses to complete the renter's certificate?
Arizona Revised Statute section 43-1072.C requires the owner or lessor of the real property to furnish a written statement of the percentage of rental payments that are attributable to property tax. The failure to do so is a civil matter between the landlord and the tenant.
File a request for extension of time (Form 204) to file your 140PTC to allow yourself more time to get the information from your landlord. As a last resort, file your 140PTC by your extended due date and attach a note stating that you are still trying to get information from your landlord. When you finally get the information, you can file an amended 140PTC to claim your credit.
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Credit for Increased Excise Taxes
What is the credit for increased excise taxes?
This is a new refundable credit for low-income Arizona resident taxpayers to help mitigate the sales tax (transaction privilege tax) increase for education.
How much is the credit?
The amount of the credit is twenty-five dollars for each person who is a resident of Arizona and for whom a personal or dependent exemption is allowed on the Arizona return. For example, if you are married filing jointly, you may claim a credit of $25 for you, your spouse and $25 each for up to 2 dependents. If you are single, you may claim a credit of $25 for yourself and $25 each for up to 3 dependents. The credit cannot exceed $100 per household.
Who can claim the increased excise tax credit?
You may claim the increased excise tax credit if you meet all of the following criteria.
You were an Arizona resident during the taxable year.
You are not claimed as a dependent by any other taxpayer.
Your federal adjusted gross income is:
$25,000 or less if you are married filing a joint return;
$25,000 or less if you are filing as head of household;
$12,500 or less if single;
$12,500 or less if married filing separately.
Can I claim the increased excise tax credit even if I do not have to file an Arizona return?
Yes.
How can I claim the increased excise tax credit?
If you are filing an income tax return using Form 140, Form 140A, Form 140EZ, or Form 140PY claim this credit by completing the worksheet in the instructions for those forms.
If you are filing Form 140PTC claim this credit on Form 140PTC.
If you are or not required to file an Arizona income tax return and if you do not qualify for the property tax credit, you may claim this credit by filing form 140ET.
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