Effective with the 2016 tax filing that occurs in 2017, the Arizona Department of Revenue no longer requires business partnerships to submit federal Form 1065, federal Schedules K-1 (Form 1065) and all federal supporting schedules with their Arizona income tax return. Taxpayers are still required to have this supporting documentation available upon request.
2016 Partnership Highlights
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, 2016.
If you use the amounts from your 2016 federal tax return to complete your Arizona return and the Legislature does not adopt the 2016 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 Legal Research link for updates on the 2016 conformity.