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2021 Credit for Business Contributions by an S Corporation
to School Tuition Organizations for Displaced Students Arizona Form
or Students with Disabilities - Individual 341-I
The corporate STO credit passed through from the S
For information or help, call one of the numbers listed: Corporation is a different credit that is not subject to the
Phoenix (602) 255-3381 limitations under the two individual private school tuition
From area codes 520 and 928, toll-free (800) 352-4090 credits.
Tax forms, instructions, and other tax information Individual Shareholders of an S Corporation with a Fiscal
If you need tax forms, instructions, and other tax information, Year-End - If you file your tax return on a calendar year basis,
go to the department’s website at www.azdor.gov. but the corporation files a return for a fiscal year, claim the
credit on your tax return for the year in which the corporation's
Income Tax Procedures and Rulings fiscal year ends. For example, if the corporation's tax year ends
These instructions may refer to the department’s income tax in February 2022, claim the credit on your 2022 tax return.
procedures and rulings for more information. To view or print
Co-owners of the S Corporation may each claim the pro rata
these, go to our website select Reports, Statistics and Legal
share of the credit allowed based on the taxpayers ownership
Research from the main menu, then click on Legal Research
interest. The total of the credits allowed all owners of the
and select a Document Type and Category from the drop down
corporation may not exceed the amount that would have been
menus.Publications
allowed a sole owner of the business.
To view or print the department’s publications, go to our
If the allowable tax credit exceeds the taxes otherwise due, or if
website select Reports, Statistics and Legal Research from the
there are no taxes due, you may carry the unused credit forward
main menu then click on Publications in the left hand column.
for a period not to exceed the next five consecutive taxable
years’ income tax liability.
General Instructions
NOTE: The maximum amount of credit established for the
NOTE: current taxable year does not include any unused valid
• Individual taxpayers that did not make the Small carryover amount(s) from prior taxable years. Because this is
Business Income election, complete this credit form and a nonrefundable tax credit, the total amount of available credit
Arizona Form 301, Nonrefundable Individual Tax Credits [current year plus any valid carryover amount(s)] that a
and Recapture. Include both completed forms with your taxpayer may use for the taxable year cannot be greater than
Individual Income Tax Return, (Form 140, 140PY, 140NR the tax liability shown.
or 140X).
You cannot claim both a tax credit and an Arizona itemized
• Individual taxpayers that made the Small Business
Income election, complete this credit form and Arizona deduction for the amount of contributions made to a STO for
Form 301-SBI, Nonrefundable Individual Tax Credits and which you are claiming a credit.
Recapture for Form 140-SBI, 140PY-SBI, 140NR-SBI and NOTE: This tax credit is not allowed if the S Corporation or a
140X-SBI. Include both completed forms with your SBI shareholder designates the contribution to the STO for the
Tax Return (Form 140-SBI, 140PY-SBI, 140NR-SBI or direct benefit of any dependent of a shareholder of the
140X-SBI). corporation claiming a credit under this section or if the
Arizona law allows an individual shareholder to claim a corporation or a shareholder designates a student beneficiary
nonrefundable tax credit for the pro rata share of contributions as a condition of the contribution to the STO.
made by an S Corporation to a school tuition organization The tax credit is not allowed if the S Corporation or a
(STO). shareholder, with the intent to benefit a shareholder's
The S Corporation must make an irrevocable election on dependent, agrees with one or more other taxpayers to
Arizona Form 341, Credit for Contributions to School Tuition designate reciprocal contributions to school tuition
Organization for Displaced Students or Students with organizations for the direct benefit of the other taxpayer's
Disabilities, to pass-through the credit to its individual dependent.
shareholder(s). The S Corporation making the election should For Arizona purposes, “dependent” has the same meaning
give you Arizona Form 341-S, Credit for Corporate provided in section § 152 of the Internal Revenue Code. For
Contributions to School Tuition Organizations for Displaced the purpose of this credit, it does not matter if the shareholder
Students or Students with Disabilities - Distribution to qualifies to take the dependent deduction.
Shareholders of an S Corporation, showing your pro rata share
of the available credit for the taxable year. The amount of the Line-by-Line Instructions
allowable credit you may claim is reported on Form 341-S.
Enter your name and taxpayer identification number (TIN) as
An individual shareholder may claim a corporate STO credit shown on Arizona Forms 140, 140NR, 140PY, or 140X.
passed through from an S Corporation even if the individual is Indicate the period covered by the taxable year. Include the
claiming the maximum amount allowed under the two individual completed form with the income tax return.
private school tuition credits (Arizona Forms 323 and 348).
