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2021 Additional Credit for Increased Research Arizona Form
Activities for Basic Research Payments 346
Arizona Board of Regents, for research completed by the
CONTACTS FOR FURTHER INFORMATION
same university.
REGARDING THE ADDITIONAL CREDIT FOR
INCREASED RESEARCH ACTIVITIES FOR BASIC o The terms “basic research payments” and “qualified
organization base period amount” have the same meanings
RESEARCH PAYMENTS prescribed by IRC § 41(e), without regard to whether the
Arizona Commerce Authority taxpayer is, or is not, a corporation.
Website: www.azcommerce.com o The amount of the credit is based on the federal regular
Program Manager (602) 845-1200 credit computation method for basic research payments.
Taxpayers cannot use the federal alternative credit
Arizona Department of Revenue
computation method. The allowable current taxable year
Tax forms and instructions Information and assistance
credit is 10% of the excess, if any, of the basic research
Website: www.azdor.gov
payments over the qualified organization base period
Taxpayer assistance (602) 255-3381
amount for the taxable year.
From area codes 520 and 928, toll-free (800) 352-4090 o If two or more taxpayers, including shareholders of an S
Corporation and partners in a partnership, share in the
General Instructions eligible expenses, each taxpayer is eligible to receive a
Arizona Revised Statutes §§ 43-1074.01(A)(1)(c) and proportionate share of the credit.
43-1168(A)(1)(d) provide an additional income tax credit for o The termination provisions of IRC § 41 do not apply.
increased research activities for basic research payments made to a • If the current taxable year's credit exceeds the taxpayer’s tax
liability for the taxable year, the taxpayer may carry forward the
university under the jurisdiction of the Arizona Board of Regents.
unused credit to the next five consecutive taxable years.
You may be eligible for this credit if you made cash payments in
• This credit is not refundable.
excess of your base period amount to a qualified Arizona university
for research conducted in Arizona. CORPORATE TAXPAYERS: If two or more members of a unitary
This credit is available to: group, or an Arizona affiliated group incur qualifying basic research
•• Individuals, payments, the individual members of the group are not considered
•• Corporations, separate taxpayers. When a combined return, or a consolidated
•• Exempt organizations with unrelated business taxable income return is filed, the unitary group, or the Arizona affiliated group is
(UBTI), considered a single taxpayer.
• S Corporations using this credit to offset tax incurred at the
corporate level. Specific Instructions
•• S Corporations or partnerships may pass the credit through to their Complete the name and taxpayer identification number (TIN) section
shareholders or partners. at the top of the form. Indicate the period covered by the taxable year.
NOTE: For an exempt organization to claim this credit against its Include the completed form with the tax return.
UBTI, the credit must result from the activities generating. UBTI NOTE:
• All returns, statements, or other documents filed with the
CLAIMING THE CREDIT department must have the taxpayer’s Employer Identification
To claim this credit, the taxpayer must first apply for certification from Number (EIN) or TIN indicated on them.
the Arizona Commerce Authority (ACA) that the taxpayer’s basic • Taxpayers who fail to include their EIN or TIN may be subject to
research payments meet the requirements estabished by statute. Once a penalty.
the taxpayer receives certification from the ACA, the taxpayer then
applies to the Arizona Department of Revenue (Revenue) for NOTE – To claim this credit:
determination of the amount of the credit the taxpayer is eligible to • Individual taxpayers that did not make the Small Business
Income election, complete this credit form and Arizona Form
claim.
301, Nonrefundable Individual Tax Credits and Recapture.
IMPORTANT INFORMATION/CREDIT SUMMARY Include both completed forms with your Individual Income Tax
• The credit is limited to $10 million in total credits in a calendar Return, (Form 140, 140PY, 140NR, or 140X).
year. • Individual taxpayers that made the Small Business Income
• This credit is in addition to the credit for increased research election, complete this credit form and Arizona Form 301-SBI,
activities: Nonrefundable Individual Tax Credits and Recapture for Form
o Claimed by corporations on Arizona Form 308; 140-SBI, 140PY-SBI, 140NR-SBI and 140X-SBI. Include both
o Claimed by individuals on Arizona Form 308-I. completed forms with your SBI Tax Return (Form 140-SBI,
• This tax credit is allowed in an amount computed pursuant to 140PY-SBI, 140NR-SBI, or 140X-SBI).
Internal Revenue Code (IRC) § 41(e), except for: • C Corporations, S Corporations claiming this credit at the
o Only basic research payments [defined in IRC § corporate level, and exempt organizations with UBTI, complete
41(e))]which are made to a university under the jurisdiction this credit form and Arizona Form 300, Nonrefundable
of the Arizona Board of Regents are included. Corporate Tax Credits and Recapture. Include both completed
o The taxpayer must make basic research payments during forms with your tax return.
the taxable year to a university under the jurisdiction of the
