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                                                                                                              Arizona Form 
2022       Credit for Qualified Facilities                                                                             349                
                                                                      The business must enter into a managed review with Commerce 
CONTACTS            FOR   QUALIFIED        FACILITY              TAX
                                                                      prior to  applying  for post-approval.  The  business  must  obtain 
INCENTIVES          PROGRAM                                           post-approval from Commerce prior to claiming the credit. The 
Arizona   Commerce Authority                                          first fifth of the apportioned credit is claimed on the tax return that 
 Application forms  Program guidelines                              includes the post-approval date.  
 Website: www.azcommerce.com                                          For example, Company A, is a calendar year filer. Company A 
                                                                      received pre-approval from Commerce for a qualified facility on 
Program   Manager                               (602) 845-1200        March 11,  2020, and received its post-approval on  March 14, 
Arizona   Department of Revenue                                       2022.  Because Company A  completed everything necessary to 
 Tax forms and instructions   Information and assistance            earn the credit in calendar year 2022, the first fifth of the credit 
 Website: www.azdor.gov                                                must be claimed on the tax return for calendar year 2022. 
Taxpayer assistance                             (602) 255-3381        NOTE:    Each fifth of the credit for qualified facilities must be 
                                                                      claimed on a timely filed original income tax return, including 
From  area codes 520 and 928, toll-free         (800) 352-4090        extensions. If you do not claim this credit on a timely  filed 
                 General Instructions                                 original  return, you cannot claim this  credit on  an amended 
                                                                      return.  Failing to claim this credit on a timely-filed original 
Arizona Revised Statutes (A.R.S.) §§ 43-1083.03 and 43-1164.04 
                                                                      return will result in loss of this credit for that taxable year.   
provide refundable individual and corporate income tax credits         
 for expanding or locating a qualified facility in this state.        The taxpayer may claim all five annual installments of a credit 
                                                                      that was preapproved before January 1, 2031 by the Arizona 
NOTE: Only capital investments in a qualified facility that are       Commerce Authority notwithstanding any intervening repeal or 
made  not more than thirty-six months before  submitting an           other termination of the credit.  
application for preapproval are included in the computation of 
                                                                      The amount of the credit for qualified facilities a taxpayer may 
the  credit.                                                          claim  can never exceed the amount  indicated  on the  post-
A “qualified facility” means a facility in this state that devotes at approval from Commerce.  
least 80% of the property and payroll at the facility to one or more 
                                                                      NOTE: The business must submit a copy of the Certification of 
of the following:  
                                                                      Qualification  (Certification)  from  Commerce  with  Form 349 
•    Qualified manufacturing,  
                                                                      when claiming the credit.  
•    Qualified headquarters,                                           
                                                                      Co-owners of a business, including partners in a partnership and 
•    Qualified research.  
                                                                      shareholders of an S Corporation, may each claim only the          pro 
This credit is effective for taxable years beginning from and after 
                                                                      rata share of the apportioned credit based on ownership interest. 
December 31, 2012, through December 31, 2030, and is limited 
                                                                      The total of the apportioned credits allowed to all such owners 
to 10% of the lesser of:  
                                                                      may not exceed the amount that would have been allowed for a 
•    The  taxpayer's  total  capital  investment  in  the qualified    sole owner of the business. 
     facility, or,  
                                                                      The credit is available to an exempt organization that is subject to 
•    If the total qualifying investment is less than $2,000,000,000, 
                                                                      corporate income tax  on unrelated  business taxable income 
     $200,000 for each net new full-time employment position(s) 
                                                                      (UBTI). The credit must result from the activities that generate 
     with job duties associated with the qualified facility.  
                                                                      UBTI.  
•    If the total qualifying investment is $2,000,000,000 or more,     
     $300,000 for each net new full-time  employment position                            Credit Recapture 
      that has job duties associated with the qualified facility.     During the pre-approval process with Commerce, the applicant 
The  credit is apportioned and claimed  in  five  equal annual        must consent to adjustment or recapture of the income tax credit 
installments in each of five consecutive taxable years and is in      in the case of noncompliance with A.R.S. § 41-1512.  
lieu of the credit for New Employment claimed on Form 345,            If, within five taxable years  after first  receiving the  credit for 
with  respect to the same employment positions.                       qualified facilities, the Certification is rescinded by Commerce, 
To claim this credit a business must apply for, and receive pre-      the  taxpayer  is disqualified from  the apportioned credits for 
approval from the Arizona Commerce Authority  (Commerce).             subsequent  taxable years and may be subject to recapture. 
Commerce  cannot pre-approve income tax credits for any  one          On a  determination that the taxpayer has committed fraud or 
taxpayer in  excess of $30  million  in any calendar  year.           relocated outside of this state within five taxable years of first 
Commerce cannot pre-approve income tax credits in excess of           receiving a  credit, all credits previously allowed  are  subject to 
$70  million annually                                                 recapture.  
Once pre-approval is received, the business must incur at least       The recapture of the credit is computed by increasing the amount 
$250,000 in  qualifying investment  within 12  months of pre-         of taxes imposed in the year following the year of termination or 
approval.  
                                                                      revocation by the full amount of all credits previously allowed. 
The  tax  year of pre-approval determines the "allocation  year.” 
The allocation year is the calendar year to which the credit was 
applied to the annual credit cap.

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Arizona Form 349
Part 2 - Full-Time Employment Positions
Specific Instructions
Vacant More than 150 Days
Complete the name and taxpayer identification number (TIN)
section at the top of the form. Indicate the period covered by the Lines 7 and 8
taxable year. Include the completed form with the tax return. If you had full-time employment positions that were vacant for
All returns, statements, and other documents filed with the more than 150 days since this credit was approved, enter the
department require a TIN. The TIN for a corporation, an S requested information in the columns provided for lines 7 and 8:
Corporation, an exempt organization with UBTI, or a partnership (a) Allocation Year – the calendar year to which the credit was
is the taxpayer's employer identification number (EIN). The TIN originally applied to the annual credit cap.
for an individual is the taxpayer's Social Security Number or an (b) Post-Approval Number – the priority placement number
Internal Revenue Service individual taxpayer identification issued to the facility by Commerce.
number. A taxpayer that fails to include its TIN may be subject to (c) Number of Employees – the total number of employees at
a penalty. the facility for which the position(s) was vacant for more
Part 1 - Listing of Post-Approved Qualified than 150 days since the credit was approved.
(d) Reduction – $4,000.
Facilities and Apportioned Credit Amount (e) Total – multiply the amount in column (c) by $4,000
List the qualified facilities for which you are entitled to claim a [column (d)]. Enter the result.
credit for this taxable year. The first fifth of the credit(s) for
qualified facilities must be claimed on the tax return that includes Line 9
the post-approval date and must be filed timely, including any If you had more than two facilities with full-time employment
extensions. positions vacant for more than 150 days, include a separate
schedule providing the same information required for lines 7 and
Lines 1 and 2 8. Total the amounts on the included schedule. Enter that total.
Enter the following information in the columns indicated on lines
1 and 2: Line 10
(a)1 Allocation Year – the calendar year to which the credit was Add the amounts in column (e) of lines 7 through 9. Enter the
applied to the annual credit cap. This date will be noted on total.
the post-approval document received from Commerce. Part 3 - Net Credit
(a)2 First Installment Tax Year Ending – the tax year the first
Line 11
installment of the credit may be claimed. This date is found
on the post-approval letter received from Commerce. Enter Subtract the amount on line 10 from the amount on line 6. Enter
the date in MMDDYYY format. the difference. If less than zero, enter “0”.
(a)3 Post-Approval Number – the priority placement number Part 4 - Credit Recapture
issued to each facility by Commerce.
Line 12
(b) Apportioned Credit Amount – list the apportioned credit
amount (one-fifth per year for 5 years) indicated on the Post- Enter the date on which the certification of the business as a
qualified facility was terminated or revoked.
Approval for the qualified facility.
Line 13
Line 3
If you received this credit from more than two qualified facilities, Enter the total amount(s) of the credit(s) previously claimed by
include a separate schedule providing the same information you for the facility(ies) whose certification was terminated or
required for lines 1 and 2. Total the credit(s) on a separate revoked. If more than one certification was terminated or
revoked, enter the total amount. Include a schedule providing the
schedule, and include it with this form. Enter that total on line 3.
detailed amount(s) of credit being recaptured.
Note to lines 4 and 5: If you received a pass through of this
credit from more than one partnership and/or S Corporation, Note to lines 14 and 15: If you received a credit recapture from
total the amounts received from all Forms 349-P and/or Forms more than one partnership and/or S Corporation, total the
349-S and enter the amount. Include a copy of each Form 349-P amount(s) of credit recapture passed through from all Forms
349-P and/or Forms 349-S and enter the total. Include a copy of
and/or Form 349-S you received with your return. each Form 349-P and/or Form 349-S you received with your
Line 4 return.
Enter the total amount of this credit passed through from
partnerships on Form 349-P, line 3c Line 14
Enter the partner’s portion of this credit to be recaptured from
Line 5 Form 349-P, Part 2, line 7.
Enter the total amount of this credit passed through from S
Line 15
Corporations on Form 349-S, line 3c.
Enter the S Corporation shareholder’s portion of this credit to be
Line 6 recaptured from Form 349-S, Part 2, line7.
Add the amounts in column (b) of lines 1 through 5. Enter the
total. Line 16
Add lines 13 through 15. Enter the total. This is your total
recapture amount.

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Arizona Form 349
Part 5 - S Corporation Credit Election and Each partner is entitled to only a pro rata share of each credit
Shareholder’s Share of Credit and Credit based on the partner’s ownership interest in the partnership. The
total of each credit allowed to all partners may not exceed the
Recapture amount that would have been allowed for a sole owner.
Lines 17, 17a, & 17b – S Corporation Credit Election NOTE: Trusts and estates that are partners in a partnership are
The S Corporation must complete line 17 and line 17a or line not eligible to claim this credit. However, the share of a
17b. The S Corporation must make an irrevocable election either partnership owned by a grantor trust that is disregarded for
to claim the current taxable year credit at the corporate level or to federal income tax purposes is treated as owned by the grantor.
pass the credit through to its shareholders. The S Corporation The grantor may claim his or her share of the credit.
election is made by:
• Entering the date the S Corporation taxable year ends in the Part 7 - Credit Recapture Summary
Line 18
box provided.
• Checking the box on line 17a electing to claim the current
Enter the taxable year(s) for which you claimed a credit for a
taxable year credit at the corporate level; or,
business as a qualified facility whose certification has been
• Checking the box on line 17b electing to pass the current
terminated or revoked.
taxable year credit through to its shareholders.
Line 19
• The election statement must be signed by one of the officers
Enter the total amount of this credit originally claimed on prior
of the S Corporation who is also a signatory to Arizona
returns.
Form 120S.
Individuals, C Corporations, S Corporations that claimed the
If the S Corporation elects to claim the credit at the corporate
credit at the corporate level, and exempt organizations with
level, continue to Part 7. UBTI: Enter the amount from Part 4, line 16.
If the S Corporation elects to pass this credit through to its
Individuals that did not make the Small Business Income
shareholders, proceed to the instructions for completing Form
election - Also, enter this amount on Form 301, Part 2, line 29.
349-S on page 5.
Individuals that made the Small Business Income election -
If passing this credit through to the shareholders:
Also, enter this amount on Form 301-SBI, Part 2, line 22.
• Complete Form 349-S for each shareholder.
• Provide each shareholder with a copy of his or her C Corporations, S Corporations that claimed the credit at the
completed Form 349-S. corporate level, and exempt organizations with UBTI: Also, enter
this amount on Form 300, Part 2, line 21.
• Include a copy of each completed Form 349-S with your tax
return. Part 8 - Total Apportioned Credit Claimed This
• Keep a copy of each completed Form 349-S for your Taxable Year
records. Line 20
Each S Corporation shareholder is entitled to only a pro rata
Enter the current year's apportioned credit for qualified facilities.
share of pass-through credit based on ownership interest in the S
Corporation. The total of the credit allowed to all shareholders Individuals, C Corporations, S Corporations that elected to claim
may not exceed the amount that would have been allowed for a the credit at the corporate level, and exempt organizations with
UBTI: Enter the amount from Part 3, line 11.
sole owner.
Partnerships : Enter “0”.
NOTE: Trusts and estates that are shareholders of S
Corporations, are not eligible to claim this credit. However, the S Corporations that passed the credit through to individual
share of an S Corporation owned by a grantor trust that is shareholders : Enter “0”.
disregarded for federal income tax purposes is treated as owned by Enter this amount and check the box for Form 349 on your tax
the grantor. The grantor may claim his or her share of the credit. return as instructed below:

Individuals that did not make the Small Business Income
Part 6 - Partner’s Share of Credit and Credit
election: Also, enter the amount on Form 140, line 58; or Form
Recapture 140NR, line 65; or Form 140PY, line 67; or Form 140X, line 45.
A partnership claiming this credit must pass it through to its Individuals that made the Small Business Income election:
partners. Skip to the instructions for completing Form 349-P on Also, enter this amount on Form 140-SBI, line 58; or Form
page 4. 140NR-SBI line 56; or Form 140PY-SBI, line 58: or Form
• Complete Form 349-P for each partner. 140X-SBI, line 58.
• Provide a completed copy of Form 349-P to each partner. C Corporations: Also, enter the amount on Form 120, line 22; or
• Provide a copy of the Certificate of Renewable Energy Form 120A, line 14; or Form 120X, line 22(c).
Production Tax Credit received from Commerce to each
Exempt organizations with UBTI: Also, enter the amount on
partner.
Form 99T, line 12.
• Include a copy of each completed Form 349-P with your tax
return. S Corporations that elected to claim the credit at the corporate
• Keep a copy of each completed Form 349-P for your level : Also, enter the amount on Form 120S, line 20.
records.
• Do not complete the remainder of this form.

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Arizona Form 349
Part 2 - Notification of Credit Recapture
Form 349-P,

Distribution to Partners of a To notify the partners of the amount of the credit that
Partnership must be recaptured (complete lines 4 through 7):

Enter the taxable year for which this credit is being passed Line 4
through to your partners. Enter the partnership’s name and EIN in the spaces
Complete Form 349-P for each partner of the partnership, provided.
except for trust or estate partners. However, a partnership Line 5
ownership share that is owned by a grantor trust that is Enter the partner’s name and TIN in the spaces provided.
disregarded for federal income tax purposes is treated as
owned by the grantor. The grantor may claim his or her Line 6
share of the credit. Enter the post-approval number received from Commerce
The partnership must furnish each partner with their and the date the certification was terminated or revoked in
completed copy of Form 349-P, including additional the spaces provided.
schedules as needed. Line 7
NOTE: Form 349-P can be used to distribute the Enter the total amount of the credit(s) previously passed
partnership’s share of this credit to its partners, or it can be through to the partner for the facility(ies) whose certification
used to notify the partners of the amount of the credit to be was terminated or revoked. This is the partner’s portion of
recaptured. the credit to be recaptured.

Part 1 - Distribution of the Credit This is the partner’s portion of the credit to be
To distribute the credit to the partners of the partnership recaptured.
(complete lines 1 through 3):
Line 1
Enter the partnership name, EIN, and the post-approval
received from Commerce in the spaces provided.
Line 2
Enter the partner’s name and TIN in the spaces provided.
Line 3a
Enter the amount of this credit from the partnership’s
Form 349, Part 3, line 11.
Line 3b
Enter the partner’s ownership percentage.
Line 3c
Multiply line 3a by line 3b and enter the result.

This is the partner’s portion of the credit.

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Arizona Form 349
Form 349-S, Distribution to Part 2 Notification of Credit Recapture
Shareholders of an S Corporation To notify the shareholders of the amount of the credit
that must be recaptured (complete lines 4 through 7):
Enter the taxable year for which this credit is being passed
through to your shareholders. Line 4
Complete Form 349-S for each shareholder of the S Enter the S Corporation name and EIN in the spaces
Corporation, except for trust or estate shareholders. provided.
However, an S Corporation ownership share that is owned Line 5
by a grantor trust that is disregarded for federal income tax
Enter the shareholder’s name and TIN in the spaces
purposes is treated as owned by the grantor. The grantor
provided.
may claim his or her share of the credit.
The S Corporation must furnish each shareholder with a Line 6
completed copy of Form 349-S, including additional Enter the post-approval number received from Commerce
schedules as needed. and the date the certification was terminated or revoked in
the spaces provided.
NOTE: Form 349-S can be used to distribute the S
Corporation’s share of this credit to its shareholders, or it Line 7
can be used to notify the shareholders of the amount of the Enter the total amount of the credit(s) previously passed
credit to be recaptured. through to the shareholder for the facility(ies) whose

certification was terminated or revoked. This is the
Part 1 - Distribution of the Credit shareholder’s portion of the credit to be recaptured.
To distribute the credit to the S Corporation
shareholders (complete lines 1 through 3): This is the shareholder’s portion of the credit to be
recaptured.
Line 1
Enter the S Corporation name, EIN, and the post-approval
number received from Commerce in the spaces provided.
Line 2
Enter the shareholder’s name and TIN in the spaces
provided.
Line 3a
Enter the amount of this credit from the S Corporation’s
Form 349, Part 3, line 11.
Line 3b
Enter the shareholder’s ownership percentage.
Line 3c
Multiply line 3a by line 3b and enter the result.

This is the shareholder’s portion of the credit.

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