Form 332 Instructions - Credits For Healthy Forest Enterprises

Arizona Form 332

after you first claimed that credit, you must recapture a

choose to keep these credits and apply them to its own liability

percentage of the total training credit you took in all prior years.

generated at the corporate level.

If your qualification was revoked due to reasons beyond your

For each credit:

•

control as determined by Commerce, you do not have to

Enter the S corporation’s taxable year end.

•

recapture the credit.

Check the box corresponding to each election made by the S

If you are required to recapture the training credit, complete Part

corporation, (to claim the credit; or to pass the credit through

8. If not, skip to Part 9.

to its shareholders).

•

Each election must be signed by an officer of the S

Line 32 -

corporation.

Enter the taxable year in which your certification as a healthy

S corporations electing to pass both of these credits through to its

forest enterprise was revoked or terminated (i.e. if your taxable

shareholders, proceed to the instructions for completing Form

year end was 12/31/2015, enter “2015”).

332-S on page 11.

Line 33 -

Each S corporation shareholder is entitled to only a pro rata share

Enter the first taxable year in which your employment credit for

of pass-through each credit based on ownership interest in the S

healthy forest enterprises was allowed (i.e. if your taxable year

corporation. The total of the each credit allowed to all

end was 12/31/2014, enter “2014”).

shareholders may not exceed the amount that would have been

Line 34 -

allowed for a sole owner.

Subtract line 33 from line 32. Enter the difference. Enter the

NOTE:

Trusts and estates which are shareholders of S

difference. This is the number of years between when your

corporations, are not eligible to claim these credits. However,

employment credit was first allowed and when your certification

the share of an S corporation owned by a grantor trust that is

was revoked.

disregarded for federal income tax purposes is treated as owned

Line 35 -

by the grantor. The grantor may claim his or her share of these

The amount of credit you must recapture depends on the year you

credits.

first received the credit, and how long ago it was. Compare the

S corporations electing to pass through either the employment

amount on line 34 to the following table to determine the

credit or the training credit and claim the other credit at the

percentage of your Training Credit to be recaptured.

(For

corporate level:

example, if the number on line 34 is “3”, the percentage to be

•

If the S corporation elects to pass through the employment

recaptured is 60%. If the number on line 34 is “6” or greater, the

credit through to its shareholders and claim the training

percentage to be recaptured is “0”.) Enter that percentage here.

credit at the corporate level:

Number of years since

Percentage

Check to box on line 40 indicating the S corporation

receiving the credit:

recapture:

elects to pass the employment credit through to its

100%

shareholders. Have the election signed by an officer.

80%

Check the box on line 41 indicating the S corporation

60%

elects to claim the training credit at the corporate level.

40%

Have the election signed by an officer.

20%

Complete Form(s) 332-S, Part 1, lines 1 through 3, and

6 or more

Part 2, lines 4 and 5 for each shareholder.

Complete Form 332 claiming the training credit.

Line 36 -

•

If the S corporation elects to pass through the training credit

Enter the total amount of training credits that you were previously

to its shareholders and claim the employment credit at the

allowed to claim.

corporate level:

Line 37 -

Check the box on line 41 indicating the S corporation

elects to pass the training credit through to its

Multiply line 36 by the percentage on line 35. Enter the result.

shareholders. Have the election signed by an officer.

Line 38 -

Check the box on line 41 indicating the S corporation

Enter the amount of training credit subject to recapture that was

elects to claim the employment credit at the corporate

passed through from partnerships on Form 332-P, Part 3, line 13

level. Have the election signed by an officer.

and/or from S corporations on Form 332-S, Part 3, line 13.

Complete Form(s) 332-S, Part 1, lines 1 through 3, and

Line 39 -

Part 2, lines 5 and 6 for each shareholder.

Complete Form 332 claiming the employment credit.

Add line 37 and 38. Enter the total. This is the amount of

training credit subject to recapture.

Part 10 - Partner’s Share of Credits and Credit

Part 9 - S Corporation Credit Election

Recaptures

Lines 40 and 41 -

Partnerships claiming these credits must pass them through to its

partners. Proceed to the instructions for completing Form 332-P

An S corporation may make an irrevocable election to pass either,

on page 12.

or both, of these credits through to its shareholders. Or, it can

Form 332 Instructions - Credits For Healthy Forest Enterprises - 2016 Page 5

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