Arizona Form 308 - Credit For Increased Research Activities

Arizona Form 308

amount you may carry forward, and how you may apply those

Line 8 –

amounts, differ depending on the tax year in which it was

Reserved.

earned.

Part 2 - Current Taxable Year's Credit

If you received a refund of 75% of the excess credit, you do not

Calculation

have any excess amount to carryforward for this year. Any

carryover amounts from the previous taxable year will be

Corporate Taxpayers (excluding S corporations, personal

carried over to the next taxable year, subject to the fifteen-year

holding companies, and service organizations): Begin

carryover period and annual limitations on the use of those

computing your current year’s credit on line 9.

carryovers.

All other taxpayers: Begin computing your current year’s

credit on line 12.

Specific Instructions

Line 9 -

Complete the name and employer identification number (EIN)

Enter the amount you paid to a qualified university, scientific

section at the top of the form. Indicate the period covered by

research organization, or grant organization for basic research

the taxable year. Include the completed form with the tax

conducted in Arizona.

return.

NOTE: You must have a written contract with the

All returns, statements, and other documents filed with the

organization to include these payments in the calculation.

department require a taxpayer identification number (TIN). The

TIN for a corporation, an exempt organization with UBTI, an

Line 10 -

S corporation or a partnership is the taxpayer's EIN. Taxpayers

Enter your base period amount based on your Arizona research

that fail to include their TIN may be subject to a penalty.

activity. Refer to IRC § 41(e) for a definition of base period

Part 1 - Qualification for the Credit

amount.

Line 1 -

NOTE: The amount reported on line 10, up to the amount

Did you have qualified research expenses for this taxable year?

reported on line 9, is not eligible for the basic research credit.

If you have qualified research expenses for this taxable

However, it can be treated as contract research expenses on

year and you intend to claim this credit, check the box

line 15.

labeled, “Yes”.

Line - 11

If you did not have qualified research expenses for this tax

If line 9 is greater than line 10, subtract line 10 from line 9.

year, check the box labeled, “No”. Go to line 3.

Enter the difference. If line 10 is greater than line 9, enter zero

Line 2 -

(“0”).

Is this credit refundable?

Line 12 -

If this credit is refundable, check the box labeled, “Yes”.

Enter total wages paid or incurred for qualified services

Provide the information requested on lines 2a1 and 2a2.

performed in Arizona. Do not include the amount of wages

If this credit is not refundable, check the box labeled,

paid to employees that were used in the calculation of the

“No”.

federal work opportunity credit.

NOTE: Wages include any wages paid or incurred to an

Are you claiming a pass through of this credit from a

employee for qualified services performed in Arizona.

partnership?

Qualified services are: (1) engaging in qualified research; or,

•

If you are claiming a pass through of this credit from a

(2) engaging in the direct supervision, or the direct support of

partnership, check the box labeled, “Yes”.

research activities conducted in Arizona that are defined as

•

If you are not claiming a pass through of this credit, check

qualified research.

the box labeled, “No”.

Line 4 -

Qualified research is an investigation undertaken to discover

information that is technological in nature. Its application must

Is this pass through credit refundable?

be intended for use in developing a new or improved business

•

If the pass through credit you received is refundable, check

component.

the box labeled, “Yes”.

•

If the pass through credit you received is not refundable,

Line 13 -

check the box labeled, “No”.

Enter the cost of supplies paid or incurred for use in conducting

NOTE: If an exempt organization receives a pass through of

qualified research in Arizona. Supplies include expenditures for

this credit from an S corporation, enter that information on

any tangible property, other than land or improvements to land,

lines 3 and 4.

and property of a character subject to the allowance for

depreciation.

Lines 5 - 7

Line 14 -

Answer the questions on lines 5 through 7 to determine if you

Enter the amount paid or incurred to rent or lease the right to

qualify for this credit. Your answers will help you complete

use computers in conducting qualified research in Arizona.

the remainder of this form.

Arizona Form 308 - Credit For Increased Research Activities - 2016 Page 2

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