Instructions For Arizona Form 120s - Arizona S Corporation Income Tax Return

Arizona Form 120S

(i) Ninety percent of the portion of the current taxable

based on the amount of the tax payment. The service provider

year's Arizona tax liability that is attributable to

will disclose the amount of the convenience fee during the

built-in gains income or certain capital gains

transaction and the option to continue or cancel the

income; plus

transaction will be presented. If you accept the convenience

fee and complete the credit card transaction, a confirmation

(ii) One hundred percent of the portion of the prior

number will be generated. Please keep this confirmation

taxable year's Arizona tax liability that is attributable

number as proof of payment.

to excess net passive income.

Extension of Time to File a Return

NOTE: In order for the taxpayer to base its estimated tax

payments on the tax liability described in (b) above, the

The S corporation can apply for an Arizona extension by filing a

taxpayer's return filed for the prior taxable year must have

completed Form 120EXT by the original due date of the return.

been for a period of twelve months.

The S corporation can use a valid federal extension rather than

applying for an Arizona extension. Form 120EXT must be used

Taxpayers required to make Arizona corporate estimated tax

to transmit extension payments via check or money order,

payments should use the 2012 Form 120W, Estimated Tax

whether the S corporation uses a valid federal extension or

Worksheet for Corporations, to compute the required installments.

requests an Arizona extension. Taxpayers that make extension

STIMATED

AYMENTS BY

LECTRONIC

UNDS

RANSFER

payments over the internet need not file Form 120EXT, unless

an Arizona extension is being requested. The S corporation

Taxpayers whose Arizona corporate income tax liability for

must pay at least 90 percent of the tax liability (including the

the preceding taxable year was $20,000 or more must make

$50 minimum tax) by the original due date of the return.

Arizona corporate estimated tax payments via electronic

funds transfer. Taxpayers whose Arizona corporate income

The department grants an Arizona extension for a period of

tax liability for the preceding taxable year was less than

six months. Arizona law provides that six months is the

$20,000 may elect voluntary participation in the electronic

maximum extension of time to file that the department may

funds transfer program. If a taxpayer makes its estimated tax

grant. However, Arizona law provides that the department

payments by electronic funds transfer (EFT), the taxpayer

may accept the federal extension for the same period of time

should not submit Form 120ES to the department. Taxpayers

as covered by the federal extension.

who make estimated tax payments via electronic funds

Either the Arizona or federal extension provide an extension

transfer must complete the department's electronic funds

of time to file, but do not provide an extension of time to pay.

transfer authorization agreement at least 30 days prior to

Penalties and Interest

initiation of the first applicable transaction.

A. Late Filing Penalty. A return filed after the original due

Refer to ARS § 42-1129 and the related Arizona

date is subject to the late filing penalty unless the S corporation

Administrative Code rules (AAC R15-10-301 through

has a valid federal or Arizona extension. A return filed after its

R15-10-307) for detailed information.

extended due date is also subject to the late filing penalty. The

NOTE: Taxpayers required to make corporate estimated

late filing penalty is 4½ percent (.045) of the amount of tax

payments via EFT that fail to do so are subject to a penalty of

required to be shown on the return. “Amount of tax required to

5%. See ARS § 42-1125(O).

be shown on the return” is the amount of tax imposed less the

amount of any part of the tax paid on or before the beginning of

STIMATED

AYMENTS VIA THE

NTERNET

the month and the amount of any credit against the tax which

Taxpayers must be licensed by the Department of Revenue

may be claimed on the return. The penalty period is each month

before they can register to pay taxes online. Visit

or fraction of a month between the due date of the return and the

to register and make estimated tax

date the S corporation filed the return. The maximum penalty is

payments over the internet. If a taxpayer makes its estimated

25 percent of the tax found to be remaining due.

tax payments via the internet, the taxpayer should not submit

B. Extension Underpayment Penalty. The department imposes

Form 120ES to the department.

the extension underpayment penalty on any late or underpaid

Electronic payment from checking or savings account

extension payments. The extension underpayment penalty is one-

Estimated tax payments can be made electronically from a

half of one percent (.005) of the tax not paid. The penalty period

checking or savings account. Visit and

is each 30 day period or fraction thereof between the original

choose the e-check option. There is no fee to use this method.

due date of the return and the date the S corporation paid the tax.

This payment method will debit the amount from the

The maximum penalty is 25 percent of the unpaid tax.

specified checking or savings account on the date specified.

Taxpayers subject to the extension underpayment penalty are

If an electronic payment is made from a checking or savings

not subject to the late payment penalty prescribed under ARS

account, a confirmation number will be generated. Please

§ 42-1125(D).

keep this confirmation number as proof of payment.

C. Late Payment Penalty. The department imposes the late

payment penalty on any amount shown as tax on a return that is

Credit card payment

not paid by the date prescribed for its payment. “Amount of tax

Estimated tax payments can be made via American Express,

shown on the return” is the amount of tax imposed shown on

Discover,

MasterCard

VISA

credit

cards.

Visit

the return less the amount of any part of the tax paid on or

and choose the credit card option. This will

before the beginning of the month and the amount of any credit

take you to the website of the credit card payment service

against the tax which may be claimed on the return. The late

provider. The service provider will charge a convenience fee

payment penalty is one-half of one percent (.005) of the unpaid

Instructions For Arizona Form 120s - Arizona S Corporation Income Tax Return - 2011 Page 2

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