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Arizona Form 120A

Electronic payment from checking or savings account

All taxpayers, except financial institutions as defined in ARS

§ 6-101, must reduce the amount of interest income by

Payments can be made electronically from a checking or

certain expenses. Reduce the amount of interest income by

savings account. Visit and choose the e-

the amount of any interest on indebtedness and other related

check option. There is no fee to use this method. This

expenses incurred or continued to purchase or carry those

payment method will debit the amount from the specified

obligations that were not otherwise deducted or subtracted in

checking or savings account on the date specified. If an

the computation of Arizona gross income.

electronic payment is made from a checking or savings

account, a confirmation number will be generated. Please

Line A5 - Federal Special Deductions

keep this confirmation number as proof of payment.

Enter the special deductions claimed on the federal tax return

Credit card payment

for dividends received pursuant to IRC §§ 243, 244, and 245.

Payments can be made via American Express, Discover,

Line A6 - Federal Net Operating Loss

MasterCard or VISA credit cards. Visit and

Enter the federal net operating loss deduction claimed on the

choose the credit card option. This will take you to the website

federal tax return.

of the credit card payment service provider. The service

Line A7 - Domestic International Sales Corporations

provider will charge a convenience fee based on the amount

Enter commissions, rentals, and other amounts paid or

of the tax payment. The service provider will disclose the

accrued to a Domestic International Sales Corporation

amount of the convenience fee during the transaction and the

(DISC) controlled by the payor corporation. Make this

option to continue or cancel the transaction will be presented.

adjustment if the DISC does not have to report its taxable

If you accept the convenience fee and complete the credit

income to Arizona because its income is not derived from or

card transaction, a confirmation number will be generated.

attributable to sources within Arizona. "Control" means direct

Please keep this confirmation number as proof of payment.

or indirect ownership or control of 50 percent or more of the

Line 27 - Overpayment

voting stock of the DISC by the payor corporation.

If the taxpayer had an overpayment of tax on line 22, subtract

No addition is required if the DISC transactions comply with

the total of lines 23, 24, and 25 from line 22. Enter a positive

the IRC § 994 inter-company pricing provisions.

difference on line 27. This is the total overpayment. If the

Line A8 - Capital Investment by Certified Defense

difference is negative, enter the difference as a positive

number on line 26.

Contractor



Line 28 - Overpayment Applied to Estimated Tax

Federal Depreciation or Deduction for Cost of

Capital Investment

The taxpayer may apply part or all of an overpayment

reported on line 27 as a 2012 estimated tax payment. Enter

If the taxpayer was a certified defense contractor that

the applicable amount on line 28.

previously elected to amortize capital investments in

accordance with ARS § 43-1024, enter the amount of

Line 29 - Refund

IRC § 167 depreciation or IRC § 179 expense deducted

Subtract line 28 from line 27 and enter the difference. This is

in calculating federal taxable income that was not

the net refund amount.

already included on line A1. This adjustment must

Schedule A - Additions to Taxable Income

continue until the property is completely depreciated,

otherwise disposed of, or the taxpayer opts out of the

On lines A1 through A10 of Schedule A, enter all income

election. This adjustment should not be made for

taxable under Arizona law that is exempt for federal tax

property placed in service after the certification expired.

purposes. Also, enter all deductions allowed under federal



law that are not allowed under Arizona law.

Gain on Sale of Capital Investment

Line A1 - Total Federal Depreciation

Enter the amount of gain from the sale or other disposition

of a capital investment which a certified defense

Enter total amount of depreciation deducted on the federal return.

contractor elected to amortize pursuant to ARS § 43-1024.

Do not include depreciation included on line A8.

Line A2 - IRC § 179 Expense in Excess of Allowable

Line A9 - Additions Related to Arizona Tax Credits

Amount

Enter on line A9 the following additions to federal taxable

Enter the amount of IRC § 179 expense deducted on the

income that are related to Arizona tax credits. Attach a

federal return that exceeds $25,000.

schedule detailing these additions.

Line A3 - Taxes Based on Income

Environmental Technology Facility Credit



Enter the amount of taxes based on income paid to states

Excess Federal Depreciation or Amortization

(including Arizona), to foreign governments, or to their

Enter the excess of depreciation or amortization computed

political subdivisions included in federal taxable income.

on the federal basis of the facility over depreciation or

Line A4 - Interest on Obligations

amortization computed on the Arizona adjusted basis of

the facility. Make this adjustment for the facility for which

Enter the amount of federally tax exempt interest income on

the taxpayer claimed a tax credit under ARS § 43-1169.

obligations of any state or foreign government, or their political

subdivisions (except Arizona).

Arizona Form 120a Instruction - Arizona Corporation Income Tax Return (Short Form) - 2011 Page 7

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