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Arizona Form 308-I

and received a Certificate, check the "Yes" box. Otherwise,

DO YOU HAVE TO MAKE OTHER ADJUSTMENTS TO ARIZONA

check the "No" box, and skip line 4 and line 5.

GROSS INCOME OR TO THE ARIZONA TAX CREDIT FOR

INCREASED RESEARCH ACTIVITIES

If you checked the “No” box for both line 1 and line 3, skip

 If you claim an Arizona credit for increased research

Part 4.

activities for the taxable year, Arizona statutes do not

NOTE: By checking the “No” boxes for both line 1 and line 3,

require you to make an addition to Arizona gross income

you are indicating that you will not seek a refund for this

for the amount of qualified research expenses equal to the

taxable year, and instead will carry any excess credit forward.

amount of the allowable Arizona credit.

This election cannot be changed on an amended return.

 If you claim a reduced federal credit for increased

Line 4 -

research expenses and claim the Arizona credit for

increased research activities, Arizona statutes do not

If you checked the "Yes" box on line 3, enter the name and

require you to reduce the Arizona credit for increased

taxpayer identification number of the entity that received the

research activities in a manner similar to the federal

Certificate from Commerce on line 4.

reduction method.

Line 5 -

 If you reduce the amount of the deduction for qualified

If you checked the "Yes" box on line 3, enter your share of

research activities in the computation of federal adjusted

the maximum refund amount for taxable year 2014.

gross income, Arizona statutes do not allow you to take a

Shareholders of an S corporation, enter the amount from

subtraction from Arizona gross income for the amount of

Form 308, Part 4, line 34 or line 35. Partners of a partnership,

the expense reduction.

enter the amount from Form 308, Part 5, line 39 or line 40.

 If you adjust the federal asset basis of capitalized research

Part 2 - Current Taxable Year's Credit

expenses and reduce the amount of amortization

Calculation (Sole Proprietorships Only)

deductible in the computation of federal adjusted gross

income, Arizona statutes do not allow you to take a

NOTE: Complete this part only if you operate a business

subtraction from Arizona gross income for additional

as a sole proprietorship and your sole proprietorship

amortization.

incurred qualified research expenses during the taxable

year. If you received your credit as the result of a pass

Specific Instructions

through, go to Part 3.

Complete the name and social security number section at

Line 6 -

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

Enter total wages paid or incurred for qualified services

taxable year. Include the completed form with the tax

performed in Arizona. Do not include the amount of such

return.

wages paid to employees that were used in the calculation of

All returns, statements, and other documents filed with the

the federal work opportunity credit. Wages include any

department require a taxpayer identification number (TIN).

wages paid or incurred to an employee for qualified services

The TIN for an individual is the taxpayer’s social security

performed by such employee. Qualified services consist of

number or an Internal Revenue Service individual taxpayer

engaging in qualified research or engaging in the direct

identification number. Taxpayers that fail to include their

supervision or direct support of research activities that

TIN may be subject to a penalty.

constitute qualified research.

Part 1 - Qualification for Refund of Current

Line 7 -

Taxable Year's Excess Credit

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

conduct of qualified research in Arizona. Supplies include

Line 1 -

expenditures for any tangible property other than land or

If your sole proprietorship applied to Commerce and received

improvements to land, and property of a character subject to

a Certificate related to the credit for increased research

the allowance for depreciation.

activities, check the "Yes" box. Otherwise, check the "No"

Line 8 -

box, and skip line 2.

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

Line 2 -

use computers in the conduct of qualified research in

If you checked the "Yes" box on line 1, enter the maximum

Arizona.

refund amount for taxable year 2014 on your Certificate from

Line 9 -

Commerce.

Enter the total of:

Line 3 -

(a) Seventy-five percent (.75) of any amount paid or incurred

If the entity from which you are claiming a pass through

for qualified research performed in Arizona by a qualified

credit for increased research activities applied to Commerce

research consortium on your sole proprietorship’s behalf.

Instructions For Arizona Form 308-I - Credit For Increased Research Activities - Individuals - 2014 Page 2

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