Instructions For Form 345 - Arizona Credit For New Employment

Arizona Form 345

If the allowable tax credit exceeds the taxes otherwise due on

a schedule that lists ownership information including: name,

the claimant's income, or if there are no taxes due, the amount

address, TIN, and ownership percentage at the end of the tax

of the credit not used to offset taxes may be carried forward

year. Include the schedule immediately after Form 345, but

for not more than five taxable years as a credit against

before the Forms 345-1.

subsequent years' income tax liabilities.

Complete Forms 345-1 and 345-2 before completing the rest

Co-owners of a business, including partners in a partnership

of Form 345.

and shareholders of an S corporation, may each claim only

FORM 345-1

the pro rata share of the credit allowed based on the

ownership interest. The total of the credits allowed all such

Complete a Form 345-1 for each employee at the business

owners may not exceed the amount that would have been

location,

WHETHER OR NOT THE EMPLOYEE IS IN A QUALIFIED

allowed for a sole owner of the business.

EMPLOYMENT POSITION

The credit is available to an exempt organization that is

NOTE: A.R.S. § 41-1525(D)(1) provides for the information

subject to corporate income tax on unrelated business taxable

requested in the Form 345-1 to be submitted in a form

income (UBTI). The credit must result from the activities that

prescribed by Revenue and may include electronic media.

generate UBTI.

Revenue will accept a hard copy spreadsheet that contains all

the requested information or the information may be

Reporting requirements: Include a copy of the Certification

submitted on electronic media as a Microsoft Excel

received from Commerce stating that the taxpayer timely

spreadsheet on a CD-ROM or DVD. The chosen media must

complied with the reporting requirements for that agency and

be Microsoft Windows compatible.

indicating the number of positions certified for the taxable

year. A taxpayer must timely comply with the reporting

Regardless of the form, the information must be filed on or

requirements of both Revenue and Commerce in order to

before the due date of the tax return including any extensions.

claim the credit. Do not use the 2014 Forms 345 and 345-1 to

Taxpayers submitting the information on CD-ROM or DVD

claim the credit for new employment for prior taxable years.

should secure the CD-ROM or DVD in a hard case and

include it with the tax return. The Forms 345-1 submitted on

Aggregate summary: This is a single Form 345 that

CD-ROM or DVD are part of the income tax return and are

combines the results of multiple business locations in Arizona

subject to the sworn statement on the return that they are true

for which the taxpayer is claiming the credit for new

and correct to the best of the signer’s knowledge and belief.

employment. Taxpayers having multiple business locations

must first complete separate Forms 345, 345-1 and 345-2 for

The CD

- ROM or DVD should be labeled as Form 345-1 with

each business location. Then, complete the aggregate

the taxpayer’s name, employer identification number, and

summary Form 345. Do not complete aggregate summaries

taxable year.

of Forms 345-1 and 345-2.

Taxpayers may password protect the CD-ROM or DVD and

Taxpayers do

need to complete Part 1 - Business

NOT

email the password separately to MediaLibrarian@azdor.gov.

Information, of the aggregate summary Form 345.

Include “Form 345-1” in the subject line of the email. In the

body of the email, include the same information that is on the

Specific Instructions

CD-ROM or DVD label. Revenue will not return or copy

any media.

Complete the name and taxpayer identification number

CAUTION: The taxpayer substitutes the CD-ROM or DVD

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

at its own risk and understands that the information may need

the taxable year. Include the completed form and all

to be provided to Revenue again at a later date if it is not

supporting documentation with the tax return.

accessible by Revenue for any reason.

All returns, statements, and other documents filed with the

department require a taxpayer identification number (TIN).

NEW: For taxable years beginning from and after

The TIN for a corporation, an exempt organization with

December 31, 2013, if a full-time employee in a qualified

UBTI, an S corporation, or a partnership is the taxpayer's

employment position left during the second or third taxable

employer identification number. The TIN for an individual is

year that a credit for that position is being claimed, the

the taxpayer's social security number or an Internal Revenue

employee may be replaced with another new full-time

Service individual taxpayer identification number. Taxpayers

employee in the same employment position and the new

that fail to include their taxpayer identification number may

employee will be treated as being in their second or third full

be subject to a penalty.

year of continuous employment if (1) the total time the

Part 1 - Business Information

qualified employment position was vacant from the date the

position was originally filled to the end of the current tax year

Lines 1 through 3 -

totals 90 days or less, and (2) the new employee meets all of

On lines 1, 2, and 3, enter the name, address, and employer

the same requirements as the original employee was required

identification number of the business location.

to meet. However, only one credit can be claimed for one

employee for each qualified employment position, even if

Line 4a and Line 4b -

there was more than one replacement for the same position

Answer the questions on line 4a and line 4b. If the business is

during the taxable year. See the example on page 3.

an LLC, a partnership, or an S corporation, be sure to include

Instructions For Form 345 - Arizona Credit For New Employment - 2014 Page 2

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