Arizona Form 140py - Part-Year Resident Personal Income Tax Return

Arizona Form 140PY

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such expenses. If you are itemizing deductions on your

Retired or retainer pay of the uniformed services of the

Arizona return, you must exclude such expenses from the

United States

amount deducted.



Any other retirement system or plan established by

federal law

NOTE: Do not subtract interest earned on FNMA or GNMA

bonds since this interest is taxable by Arizona. For details, see

NOTE: This applies only to those retirement plans authorized

the department's income tax ruling, ITR 06-1.

and enacted into the U.S. Code. This does not apply to a

retirement plan that is only regulated by federal law (i.e., plans

Do not subtract any amount received from a qualified

which must meet certain federal criteria to be qualified plans).

pension plan that invests in U.S. Government obligations.

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The Arizona State Retirement System

Do not subtract any amount received from an IRA that

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invests in U.S. Government obligations. These amounts are

The Arizona State Retirement Plan

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not interest income. For more information, see the

The Corrections Officer Retirement Plan

department’s Income Tax Rulings ITR 96-2 and ITR 96-3.



The Public Safety Personnel Retirement System

Line D32 - Arizona Lottery Winnings

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The Elected Officials' Retirement Plan

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You may subtract up to $5,000 of winnings received in 2013

A retirement plan established for employees of a

for Arizona lottery prizes. Only subtract those Arizona

county, city, or town in Arizona

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lottery winnings that you included on line B15 in the

An optional retirement program established by the Arizona

ARIZONA column and reported on your federal income tax

Board of Regents under Arizona Revised Statutes

return.



An optional retirement plan established by an Arizona

community college district.

If you subtract Arizona lottery winnings here, you may have

to adjust the amount of gambling losses claimed as an

NOTE: Public retirement pensions from states other than

itemized deduction.

Arizona do not qualify for this subtraction.

Line D33 - U.S. Social Security Benefits or

Previously Reported Gain on Decedent's

Railroad Retirement Benefits

Installment Sale

Arizona does not tax social security benefits received under

Prior Arizona law required acceleration of any unrecognized

Title II of the Social Security Act. Arizona does not tax

installment sale gain upon the death of a taxpayer. However,

railroad retirement benefits received from the Railroad

this acceleration could have been avoided by the posting of a

Retirement Board under the Railroad Retirement Act. If you

bond. If acceleration was required, your federal adjusted

included such social security or railroad retirement benefits

gross income may include installment sale amounts already

on your federal return as income and also included this

recognized on a decedent's final Arizona return. Deduct that

amount in the ARIZONA column on line B15, subtract this

portion of the gain included on line B13, ARIZONA column.

income on line D33.

C. Deposits Made Into Your MSA

Subtract only the amount you reported as income on your federal

If you have an MSA, you may be able to subtract deposits

return and included on line B15 in the ARIZONA column.

made into that MSA. Make an entry here if all of the

See the department’s Income Tax Ruling ITR 96-1 for more

following apply.

information about railroad retirement benefits.

1. You have an MSA that qualifies as an MSA under

Line D34 - Adjustment for IRC § 179 Expense

Arizona law, but not federal law.

Not Allowed in Prior Years

2. Either you or your employer made deposits into that

If you made an addition for IRC § 179 expense on your 2009,

MSA during the tax year.

2010, 2011, and/or 2012 return, enter 20% of the amount

added for 2009, 2010, 2011 and/or 2012.

3. You had to include the deposits in income on your

federal income tax return.

Line D35 - Other Subtractions From Income

Enter the amount of the MSA deposits that you had to

Use line D35 if any of the following special circumstances

include in your federal adjusted gross income.

apply. Attach your own schedule, explaining any amounts

entered here.

Employer Contributions Made to Employee

A. Exclusion for U.S. Government, Arizona State,

MSAs

or Local Government Pensions

If you are an employer, you may subtract the amount

If you receive pension income from any of the sources listed

contributed to your employees' MSAs that are established

below, subtract the amount you received or $2,500,

under Arizona law. You can subtract these contributions

whichever is less. Include only the amount you reported as

only to the extent not deductible for federal income tax

income on your federal return and included on line B15 in

purposes. Enter these contributions here.

the ARIZONA column. If both you and your spouse receive

E. Agricultural Crops Given to Arizona Charitable

such pension income, each spouse may subtract the amount

Organizations

received or $2,500, whichever is less.

Public pensions from the following sources qualify

Arizona law allows a subtraction for qualified crop gifts made

for this subtraction.

during 2013 to one or more charitable organizations. To take

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this subtraction, all of the following must apply.

The United States Government Service Retirement and

Disability Fund

1. You must be engaged in the business of farming or



The United States Foreign Service Retirement and

processing agricultural crops.

Disability System

2. The crop must be grown in Arizona.

Arizona Form 140py - Part-Year Resident Personal Income Tax Return - 2013 Page 12

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