Arizona Form 140py - Part-Year Resident Personal Income Tax Return - 2013 Page 8
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29Arizona Form 140PY
1. You withdrew money from your MSA during 2013,
Part C - Additions to Income
while either a resident or a nonresident.
Line C21 - Reserved
2. You did not use the amount withdrawn to pay qualified
This line has been reserved for future use. Do not enter any
medical expenses.
amount on line C21.
3. You did not have to include the withdrawal as income
Line C22 - Total Depreciation Included in
on your federal income tax return.
Arizona Gross Income
Enter the amount withdrawn.
Enter the amount of depreciation deducted on the federal
If you had an MSA during the part of the year you were an
return that is included in Arizona gross income. If you make
Arizona nonresident, you must make an entry here if all of
an entry here, also see the instructions for line D35, “Other
the following apply.
Subtractions From Income.”
1. You had Arizona source income while an Arizona
Line C23 - Other Additions to Income
nonresident.
Use line C23 if any of the special circumstances below
2. Your MSA qualified as an MSA under Arizona law.
apply. Attach your own schedule, explaining any amounts
3. If you were an employee, your high deductible health
entered on line C23.
coverage was provided by your Arizona employer. If
A. Non-Arizona Municipal Interest
you were self employed, your high deductible health
Enter interest income earned from non-Arizona municipal
coverage was provided by your Arizona business.
bonds while an Arizona resident.
4. You withdrew money from your MSA during 2013,
NOTE: You may reduce this addition by any interest or other
while either a resident or a nonresident.
related expenses incurred to purchase or carry the obligation.
5. You did not use the amount withdrawn to pay qualified
As a part-year resident, you may reduce the addition by the
medical expenses.
amount of those expenses attributable to income subject to
6. You did not have to include the withdrawal as income
Arizona tax. You may reduce the addition by those expenses
on your federal income tax return.
that you could not deduct on your federal return.
Enter the amount withdrawn.
B.
Ordinary
Income
Portion
of
Lump
Sum
2 - Deceased Account Holder Where the Named
Distribution Excluded on Your Federal Return
Beneficiary Is Not the Decedent's Surviving
Arizona law does not provide for averaging. Enter the
Spouse
amount of the distributions received while an Arizona
You must make an entry here if all of the following apply.
resident and treated as ordinary income on your federal
return. If you chose to treat the capital gain portion of the
1. The account holder died during the part of the year you
distributions as ordinary income, you must also include that
were an Arizona resident.
amount on line C23.
2. The decedent's MSA qualified as an MSA under
For more information, see Arizona Department of Revenue
Arizona law.
Income Tax Ruling, ITR 93-5.
3. You are the named beneficiary of the decedent's MSA.
C. Fiduciary Adjustment
4. You are not the decedent's surviving spouse.
A fiduciary uses Form 141AZ, Schedule K-1, to report to
5. You did not have to include the value of the MSA as
you your share of the fiduciary adjustment from the trust or
income on your federal income tax return.
estate. Line 3 of Form 141AZ, Schedule K-1, shows your
In this case, the MSA ceased to be an MSA. Enter the fair
share of the fiduciary adjustment from the estate or trust.
market value of the MSA as of the date of death, less the
Depending on your situation, you may either add (line C23)
amount of MSA funds used within one year of the date of
or subtract (line D35) this amount.
death, to pay the decedent's qualified medical expenses. You
If the amount reported on line 3 of your Arizona Form
can reduce the fair market value by only those expenses paid
141AZ, Schedule K-1, is a positive number, enter that portion
from the MSA. If you pay additional medical expenses for the
of line 3 that is allocable to estate or trust income taxable by
decedent from the MSA after you file, you may file an amended
Arizona as an addition. Enter the addition on line C23.
return to further reduce the fair market value of the MSA.
If the amount on line 3 of your Arizona Form 141AZ, Schedule
3 - Decedent's Final Return and No Named MSA
K-1, is a negative number, enter that portion of line 3 that is
Beneficiary
allocable to estate or trust income taxable by Arizona as a
Make an entry here if all of the following apply.
subtraction from income. Enter the subtraction on line D35.
1. The account holder died during the part of the year in
D. Medical Savings Account (MSA) Distributions
which he or she was an Arizona resident.
For information on Arizona's MSA provisions, see the
2. There is no named MSA beneficiary.
department's Medical Savings Account brochure, Pub 542.
3. This is the decedent's final return.
You must add amounts received from an MSA here if any of
4. The value of the MSA did not have to be included on
the following apply.
the decedent's final federal income tax return.
1 - You Withdrew Funds From Your MSA for Other
In this case, the MSA ceased to be an MSA. Enter the fair market
Than Qualified Expenses
value of the MSA as of the date of death. This rule applies in all
If you had an MSA during the part of the year you were an
cases in which there is no named beneficiary, even if the
Arizona resident, you must make an entry here if all of the
surviving spouse ultimately obtains the right to the MSA assets.
following apply.
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