Arizona Form 140py - Part-Year Resident Personal Income Tax Art-Year Resident Personal Income Tax - 2011 Page 12
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45Form 140PY
For more information, see Arizona Department of Revenue
2. The decedent's MSA qualified as an MSA under
Income Tax Ruling, ITR 93-5.
Arizona law.
3. You are the named beneficiary of the decedent's MSA.
C. Fiduciary Adjustment
A fiduciary uses Form 141AZ, Schedule K-1, to report to
4. You are not the decedent's surviving spouse.
you your share of the fiduciary adjustment from the trust or
5. You did not have to include the value of the MSA as
estate. Line 3 of Form 141AZ, Schedule K-1, shows your
income on your federal income tax return.
share of the fiduciary adjustment from the estate or trust.
In this case, the MSA ceases to be an MSA. Enter the fair
Depending on your situation, you may either add (line C23)
market value of the MSA as of the date of death, less the
or subtract (line D35) this amount.
amount of MSA funds used within one year of the date of
If the amount reported on line 3 of your Arizona Form
death, to pay the decedent's qualified medical expenses. You
141AZ, Schedule K-1, is a positive number, enter that portion
can reduce the fair market value by only those expenses paid
of line 3 that is allocable to estate or trust income taxable by
Arizona as an addition. Enter the addition on line C23.
from the MSA. If you pay additional medical expenses for the
decedent from the MSA after you file, you may file an
If the amount on line 3 of your Arizona Form 141AZ, Schedule
amended return to further reduce the fair market value of the
K-1, is a negative number, enter that portion of line 3 that is
MSA.
allocable to estate or trust income taxable by Arizona as a
subtraction from income. Enter the subtraction on line D35.
3 - Decedent's Final Return and No Named MSA
Beneficiary
D. Medical Savings Account (MSA) Distributions
For information on Arizona's MSA provisions, see the
Make an entry here if all of the following apply.
department's MSA brochure, Pub 542.
1. The account holder died during the part of the year in
You must add amounts received from an MSA here if any of
which he or she was an Arizona resident.
the following apply.
2. There is no named MSA beneficiary.
1 - You Withdrew Funds from Your MSA for Other
3. This is the decedent's final return.
than Qualified Expenses
4. The value of the MSA did not have to be included on
If you had an MSA during the part of the year you were an
the decedent's final federal income tax return.
Arizona resident, you must make an entry here if all of the
In this case, the MSA ceases to be an MSA. Enter the fair market
following apply.
value of the MSA as of the date of death. This rule applies in all
1. You withdrew money from your MSA during 2011,
cases in which there is no named beneficiary, even if the
while either a resident or a nonresident.
surviving spouse ultimately obtains the right to the MSA assets.
2. You did not use the amount withdrawn to pay qualified
NOTE: The following are not withdrawals. Do not enter
medical expenses.
any of the following:
3. You did not have to include the withdrawal as income
x
Amounts from the MSA used to pay qualified medical
on your federal income tax return.
expenses
Enter the amount withdrawn.
x
A qualified return of excess contributions
If you had an MSA during the part of the year you were an
x
A qualified rollover
Arizona nonresident, you must make an entry here if all of
x
The fair market value of an MSA received by a
the following apply.
surviving spouse who was the deceased account
1. You had Arizona source income while an Arizona
holder's named beneficiary
nonresident.
For more information about the above items, see the
2. Your MSA qualified as an MSA under Arizona law.
department's MSA brochure, Pub 542.
3. If you were an employee, your high deductible health
E. Pension Adjustments
coverage was provided by your Arizona employer. If
Depending on your situation, you may either add (line C23)
you were self employed, your high deductible health
or subtract (line D35) this amount.
coverage was provided by your Arizona business.
Use this adjustment if both of the following apply.
4. You withdrew money from your MSA during 2011,
while either a resident or a nonresident.
1. Arizona taxed your pension for years before 1979.
5. You did not use the amount withdrawn to pay qualified
2. You reported that pension on your federal return using
medical expenses.
the percentage exclusion method.
6. You did not have to include the withdrawal as income
Do not use this adjustment if either of the following applies.
on your federal income tax return.
1. You reported your pension income as fully taxable on
Enter the amount withdrawn.
your federal return.
2 - Deceased Account Holder Where the Named
2. You reported your pension income on your federal
Beneficiary is Not the Decedent's Surviving
return under the "three-year-rule".
Spouse
Use the following worksheet to figure the adjustment.
You must make an entry here if all of the following apply.
1. The account holder died during the part of the year you
were an Arizona resident.
8
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