Arizona Form 120s - S Corporation Income Tax Return

Arizona Form 120S

C. Late Payment Penalty. The department imposes the late

Rounding Dollar Amounts

payment penalty on any amount shown as tax on a return that

Taxpayers must round amounts to the nearest whole dollar. If

is not paid by the date prescribed for its payment. “Amount of

50 cents or more, round up to the next dollar. If less than 50

tax shown on the return” is the amount of tax imposed shown

cents, round down.

on the return less the amount of any part of the tax paid on or

before the beginning of the month and the amount of any credit

Specific Instructions

against the tax which may be claimed on the return. The late

payment penalty is one-half of one percent (.005) of the unpaid

Type or print the required information in the name, address,

tax for each month or fraction of a month that the tax remains

and information boxes on the top of page 1.

unpaid, not to exceed 10 percent of the unpaid tax.

Indicate whether the taxable year is a calendar year or a fiscal

NOTE: If more than one of the penalties described in A, B, or

year; if a fiscal year, indicate the taxable year on the top of

C apply, the maximum combined penalty is 25 percent.

the return. Indicate whether this return is an original or an

amended return.

Refer to Arizona Corporate Income Tax Ruling CTR 09-1

Enter the S corporation's employer identification number (EIN).

regarding the application of penalties to returns filed under

Subsidiaries would enter the parent S corporation’s TIN.

extension.

All returns, statements, and other documents filed with the

D. Information Return Penalty. This form is an information

department require a taxpayer identification number (TIN).

return when no tax liability is due. The penalty for failing to file,

Taxpayers and paid preparers that fail to include their TIN

filing late (including extensions) or filing an incomplete

information return is $100 for each month, or fraction of a month,

may be subject to a penalty. Paid tax return preparers must

that the failure continues, up to a maximum penalty of $500.

include their TIN where requested. The TIN for a paid tax

return preparer is the individual's social security number or

E. Interest. The department assesses interest on any portion of

the employer identification number of their business.

the tax, whether determined by the department or the taxpayer,

not paid by the date prescribed for its payment. The department

If the taxpayer has a foreign address, enter the information in

applies interest, compounded annually, in the same manner and

the following order: city, province or state, and country.

at the same time as prescribed by IRC § 6621, except that the

Follow the country’s practice for entering the postal code. Do

Arizona rate of interest for both underpayments and

not abbreviate the country’s name.

overpayments for all taxpayers is the federal underpayment rate

Information question A: (Multistate S corporations only)

under IRC § 6621(a)(2). On January 1 of each year, the

check one box to indicate the apportionment formula used by

department adds any interest outstanding as of that date to the

the taxpayer. Air carriers must check the air carrier box and

principal amount of the tax. It is then a part of the principal

complete Schedule ACA. All non-air carrier taxpayers may

amount of the tax and accrues interest until paid.

choose between the standard sales factor formula or the

F. Underpayment of Estimated Tax Penalty. The

enhanced sales factor formula, and complete Schedule A. See

department imposes the underpayment of estimated tax

pages 8 and 9 of these instructions for more information.

penalty on any late payment or underpayment of a required

Information question G: Enter the total number of entity

installment of estimated tax. Refer to Form 220 for further

shareholders (exempt organizations, trusts, estates).

details. The penalty imposed is the penalty prescribed by

A.R.S. § 43-582, for the applicable period.

NOTE: The total of the amounts entered for information questions

E, F, and G should equal the total number of shareholders.

Furnishing Data

The department requests that S corporations attach a

Nonprofit Medical Marijuana Dispensary

copy of the federal return (along with all schedules and

Only a nonprofit medical marijuana dispensary (NMMD) under

attachments) to the Arizona return. A.R.S. § 42-1112

Arizona Revised Statutes Title 36, Chapter 28.1, should fill out

prescribes the schedules required to be included.

information question H. All other taxpayers should go to line 1.

Do not send in a blank Arizona return with a copy of the

Information question H: Check the box to indicate that the

federal return; the return will not process accurately. The

S corporation is a nonprofit medical marijuana dispensary

taxpayer must furnish complete data. Answer all questions on

and enter the registry identification number issued by the

the return. Complete all applicable schedules and attach all

Arizona Department of Health Services. Be sure to attach a

appropriate supplementary schedules.

copy of the dispensary’s federal return.

Records

Line 1 - Total Distributive Income (Loss)

Every S corporation should maintain books and records

Enter the net total of the pro rata share items of nonseparately

substantiating information reported on the return and keep

computed income (loss) and separately stated income (loss)

these documents for inspection. Refer to Arizona General

and deductions (from federal Form 1120-S, Schedule K).

Tax Ruling GTR 96-1 for more information about record

retention requirements.

NOTE for NMMDs: A nonprofit medical marijuana

dispensary should skip lines 2 through 25. Only fill out

IRC § 7519 Required Payments

line 26 (Information Return Penalty), if applicable. Complete

Taxpayers cannot deduct the federal required payments on

Schedule A (if a multistate NMMD) and Schedule B. Also

their Arizona tax returns as an ordinary and necessary

attach Schedule C, as directed on page 3 of Form 120S.

business expense or otherwise.

Arizona Form 120s - S Corporation Income Tax Return - 2013 Page 3

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