1. Arizona Form
2000 Nonresident Personal Income Tax
140NR
Are You Subject to Tax in Arizona? following apply to you.
• You are an enrolled member of an
You are subject to Arizona income tax on
Indian tribe.
all income derived from Arizona sources.
• You live on the reservation
If you are in this state for a temporary
established for that tribe.
or transitory purpose or did not live in
• You earned all of your income on that
Arizona but received income from sources
reservation.
within Arizona during 2000, you are
subject to Arizona tax. Income from To find out more, see Arizona Department
Arizona sources includes wages, rental of Revenue Income Tax Ruling ITR 96-4.
income, business income, the sale of
Do You Have to File if you Are a
Arizona real estate, interest and
Non-Indian or Non-Enrolled Indian
dividends having a taxable or business
Married to an American Indian?
situs in this state, or any other income
from an Arizona source. You must file if you meet the Arizona
filing requirements. For details on
Do You Have to File?
how to figure what income to report,
Arizona Filing Requirements see Arizona Department of Revenue
These rules apply to all Arizona Income Tax Ruling ITR 96-4.
taxpayers.
Do You Have to File if You Are in
You must AND your OR your
The Military?
file if you gross Arizona
are: income is adjusted You must file if you meet the Arizona
at least: gross filing requirements.
income is
If you are an Arizona resident, you must
at least:
report all of your income, no matter
• Single $15,000 $5,500
where stationed. You must include your
• Married $15,000 $11,000
military pay. If you were an Arizona
filing
resident when you entered the service,
jointly
you remain an Arizona resident, no
• Married $15,000 $5,500
matter where stationed, until you
filing
establish a new domicile.
separate
If you are not an Arizona resident, but
ly
• Head of stationed in Arizona, the following
$15,000 $5,500
applies to you.
househol
d • You are not subject to Arizona income
If you are a nonresident, you must tax on your military pay.
report income derived from Arizona
• You must report any other income you
sources.
earn in Arizona. Use Form 140NR,
To see if you have to file, figure
Nonresident Personal Income Tax
your gross income the same as you
Return, to report this income.
would figure your gross income for
federal income tax purposes. Then To find out more, see Arizona Department
you should exclude income Arizona law of Revenue brochure, Pub 704, Taxpayers
does not tax. in the Military.
You can find your Arizona adjusted
If You Included Your Child's
gross income on line 20 of Arizona
Unearned Income on Your Federal
Form 140NR.
Return, Does Your Child Have to
NOTE: Even if you do not have to file, File an Arizona Return?
you must still file a return to get a
In this case, the child should not file
refund of any Arizona income tax
an Arizona return. The parent must
withheld.
include that same income in his or her
Do You Have to File if You Are an Arizona taxable income.
American Indian?
Residency Status
You must file if you meet the Arizona
filing requirements unless the If you are not sure if you are an
all

2. Form 140NR
Arizona resident for state income tax died in 2001 before filing a return for
purposes, you should get Arizona 2000, you may file a joint return. If
Department of Revenue Income Tax your spouse died in 2000, the joint
Procedure ITP 92-1. return should show your spouse's 2000
income before death, and your income for
Residents all of 2000. If your spouse died in
You are a resident of Arizona if your 2001, before filing the 2000 return, the
domicile is in Arizona. Domicile is the joint return should show all of your
place where you have your permanent home. income and all of your spouse's income
It is where you intend to return if you for 2000. Print quot;Filing as surviving
are living or working temporarily in spousequot; in the area where you sign the
another state or country. If you leave return. If someone else is the personal
Arizona for a temporary period, you are representative, he or she must also sign
still an Arizona resident while gone. A the return.
resident is subject to tax on all income
Are Any Other Returns Required?
no matter where the resident earns the
income. You may also have to file fiduciary
income tax or estate tax returns. For
If you are a full year resident, you
details about filing a fiduciary income
must file Form 140, Form 140A, or Form
tax return, call the department at (602)
140EZ.
255-3381. For details about filing an
Part-Year Residents estate tax return, call the department
at (602) 542-4643.
If you are a part-year resident, you
Claiming a Refund For a Deceased
must file Form 140PY, Part-Year Resident
Personal Income Tax Return. Taxpayer
You are a part-year resident if you did If you are claiming a refund, you must
either of the following during 2000. complete Form 131, Claim for Refund on
• Behalf of Deceased Taxpayer. Attach this
You moved into Arizona with the
form to the front of the return.
intent of becoming a resident.
• What Are the Filing Dates And
You moved out of Arizona with the
Penalties?
intent of giving up your Arizona
residency.
When Should You File?
Nonresidents
April 15, 2001 falls on a Sunday.
If you are a nonresident, you must file Therefore, your 2000 calendar year tax
Form 140NR, Nonresident Personal Income return is due no later than midnight,
Tax Return. April 16, 2001. File your return as soon
as you can after January 1, but no later
What if a Taxpayer Died?
than April 16, 2001.
If a taxpayer died before filing a
If you are a fiscal year filer, your
return for 2000, the taxpayer's spouse th
return is due on the 15 day of the
or personal representative may have to
fourth month following the close of your
file and sign a return for that
fiscal year.
taxpayer. If the deceased taxpayer did
not have to file a return but had tax What If You Cannot File On Time?
withheld, a return must be filed to get
You may request an extension if you know
a refund.
you will not be able to file on time.
The person who files the return should
NOTE: An extension does not extend the
use the form the taxpayer would have
time to pay your income tax. For
used. If the department mailed the
details, see the instructions for
taxpayer a booklet, do not use the
Arizona Form 204.
The person who files the return
label.
should print the word quot;deceasedquot; after To get a filing extension, you can
the decedent's name in the address either:
section of the form. Also enter the
1. Apply for a state extension (Form
date of death after the decedent's name.
204). To apply for a state extension,
If your spouse died in 2000 and you did file Arizona Form 204 by April 16.
not remarry in 2000, or if your spouse
2

3. Form 140NR
See Form 204 for details. You must extension to your return when you file.
attach a copy of the Arizona This penalty is one-half of one percent
extension to the front of your return (.005) of the tax not paid for each 30
when you file. If you must make a day period or fraction of a 30 day
payment, use Arizona Form 204. period. The department charges this
penalty from the original due date of
2. You may use your federal extension
the return until the date you pay the
(federal Form 4868 or 2688). File
tax. This penalty cannot exceed 25
your Arizona return by the same due
percent of the unpaid tax.
date. If you are filing under a
federal extension, you do not have to NOTE: If you are subject to two or more
attach a copy of your federal of the above penalties, the total cannot
extension to your return, but make exceed 25 percent.
sure that you check either box D or F
Interest
on page 1 of the return.
The department charges interest on any
When Should You File if You Are a
tax not paid by the due date. The
Nonresident Alien?
department will charge you interest even
You must file your Arizona tax return by if you have an extension. If you have
April 16, even though your federal an extension, the department will charge
income tax return is due on June 15. If you interest from the original due date
you want to file your Arizona return until the date you pay the tax. The
when you file your federal return, you Arizona rate of interest is the same as
may ask for an extension. See Form 204 the federal rate.
for extension filing details.
When Should You Amend a Return?
What if You File or Pay Late?
If you need to make changes to your
If you file or pay late, the department return once you have filed, you should
can charge you interest and penalties on file Form 140X, Individual Amended
the amount you owe. If the U.S. Post Return. Do not file a new return for
Office postmarks your 2000 calendar year the year you are correcting. Generally,
return by April 16, 2001, your return you have four years to amend a return to
will not be late. You may also use claim a refund.
certain private delivery services
If the Internal Revenue Service makes a
designated by the IRS to meet the
change to your federal taxable income
“ timely mailing as timely filed” rule.
for any year, you must file a Form 140X
Late Filing Penalty for that year. In this case, you must
amend your Arizona return within 90 days
If you file late, the department can
of the change. Attach a complete copy
charge you a late filing penalty. This
of the federal notice to your Form 140X.
penalty is 5 percent of the tax found to
be remaining due for each month or If you amend your federal return for any
fraction of a month the return is late. year, you must also file an Arizona Form
This penalty cannot exceed 25 percent of 140X for that year. You must file the Form
the tax found to be remaining due. 140X within 90 days of amending your
federal return.
Late Payment Penalty
Do You Need to Make Estimated
If you pay your tax late, the department
Payments in 2001?
can charge you a late payment penalty.
This penalty is 10 percent of the tax You must make Arizona estimated income
not paid on time. tax payments during 2001 if either of
the following apply.
Extension Underpayment Penalty
1. You reasonably expect your Arizona
If you file your return under an
gross income will exceed $75,000 in
extension, you must pay 90 percent of
2001.
the tax shown on your return by the
return's original due date. If you do 2. Your Arizona gross income in 2000
not pay this amount, the department can was greater than $75,000.
charge you a penalty. The department
As a nonresident, your Arizona gross
can also charge you this penalty if you
income is that part of your federal
do not attach a copy of the Arizona
3

4. Form 140NR
adjusted gross income derived from
Entering Your Name, Address, and
Arizona sources.
Social Security Number (SSN)
Make sure you use ordinary business care
and prudence when you project your Lines 1, 2, and 3 -
income for 2001.
NOTE: Make sure that you write your
NOTE: Arizona's community property laws social security number on the
may have an effect on whether you have appropriate line.
to make estimated payments. For
details, see Arizona Department of If your booklet has a peel-off label,
Revenue Income Tax Ruling ITR 92-1. use that label if all the information is
correct. If any of the information on
What if You Make Your Estimated the label is incorrect, do not use the
Payments Late? Attach the label after you
label.
finish your return. If you do not have
The department will charge you a penalty
a peel-off label, print or type your
if you fail to make any required
name, address, and SSN in the space
payments. The department will charge you
provided. If you are a nonresident of
a penalty if you make any of your
the United States or a resident alien
required payments late. The department
who does not have an SSN use the
will also charge you interest on any
identification number (ITIN) the IRS
late or underpaid estimated tax payment.
issued to you.
For details, see Arizona Form 221.
If you are filing a joint return, enter
Can You Make Estimated Payments if your SSNs in the same order as your
You Do Not Have to? names. If your name appears first on
the return, make sure your SSN is the
If you do not have to make Arizona
first number listed.
estimated income tax payments, you may
still choose to make them.
If you and your spouse have
NOTE:
For details, see Arizona Forms 140ES and different last names, do not use the
221. label. Write your last names on the
lines provided. The department will now
Line-by-Line Instructions issue refunds under both last names
listed on the return.
Tips for Preparing Your Return:
• For a deceased taxpayer, see page 1 of
Make sure that you write your social
these instructions.
security number on your return.
• Complete your return using black ink. Use your current home address. The
• department will send your refund or
You must round dollar amounts to the
correspond with you at that address.
nearest whole dollar. If 50 cents or
more, round up to the next dollar. If
NOTE: Make sure your SSN is correct. If
less than 50 cents, round down.
you are filing a joint return, also make
• sure you list your SSNs in the same
When asked to provide your own
order every year.
schedule, attach a separate sheet
with your name and SSN at the top. Make sure that every return, statement,
Attach your own schedules to the back or document that you file with the
of your return. department has your SSN. Make sure that
all SSNs are clear and correct. You may
• You must complete your federal return be subject to a penalty if you fail to
before you can start your Arizona include your SSN. It may take longer to
return. process your return if SSNs are missing,
incorrect, or unclear.
• Make sure you include your home
telephone number. If your daytime Identification Numbers for Paid
number is not the same as your home Preparers
number, make sure you include a
If you pay someone else to prepare your
daytime number.
return, that person must also include an
• If filing a fiscal year return, fill identification number where requested.
in the period covered in the space
A paid preparer may use any of the
provided at the top of the form.
4

5. Form 140NR
following. spouse's name in the space provided.
Also enter your spouse's SSN in the
• his or her SSN
space provided.
• his or her PTIN
If you are filing a separate return and
• the federal employer identification your spouse is an Arizona resident, you
number for the business
must figure how much income to report
A paid preparer who fails to include the using community property laws. Under
proper numbers may also be subject to a these laws, a separate return must
penalty. reflect one-half of the community income
taxable to Arizona plus any separate
Determining Your Filing Status income taxable to Arizona. For details,
see Arizona Department of Revenue Income
The filing status that you use on your
Tax Ruling ITR 93-20.
Arizona return may be different from
that used on your federal return. NOTE: If you can treat community income
as separate income on your federal
Use this section to determine your
return, you may also treat that
filing status. Check the correct box (4
community income as separate on your
through 7) on the front of Form 140NR.
Arizona return. See Arizona Department
Line 4 Box - Married Filing a of Revenue Ruling ITR 93-22.
Joint Return
Line 7 Box - Single
You may use this filing status if
married as of December 31, 2000. It Use this filing status if you were
does not matter whether or not you were single on December 31, 2000. You are
living with your spouse. You may elect single if any of the following apply to
to file a joint return, even if you and you.
your spouse filed separate federal
• You have never been married.
returns.
• You are legally separated under a
You may use this filing status if your decree of divorce or of separate
spouse died during 2000 and you did not maintenance.
remarry in 2000. See page 2 of these • You were widowed before January 1,
instructions for details. 2000, and you did not remarry in
If you are married to an Arizona full 2000, and you do not qualify to file
year resident, you may file a joint as a qualifying widow or widower with
return using the 140NR. For more dependent children on your federal
information, see Arizona Department of return.
Revenue Income Tax Ruling ITR 95-2.
Exemptions
Line 5 Box - Head of Household
Write the number of exemptions you are
You may file as head of household on
claiming in boxes 8, 9, and 10. Do not
your Arizona return, only if one of the
put a checkmark. You may lose the
following applies.
exemption if you put a checkmark in
• You qualify to file as head of these boxes. You may lose the dependent
household on your federal return. exemption if you do not complete Part A
• on page 2.
You qualify to file as a qualifying
widow or widower on your federal Line 8 Box - Age 65 or Over
return.
Write quot;1quot; in box 8 if you or your spouse
Line 6 Box - Married Filing were 65 or older in 2000. Write quot;2quot; in
Separately box 8 if both you and your spouse were
65 or older in 2000.
You may use this filing status if
married as of December 31, 2000, and you Line 9 Box - Blind
elect to file a separate Arizona return.
You may elect to file a separate return, Write quot;1quot; in box 9 if you or your spouse
even if you and your spouse filed a are totally or legally blind. Write quot;2quot;
joint federal return. in box 9 if both you and your spouse are
totally or legally blind. To qualify as
If you are filing a separate return,
legally blind, you must attach a
check the line 6 box and enter your
5

6. Form 140NR
physician's letter stating one of the
Reporting Your Residency Status
following.
1. Your vision is 20/200 or poorer with Check the appropriate box (11 through
corrective lenses. 13). Check only one box.
2. Your field of vision is 20 degrees or Line 11 Box - Nonresident
less.
Check box 11 if you were not an Arizona
Line 10 Box - Dependents resident during 2000 and were not on
active military duty in Arizona.
You must complete Part A on page 2 of
your return before you can total your Line 12 Box - Nonresident Active
dependent exemptions. Military
You may claim only the following as a Check box 12 if you were a nonresident
dependent. on active duty military assignment in
• Arizona in 2000.
A person that qualifies as your
dependent on your federal return. Line 13 Box - Composite Return
• A person who is age 65 or over Check box 13 if this is a composite
(related to you or not) that does not return being filed by one of the
qualify as your dependent on your following.
federal return, but one of the
1. A partnership filing on behalf of its
following applies.
nonresident partners.
1. In 2000, you paid more than one-
fourth of the cost of keeping this 2. An S corporation filing on behalf of
person in an Arizona nursing care its nonresident shareholders.
institution, an Arizona residential
For information on filing an Arizona
care institution, or an Arizona
nonresident composite income tax return,
assisted living facility. Your cost
must be more than $800. see Arizona Department of Revenue Income
Tax Ruling ITR 97-1.
2. In 2000, you paid more than $800 for
either Arizona home health care or Determining Arizona Income
other medical costs for the person.
Now complete Parts B, C, and D on page 2
Completing Line(s) A1
of the return.
Enter the following on line(s) A1.
Use Part B to determine what portion of
your total income is taxable by Arizona.
1. The dependent's name.
2. The dependent's social security NOTE: If you are unable to determine the
number. proper line to use, please contact one
of the help numbers listed on the back
3. The dependent's relationship to you.
cover.
4. The number of months the dependent
FEDERAL Column
lived in your home during 2000.
You may lose the exemption if you do not Enter the actual amounts shown on your
furnish this information. 2000 federal income tax return in the
FEDERAL column. Complete lines B4
Line A2 - Total Dependents
through B14. Line B14 should equal the
Enter the total number of persons listed federal adjusted gross income shown on
on line(s) A1. Enter the same number your 2000 federal return Form 1040, Form
onto the front of the return in box 10. 1040A, or Form 1040EZ.
Line A3 - Persons You Cannot Take ARIZONA Column
as Dependents on Your Federal
Enter that portion of your federal
Return
income received from Arizona sources in
Enter the names of any dependents age 65 the ARIZONA column. Such income includes
or over listed on line(s) A1 that you wages earned in Arizona, Arizona rental
cannot take as a dependent on your and business income, and gains on the
federal return.
6

7. Form 140NR
Line B7 - Arizona Income Tax
sale of Arizona property.
Refunds
NOTE: If you are filing a joint return
with your full year resident spouse, you Enter the amount of Arizona income tax
must enter your Arizona source income in refunds received in 2000 that you
the ARIZONA column and your spouse must included in your federal adjusted gross
enter all income from all sources in the income.
ARIZONA column. For details, see
Line B8 - Business Income or
Arizona Department of Revenue Income Tax
(Loss)
Ruling ITR 95-2.
Enter income or (loss) from Arizona
The Tax Reform Act of 1986 limits the
businesses.
amount of losses that you may deduct
from passive activities. A passive Line B9 - Gains or (Losses)
activity is one that involves the
Enter gains or (losses) on sales of
conduct of any trade or business in
Arizona property.
which the taxpayer does not materially
participate. Line B10 - Rents, etc.
As a nonresident, your Arizona gross Enter rent or royalty income earned on
income may include some of these losses. Arizona properties. Enter income from
You may consider only those passive Schedule K-1(NR) from estates or trusts
losses that arose from Arizona sources. (Form 141). Also enter income or (loss)
Your 2000 Arizona gross income can from Schedule(s) K-1(NR) from Arizona
include only Arizona source losses you partnerships (Form 165), or small
used on your 2000 federal return. business corporations (Form 120S).
The following line-by-line instructions
Line B11 - Other Income Reported
apply to the ARIZONA column.
on Your Federal Return
Line B4 - Wages, Salaries, Tips, Enter other income from sources within
etc. Arizona. Do not include pension income
or social security taxed by the federal
Enter all amounts received for services
government.
performed in Arizona.
Net Operating Losses
Do not include active military
NOTE:
pay. Arizona does not have specific net
operating loss provisions for individual
Line B5 - Interest taxpayers. Arizona conforms to the
federal net operating loss provisions,
If you have an Arizona business, enter
including the carryback provisions.
only interest (including U.S. Government
interest) you earned on accounts pledged As an Arizona nonresident, you may have
as collateral. Also enter your had a loss from prior year Arizona
distributive share of interest from a business operations. However, the loss
partnership doing business in Arizona or cannot offset this year’s income unless
an S corporation doing business in the loss is a net operating loss for
Arizona. Do not include any other federal purposes. You can include the
interest income even if it was earned in loss deduction in your Arizona gross
Arizona banks. income only to the extent included in
your federal adjusted gross income. You
Line B6 - Dividends
cannot include any amount of that net
If you have an Arizona business, enter operating loss that has already been
only those dividends earned on stocks deducted for Arizona purposes.
pledged as collateral, including
Enter the amount of net operating loss
dividends from small business
deduction included in your federal
corporations. Also enter your
adjusted gross income that was derived
distributive share of dividend income
from Arizona sources. Do not include
from a partnership doing business in
any amount of the loss that has already
Arizona or an S corporation doing
been deducted for Arizona purposes.
business in Arizona. Do not include any
Also, do not include any loss for which
other dividend income.
you took a separate subtraction on an
7

8. Form 140NR
amended return filed for a prior tax 4. You did not include these
year under the special net operating contributions in your federal
loss transition rule. adjusted gross income this year.
If you meet all these tests, you must
For information on deducting a net
report as income those contributions
operating loss carryback, see Arizona
previously deducted on your prior year
Department of Revenue Income Tax
Arizona tax returns.
Procedure ITP 99-1.
For more information, see Arizona
Line B12 - Total Income
Department of Revenue Income Tax Ruling
Add lines B4 through B11 and enter the ITR 93-7.
total.
Line C18 - Other Additions to
Line B13 - Other Federal Income
Adjustments
Use line C18 if any of the special
Include on line B13 any other federal circumstances below applies. Attach your
adjustments included in your federal own schedule to the back of your return,
adjusted gross income that are explaining any amounts entered on line
attributable to the Arizona source C18.
income reported on your 2000 Arizona
A. Trust and Estate Deductions
nonresident return.
You must add the following estate or
Line B15 - Arizona Income trust deductions to your Arizona gross
income.
Complete line B15 as instructed on the
form. 1. Your share of the estate’s or trust’s
deductions allowed under the Internal
Line B16 - Arizona Percentage
Revenue Code.
Divide line B15 by line B14 and enter
2. Your share of the excess deductions
the result. (Do not enter more than 100
and loss carryovers allowed under the
percent.) This is the Arizona percentage
Internal Revenue Code as deductions
of your total income.
to the beneficiary on termination of
an estate or trust.
Example:
Arizona Federal Arizona You must add the above deductions and
Gross Adjusted percentage loss carryovers to Arizona gross income
Income Gross only to the extent you included these
from line Income items in computing your Arizona taxable
B15 from line income.
B14
B. Agricultural Water Conservation
$ 7,500 $ 30,000 $7,500/30,000=
Expenses
25%
Determining Additions to Income If you take this credit, you cannot
deduct any expenses for which you claim
Line C17 - Early Withdrawal of the credit. If you take this credit,
Arizona, County, City, or School enter the amount of such expenses that
Retirement System Contributions you deducted on your federal return.
If you meet all the following, you must C. Items Previously Deducted for Arizona
enter an amount here. Purposes
1. You left your job with the State of Arizona statutes prohibit a taxpayer
Arizona or an Arizona county, city, from deducting items more than once.
or school district for reasons other However, under the operation of former
than retirement. Arizona law (1989 and prior), you could
deduct certain items in greater amounts
2. When you left, you took out the
for Arizona purposes than federal
contributions you had made to the
purposes. Investment interest and
retirement system while employed.
passive activity losses were such items.
3. You deducted these contributions on In some cases, you could have deducted
your Arizona income tax returns that such amounts in their entirety on the
you filed in prior years. Arizona return. For federal purposes,
8

9. Form 140NR
the deduction for these items was your 2000 Arizona taxable income.
limited, with the unused portions being
5. The amount of the loss carryover
carried forward and deducted in future
included in your Arizona gross income
years. Your Arizona return may include
is more than the amount allowed to be
these previously deducted items because
taken into account for Arizona
of the difference between the federal
purposes.
and former Arizona treatment. If your
Enter the amount by which the loss
Arizona taxable income includes items
carryover included in your Arizona gross
previously deducted for Arizona
income is more than the amount allowed
purposes, you must add such amounts to
for the taxable year under Arizona law.
your Arizona gross income.
F. Addition to S Corporation Income Due
D. Claim of Right Adjustment for Amounts
to Credits Claimed
Repaid in 2000
Shareholders of an S corporation who
You must make an entry here if all of
claim a credit passed through from an S
the following apply.
corporation must make an addition to
1. During 2000, you were required to
income for the amount of expenses
repay amounts held under a claim of
disallowed by reason of claiming the
right.
credit.
2. The amount required to be repaid was
An S corporation that passes the
subject to Arizona income tax in the
following credits through to its
year included in income.
shareholders must notify each
3. The amount required to be repaid shareholder of his or her pro rata share
during 2000 was more than $3,000. of the adjustment. You must enter an
amount on this line when claiming any of
4. You took a deduction for the amount
the following credits.
repaid on your 2000 federal income
•
tax return. Agricultural water conservation
credit
5. The deduction taken on your federal
• Defense contracting credit
income tax return is reflected in
• Environmental technology facility
your Arizona taxable income.
credit
•
If the above apply, enter the amount Pollution control credit
•
deducted on your federal income tax Recycling equipment credit
•
return which is reflected in your Credit for solar hot water heater
Arizona taxable income. plumbing stub outs and electric
vehicle recharge outlets
For more information on the Arizona
• Credit for employment of TANF
claim of right provisions, see Arizona
recipients
Department of Revenue Individual Income
• Credit for agricultural pollution
Tax Procedure ITP 95-1.
control equipment
E. Claim of Right Adjustment for Amounts
G. Solar Hot Water Heater Plumbing Stub
Repaid in Prior Taxable Years Out And Electric Vehicle Recharge Outlet
Expenses
You must make an entry here if all of
the following apply. If you take a credit for installing
solar hot water heater plumbing stub
1. During a year prior to 2000 you were
outs or electric vehicle recharge
required to repay income held under a
outlets in a dwelling you constructed,
claim of right.
you cannot deduct any expenses for which
2. You computed your tax for that prior you claim the credit. If you take this
year under Arizona’s claim of right credit, enter the amount of such
provisions. expenses that you deducted on your
federal return.
3. A net operating loss or capital loss
was established due to the repayment H. Wage Expense for Employers of TANF
made in the prior year. Recipients
4. You are entitled to take that net If you take a credit for employing TANF
operating loss or capital loss recipients, you cannot deduct any wage
carryover into account when computing expense for which you claim the credit.
9

10. Form 140NR
If you take this credit, enter the 6. You did not have to include the value
amount of such expenses that you of the MSA as income on your federal
deducted on your federal return. income tax return.
In this case, the MSA ceased to be an
I. Medical Savings Account (MSA)
MSA. Enter the fair market value of the
Distributions
MSA as of the date of death, less the
For information on Arizona's MSA
amount of MSA funds used within one year
provisions, see the department's MSA
of the date of death, to pay the
brochure, Pub 542.
decedent's qualified medical expenses.
You must add amounts received from an If the MSA has not paid all of the
MSA here if any of the following apply. decedent's medical expenses by the time
you file this return, reduce the fair
1 - You Withdrew Funds From Your MSA For
market value by only those expenses the
Other Than Qualified Expenses
MSA paid. If the MSA pays additional
You must make an entry here if all of expenses for the decedent after you
the following apply. file, you may file an amended return to
further reduce the fair market value of
1. You have an MSA that qualifies as an
the MSA.
MSA under Arizona law.
2. If you are an employee, your high 3 - Decedent's Final Return and no Named
deductible health coverage is MSA Beneficiary
provided by your Arizona employer.
Make an entry here if all of the
If you are self employed, your high
following apply.
deductible health coverage is
provided by your Arizona business. 1. The account holder died during the
year.
3. You withdrew money from your MSA
during 2000.
2. The account holder's MSA qualified as
4. You did not use the amount withdrawn an MSA under Arizona law.
to pay qualified medical expenses.
3. If the account holder was an
5. You did not have to include the employee, the account holder's high
withdrawal as income on your federal deductible health coverage was
income tax return. provided by his or her Arizona
employer. If the account holder was
Enter the amount withdrawn.
self employed, the account holder's
2 - Deceased Account Holder Where The high deductible health coverage was
Named Beneficiary is Not the Decedent's provided by his or her Arizona
Surviving Spouse business.
You must make an entry here if all of 4. There is no named MSA beneficiary.
the following apply:
5. This is the decedent's final return.
1. The account holder died during the
6. The value of the MSA did not have to
year.
be included on the decedent's final
2. The account holder's MSA qualified as federal income tax return.
an MSA under Arizona law.
In this case, the MSA ceases to be an
3. If the account holder was an MSA. Enter the fair market value of the
employee, the account holder's high MSA as of the date of death. This rule
deductible health coverage was applies in all cases in which there is
provided by his or her Arizona no named beneficiary, even if the
employer. If the account holder was surviving spouse ultimately obtains the
self employed, the account holder's right to the MSA assets.
high deductible health coverage was
provided by his or her Arizona NOTE: The following are not withdrawals.
business. Do not enter any of the following:
• Amounts from the MSA used to pay
4. You are the named beneficiary of the
qualified medical expenses
decedent's MSA.
• A qualified return of excess
5. You are not the decedent's surviving contributions
spouse. • A qualified rollover
10

11. Form 140NR
• Without such authority you cannot take a
The fair market value of an MSA
subtraction. If you have any questions
received by a surviving spouse who
concerning subtractions from income,
was the deceased account holder's
call one of the numbers listed on the
named beneficiary
back cover.
For more information about the above
items, see the department's MSA NOTE: You may not subtract any amount
brochure, Pub 542. which is allocable to income excluded
from your Arizona income.
J. Other Adjustments
D20 - Exemption: Age 65 or Over
Other special adjustments may be
necessary. You may need to make an
Multiply the number in box 8 on the
addition for depreciation or
front of your return by $2,100 and enter
amortization. You may also need to make
the result.
an addition if you claimed certain tax
credits. Call one of the numbers listed Line D21 - Exemption: Blind
on the back cover if any of the
Multiply the number in box 9 on the
following apply.
front of your return by $1,500 and enter
• You are a qualified defense the result.
contractor that elected to amortize
Line D22 - Exemption: Dependents
under Arizona Revised Statutes
section 43-1024. Multiply the number in box 10 on the
• front of your return by $2,300 and enter
You sold or disposed of property that
the result.
was held for the production of income
and your basis was computed under the Line D23 - Total
Arizona Income Tax Act of 1954.
Add lines D20 through D22 and enter the
• You are still depreciating or total.
amortizing a child care facility for
Line D24 - Prorated Exemptions
which you claimed a state credit.
Multiply the amount on line D23 by your
• You claimed the environmental
Arizona percentage from line B16 and
technology facility credit.
enter the result.
• You claimed the pollution control
NOTE Active Duty Military Personnel
credit.
Only: If you were on active duty in
• You claimed the recycling equipment Arizona during 2000, but you were a
credit. resident of another state, you must
prorate these exemptions.
• You claimed the credit for
agricultural pollution control Line D25 - Interest on U.S.
equipment. Obligations
• You elected to amortize the basis of Enter the amount of interest income from
a pollution control device or the U.S. Government obligations included as
cost of a child care facility under income on line B5 in the ARIZONA column.
Arizona law in effect before 1990. U.S. Government obligations include
You are still deducting amortization obligations such as savings bonds and
or depreciation for that device or treasury bills. You must reduce this
facility on your federal income tax subtraction by any interest or other
return. related expenses incurred to purchase or
carry the obligation. Reduce the
Line C19 - Total Additions
subtraction only by the amount of such
Add lines C17 and C18. Enter the total expenses included in your Arizona gross
on line C19 and on the front of your income.
return, line 16.
Line D26 - Arizona Lottery
Winnings
Determining Subtractions From
Income You may subtract all winnings received
in 2000 related to an Arizona lottery
You may only subtract those items for
prize won before March 22, 1983. You may
which statutory authority exists.
11

12. Form 140NR
subtract up to $5,000 of winnings A. Certain Wages of American Indians
received in 2000 for Arizona lottery
Enrolled members of American Indian
prizes won after March 21, 1983. Only
tribes may subtract wages earned while
subtract those Arizona lottery winnings
living and working on their tribe’s
that you included on line B11 in the
reservation. You can subtract only those
ARIZONA column and reported on your
amounts that you included on line B4,
federal income tax return.
ARIZONA column. The federal government
If you subtract Arizona lottery winnings must recognize these tribes.
here, you may have to adjust the amount
For more information, see Arizona
of gambling losses claimed as an
Department of Revenue Income Tax Ruling
itemized deduction.
ITR 96-4.
Line D27 - Alternative Fuel
B. Adoption Expenses
Vehicles and Refueling Equipment
You may take this subtraction only in
Starting with the 1999 taxable year, the the year the final adoption order is
alternative fuel subtraction is granted.
repealed. Therefore, you may not take a
Enter the lesser of the total of the
subtraction for alternative fuel
following adoption expenses or $3,000.
vehicles purchased or converted during
2000. You may not take a subtraction When figuring your subtraction, you may
for refueling equipment purchased during include expenses incurred in prior
2000. However, if you were entitled to a years.
subtraction for refueling equipment or
The following expenses are qualified
vehicles purchased or converted during
adoption expenses.
1998, you may still take one-third of
the subtraction that is allocable to 1. Nonreimbursed medical and hospital
2000. costs.
To figure your subtraction complete Part 2. Adoption counseling.
I of Form 313. Enter the amount from
3. Legal and agency fees.
Form 313, Part I, line 3, here.
4. Other nonrecurring costs of adoption.
Line D28 - Agricultural Crops
If filing separately, you may take the
Given to Arizona Charitable
entire subtraction, or you may divide
Organizations
the subtraction with your spouse.
Arizona law allows a subtraction for However, the total subtraction taken by
qualified crop gifts made during 2000 to both you and your spouse cannot exceed
one or more charitable organizations. To $3,000.
take this subtraction, you must be
C. Qualified Wood Stove, Wood Fireplace,
engaged in the business of farming or
or Gas Fired Fireplace
processing agricultural crops. The crop
must be grown in Arizona. You must make Arizona law provides a subtraction for
your gift to a charitable organization converting an existing fireplace to a
located in Arizona that is exempt from qualified wood stove, qualified wood
Arizona tax. fireplace, or gas fired fireplace and
non-optional equipment directly related
The subtraction is the greater of 80
to its operation. You may subtract up
percent of the wholesale market price or
to $500 of the costs incurred for
80 percent of the most recent sale price
converting an existing fireplace to a
for the contributed crop.
qualified wood stove, qualified wood
To determine if your crop gift qualifies fireplace, or gas fired fireplace on
for this subtraction, see Arizona your property located in Arizona. When
Department of Revenue Income Tax you figure your subtraction, do not
Procedure ITP 93-2. include taxes, interest, or other
finance charges.
Line D29 - Other Subtractions
A qualified wood stove or a qualified
Use line D29 if any of the following
wood fireplace is a residential wood
special circumstances apply. Attach your
heater that was manufactured on or after
own schedule to the back of the return,
July 1, 1990, or sold at retail on or
explaining any amounts entered here.
12

13. Form 140NR
after July 1, 1992. The residential MSA under Arizona law, but not
wood heater must also meet the U.S. federal law.
Environmental Protection Agency’s July
2. If you are an employee, your high
1990 particulate emissions standards.
deductible health coverage is
A qualified gas fired fireplace is any provided by your Arizona employer.
device that burns natural or liquefied If you are self employed, your high
petroleum gas as its fuel through a deductible health coverage is
burner system that is permanently provided by your Arizona business.
installed in the fireplace. The
3. Either you or your employer made
conversion of an existing wood burning
deposits into that MSA during the tax
fireplace to noncombustible gas logs
year.
that are permanently installed in the
fireplace also qualifies as a gas fired 4. You had to include the deposits in
fireplace. income on your federal income tax
return.
D. Claim of Right Adjustment for Amounts
You can subtract these deposits only to
Repaid in Prior Taxable Years
the extent included in your Arizona gross
You must make an entry here if all of income. Enter these contributions here.
the following apply.
F. Employer Contributions Made to
1. During a year prior to 2000 you were
Employee MSAs
required to repay income held under a
claim of right. If you are an employer, you may subtract
the amount contributed to your
2. The amount required to be repaid was
employees' MSAs that are established
subject to Arizona income tax in the
under Arizona law. You can subtract
year included in income.
these contributions only to the extent
3. You computed your tax for that prior not deductible for federal income tax
year under Arizona’s claim of right purposes. You can subtract these
provisions. contributions only to the extent
included in your Arizona gross income.
4. A net operating loss or capital loss
Enter these contributions here.
was established due to the repayment
made in the prior year. G. Certain Expenses Not Allowed for
Federal Purposes
5. You are entitled to take that net
operating loss or capital loss You may subtract some expenses that you
carryover into account when computing cannot deduct on your federal return
your 2000 Arizona taxable income. when you claim certain federal tax
credits. These federal tax credits are:
6. The amount of the loss carryover
•
allowed to be taken into account for the federal work opportunity credit;
•
Arizona purposes is more than the the empowerment zone employment
amount included in your Arizona gross credit;
•
income. the credit for employer-paid social
security taxes on employee cash tips;
Enter the amount by which the loss
• the Indian employment credit
carryover allowed for the taxable year
under Arizona law is more than the If you received any of the above federal
amount included in your Arizona gross tax credits for 2000, enter the portion
income. of wages or salaries attributable to
Arizona source income that you paid or
For more information on the Arizona
incurred during the taxable year that is
claim of right provisions, see Arizona
equal to the amount of those federal tax
Department of Revenue Individual Income
credits you received.
Tax Procedure ITP 95-1.
H. Other Adjustments
E. Deposits Made Into Your MSA
Other special adjustments may be
If you have an MSA, you may be able to
necessary. Call one of the numbers
subtract deposits made into that MSA.
listed on back cover if any of the
Make an entry here if all of the
following apply.
following apply.
• You are a qualified defense
1. You have an MSA that qualifies as an
13

14. Form 140NR
contractor that elected to amortize United States Government during 2000.
under Arizona Revised Statutes The Arizona Tax Court has ruled that
section 43-1024. Arizona income taxes paid on
contributions to federal retirement
• You sold or disposed of property that
plans discriminated against federal
was held for the production of income
employees for years after 1990. The
subject to Arizona tax and your basis
department has appealed that
was computed under the Arizona Income
determination to the Arizona Court of
Tax Act of 1954.
Appeals, so the issue is not yet final.
• You deferred exploration expenses
Line 19 is provided to alert you to a
determined under Internal Revenue
remedy available to you under Arizona
Code section 617 in a taxable year
law. On your 2000 return, you have two
ending before January 1, 1990, and
options if you had contributions made
you have not previously taken a
for income earned in Arizona.
subtraction for those expenses.
Option #1
Line D30 - Total Subtractions
You may subtract the amount of
Add lines D24 through D29. Enter the
contributions to your retirement plan
total here and onto the front of your
that was withheld from your wages paid
return on line 18.
by the federal government. Enter on line
19 the amount of such contributions
Different Last Names
included in your 2000 Arizona income. If
If you filed an Arizona tax return you choose this option and the courts
within the past four years with a ultimately decide that it is legal for
different last name, enter your prior the State of Arizona to tax your
last name(s), in Part E. retirement contributions, you will owe
additional tax and accrued interest.
Totaling Your Income (Also, see Protective Claim for Refund
below.)
Line 14 - Federal Adjusted Gross
Income Option #2
You must complete your federal return You may choose to ignore line 19. You
before completing your Arizona return. may instead file the protective claim
You must complete a 2000 federal return form. This form is in this instruction
to determine your federal adjusted gross booklet. Under this option you will pay
income even if not filing a federal tax on your contributions to the federal
return. retirement plan. You will also protect
your rights to a credit or refund of
Arizona uses federal adjusted gross
this tax if the courts ultimately decide
income as a starting point to determine
that is appropriate. The state will pay
Arizona taxable income. Enter your
interest in this event. The courts have
federal adjusted gross income from page
been asked to award up to 20% of your
2, line B14.
refund to the attorneys in the case.
Line 15 - Arizona Income
Protective Claim for Refund
Enter your Arizona income from page 2,
You can find this form in this
line B15, of your return.
instruction booklet. You can find this
Line 16 - Additions to Income form at the bottom of the page titled
Notice to Current and Former Federal
Enter the amount from page 2, line C19,
Civilian Employees. If you were a
of your return.
civilian employee of the United States
Line 18 - Subtractions From Income government at any time during the years
1996 through 2000, you should complete
Enter the amount from page 2, line D30,
this claim form. Submitting this claim
of your return.
form will protect your rights to tax
Line 19 - Elective Subtraction of relief for the years you were so
Federal Retirement Contributions employed. If you choose option #2 for
2000, you should also include 2000 in
This line applies only to individuals
your claim. Claims for 1996 must be
who were civilian employees of the
postmarked by April 16, 2001, to be
14

15. Form 140NR
valid. If you previously filed a return.
protective claim for 1996 through 1999,
Line 22 - Personal Exemptions
only include 2000 on the claim form
filed for 2000. Your personal exemption depends on your
filing status. See Personal Exemption
Please do not include the protective
Chart. Then complete the Personal
claim with your 2000 income tax return.
Exemption Worksheet.
Mail the claim form separately to the
address indicated to ensure proper NOTE For Active Duty Military Personnel
handling. Only: If you were on active duty in
Arizona during 2000, but were a resident
Figuring Your Arizona Tax of another state, do not prorate your
personal exemption. You are allowed a
Line 21 - Itemized or Standard
100 percent deduction for the personal
Deductions
exemption (to include spouse).
You must decide whether to take the
Personal Exemption Chart
standard deduction or to itemize your
deductions. Your Arizona income tax will If you checked filing Personal
be less if you take the larger of your status: Exemption
standard deduction or your itemized before
deduction. proration:
• Single (Box 7) $2,100
Your Standard Deduction
• Married filing joint $4,200
Tax Tip: The standard deduction is not return (Box 4) and
prorated. claiming no dependents
(Box 10)
If you take the standard deduction,
Personal Exemption Chart Continued
check box 21S.
• Married filing joint $6,300
If your filing status Your standard return (Box 4) and
is: deduction is: claiming at least one
• Single $ 3,600 dependent (Box 10
• Married filing $ 3,600 excluding persons
separately listed on Page 2, line
• Married filing $ 7,200 A3)
• Head of household and $4,200
jointly
• Head of household $ 7,200 you are not married
(Box 5)
Your Itemized Deduction • Head of household and $3,150
you a married Or
are
You may itemize deductions on your
person who qualifies Complete
Arizona return even if you do not
to file as head of Form 202
itemize deductions on your federal household (Box 5) Personal
return. The itemized deductions allowed Exemption
for Arizona purposes are those itemized Allocation
deductions that are allowable under the Election.
• Married
Internal Revenue Code. As an Arizona filing $2,100
nonresident, you must prorate these separately (Box 6) Or
with neither spouse Complete
deductions by the percentage which your
claiming any Form 202
Arizona gross income is of your federal
dependents (Box 10) Personal
adjusted gross income.
Exemption
To determine your Arizona itemized Allocation
deductions, complete a federal Form Election.
1040, Schedule A. Then complete the
Arizona Form 140NR, Schedule A. If you
itemize deductions, check box 21I.
NOTE: If you itemize, you must attach a
copy of your federal Schedule A and your
Arizona Schedule A(NR) to your Arizona
15

16. Form 140NR
• (prior to prorating) take an exemption
Married filing $3,150
of only $3,150 (one-half of the total
separately (Box 6) Or
$6,300).
with one spouse Complete
claiming at least one Form 202 If you are a married person who
dependent (Box 10 Personal qualifies to file as a head of
excluding persons Exemption household, you may take the entire
listed on Page 2, line Allocation $6,300 (prior to prorating) personal
A3) Election. exemption or you may divide the
exemption with your spouse. You and
Personal Exemption Worksheet
your spouse must complete Form 202 if
1. Amount from personal
either you or your spouse claim a
exemption chart. If
personal exemption of more than $3,150
you were an active
(prior to prorating). If you and your
duty military member
spouse do not complete Form 202 you may
during 2000, skip
take an exemption of only $3,150 (prior
lines 2 and 3 and
$ to prorating) (one-half of the total
enter this amount on
$6,300).
Form 140NR, page 1,
line 22. All other The spouse who claims more than one-half
taxpayers complete of the total personal exemption (prior
lines 2 and 3. to prorating) must attach the original
Form 202 to his or her return. The
2. Enter your Arizona
spouse who claims less than one-half of
percentage from Form
the total personal exemption (prior to
140NR, page 2, line %
prorating) must attach a copy of the
B16.
completed Form 202 to his or her return.
3. Multiply line 1 by the
percent on line 2. Line 23 - Taxable Income
Enter the result here $
Subtract lines 21 and 22 from line 20
and on Form 140NR,
and enter the result. Use this amount to
page 1, line 22.
˝ calculate your tax using Tax Rate Table
A married couple who does not claim any X or Y.
dependents may take one personal
Line 24 - Tax Amount
exemption of $4,200 (prior to
prorating). If the husband and wife Enter the tax from Tax Rate Table X or
file separate returns, either spouse may Y.
(prior to prorating) take the entire
Line 25 - Tax From Recapture of
$4,200 exemption, or the spouses may
Credits From Arizona Form 301
divide the $4,200 (prior to prorating)
between them. You and your spouse must Enter the amount of tax due from
complete Form 202 if either you or your recapture of credits from Form 301, Part
spouse claim a personal exemption of II, line 30.
more than $2,100 (prior to prorating).
Line 26 - Subtotal of Tax
If you and your spouse do not complete
Form 202, you may (prior to prorating) Add lines 24 and 25.
take an exemption of only $2,100 (one-
Line 27 – Clean Elections Fund Tax
half of the total $4,200).
Reduction
A married couple who claims at least one
dependent may take one personal You may designate $5 of your tax to go
exemption of $6,300 (prior to to the Citizen's Clean Election Fund and
prorating). If the husband and wife also reduce your tax liability by $5.
file separate returns, either spouse may If married filing a joint return, both
(prior to prorating) take the entire you and your spouse may each donate $5
$6,300 exemption, or the spouses may of your tax to go to the Citizen’s Clean
divide the $6,300 between them. You and Elections Fund and also reduce your tax
your spouse must complete Form 202 if liability by $10.
either you or your spouse claim a
To designate $5 of your tax to go to the
personal exemption of more than $3,150
Citizen's Clean Election Fund, the
(prior to prorating). If you and your
amount on line 26 must be at least $5.
spouse do not complete Form 202, you may
16

17. Form 140NR
If you are married filing a joint return defense contractor who has qualified
and you and your spouse each want to increases in employment. This tax credit
designate $5 to go to the Citizen's also includes a provision for a property
Clean Election Fund, the amount on line tax credit. Use Form 302 to figure this
26 must be at least $10. credit.
To make this designation, check box 1 2. Enterprise Zone Credit. You may
marked yourself. In the case of a joint qualify for this credit if your business
income tax return where both spouses in an Arizona enterprise zone had net
want to make this election, one spouse increases in qualified employment
should check box 1, and the other spouse positions. Use Form 304 to figure this
should check box 2. credit.
Line 28 – Tax Reduction 3. Environmental Technology Facility
Credit. You may qualify for this credit
Complete line 28 only if you checked a
if your business incurred expenses in
box on line 27. Otherwise, enter zero
constructing a qualified environmental
on line 28.
technology manufacturing facility. Use
To also reduce your tax by $5 the amount Form 305 to figure this credit.
on line 26 must be at least $10 ($20 in
4. Military Reuse Zone Credit. You may
the case of a joint return where both
qualify for this credit if you have
spouses designate $5). To figure your
qualifying net increases in full-time
tax reduction, complete the following
employment within a military reuse zone.
worksheet.
Use Form 306 to figure this credit.
Clean Elections Fund Tax Reduction 5. Recycling Equipment Credit. You may
Worksheet qualify for this credit if your business
1. Enter the subtotal of has installed recycling material
tax from Form 140NR, equipment. Use Form 307 to figure this
line 26. credit.
2. If you checked box 27
6. Credit for Taxes Paid to Another
1, enter $5. If a
State or Country. You may qualify for
joint return and your
this credit if you paid tax to Arizona
spouse also checked
and another state or country on the same
box 27 2, enter $10.
income. Use Form 309 to figure this
3. Balance of tax
credit.
eligible for tax
7. Agricultural Water Conservation
reduction. Subtract
System Credit. You may qualify for this
line 2 from line 1.
credit if you incurred expenses to
4. If you checked box 27
purchase and install an agricultural
1, enter $5. If a
water conservation system in Arizona.
joint return and your
Use Form 312 to figure this credit.
spouse also checked
box 27 2, enter $10. 8. Alternative Fuel Vehicle (AFV)
5. Tax reduction. Enter Credit. You may qualify for this credit
the lesser of line 3 if you purchased or leased a new
or line 4. Also enter alternative fuel vehicle. You may also
this amount on Form qualify for this credit if you converted
140NR, line 28. your conventional vehicle to operate as
an alternative fuel vehicle. Use Form
Line 29 – Reduced Tax
313 to figure this credit.
Subtract line 28 from line 26. Enter
9. Underground Storage Tanks Credit. You
the result.
may qualify for this credit if you
Line 30 - Credits From Arizona incurred expenses correcting a release
Form 301 of a regulated substance from an
underground storage tank. To qualify for
Complete line 30 if you can take any of
this credit, you must not have been
the following credits.
liable or responsible for the corrective
1. Defense Contracting Credit. You may action as an owner or operator of the
qualify for this credit if you are an underground storage tank. Use Form 314
Arizona Department of Commerce certified to figure this credit.
17