ARIZONA
community property state 

 

Military Income:   Tax exempt. Arizona does not tax active duty military pay.  Members of the U.S. armed forces may subtract the amount of pay received for active duty military service, including pay received for active service in a combat zone or an area given the treatment of a combat zone, to the extent included in Arizona gross income and subject to Arizona tax.  A full year Arizona resident may take this subtraction on form 140 only.

Military Filing Requirement:  No, if no tax withheld a return does not have to be filed to maintain residency.

Military Spouse Residency Relief Act Active duty military member is present in Arizona in compliance with military orders. Spouse in state solely to be with active duty military member. Spouse maintains residence in same state as military member which is other than Arizona. File Form WECM, Withholding Exemption Certificate for Military Spouses, with employer, (must include copy of latest LES and copy of military dependant ID with Form WECM).

Forms Used:             

Filing Status:   The military member is a resident of Arizona.

Attach Copy of Federal Return:  No

Not Taxed: 

 Other State Tax Credit:  (Form 309-R)

Where to Mail:
Refunds/No Tax Due: Payments:  
Arizona Dept of Revenue 
P O Box 52138
Phoenix, AZ  85072-2138
Arizona Dept of Revenue
P O Box 52016
Phoenix, AZ  85072-2016
Forms:  1-602-542-4260   General Information:  1-602-255-3388
Electronic Filing:  1-602-542-4643 ext 4601
Other Info and Forms:   E-Mail:  taxpayerassistance@azdor.gov
Arizona Dept of Revenue
Taxpayer Assistance  
1600 W. Monroe
Phoenix, AZ  85007
602-255-3381
 
Website:  https://www.azdor.gov
E-filing Info: 
 
Tax Form Instructions:
Resident Instructions Non-Resident Instructions
 

Military Specific Publication

  

Filing Status Scenarios

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer)
2.  Taxpayer and Spouse Different States of Residence
3.  Taxpayer and Spouse Non-Residents
4.  Taxpayer Non-Resident - Spouse Part-Year Resident
5.  Taxpayer Single or Married - Resident but Income from Other State
6.  Amended Return

 

15000
1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer) - Taxpayer and spouse are both Arizona residents, lived at their present location all year, and one or both had income.

Main Info Screen.

W-2 Form.  Arizona does not tax military income.  To exclude the military income properly you must check the Military box on the bottom of the W-2 form for the military member's income.

Arizona 140 Form.  A joint resident Arizona income tax return is prepared.

Arizona 140 Form, Page 1.  Review the form to ensure that the military income is exempted on line 32.

Complete all other fields and forms with red or required information.

2.  Taxpayer and Spouse - Different States of Residence - Taxpayer or spouse is a resident of Arizona, while the other member is a resident of a different state.  An Arizona income tax must be prepared due to the taxpayer or spouse having Arizona earned income.

Main Info Screen.  If the spouse is a domicile (resident) of another state, the parties should file as nonresidents.  For this example, the taxpayer is a resident of Arizona while the spouse is a resident of North Dakota.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Arizona Form 140 NR.  If spouse is a domicile of another state, a married filing jointly nonresident return is filed.   

  

Arizona 140NR Page 2.  The Arizona resident military income is subtracted from the return on Page 2, line 46, Other subtractions from income. Link on line 46 to AZ Sch 1.

Arizona AZ Sch 1.  Enter the amount of military income on Line R under Other Subtractions.

Complete all other fields and forms with red or required information.

3.  Taxpayer and Spouse Non-Residents - Taxpayer and spouse are residents of a different state.  The spouse and taxpayer must file a Arizona tax return due to one or both having Arizona earned income.
Main Info Screen.  If both members are residents of another state, the parties should file as nonresidents.  For this example, the taxpayer and spouse are both residents of Wisconsin but must file a Arizona income tax return because the spouse worked in Arizona.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Arizona Form 140 NR.  This form will be generated for an Arizona non-resident who must report Arizona earned income. Line 12 should be checked if the return is prepared for a nonresident active duty military member living in Arizona. 

Arizona 140NR Page 2. Check the box on B4 indicating MSRRA. The nonresident military spouses wages are subtracted from the Arizona column of Line B5. Link on the Arizona column of B5 to a Scratch Pad.

Scratch Pad - Detail Sheet.  In the Type field enter a description of the income.  In the Amount column enter the wage income of the Nonresident Military Spouse as a negative value.

Complete all other fields and forms with red or required information.

4.  Taxpayer Non-Resident - Spouse Part-Year Resident - Taxpayer and spouse moved to or from Arizona during the tax year.  The taxpayer is a resident of a different state.  The Spouse is a part-year resident of Arizona.  The Spouse and taxpayer must file a Arizona tax return due to one or both of them having Arizona earned income and possibly income from another state.
Main Info Screen.  For this example, the taxpayer is in the military and a resident of Indiana.  The taxpayer and spouse moved from Arizona to North Dakota during the year.  The spouse was a resident of Arizona but is now changing their residency to North Dakota for tax purposes.  The spouse therefore was a part-year resident of both Arizona and North Dakota and must file a Arizona income tax return because the spouse worked in Arizona.

Part Year Resident States Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Arizona Form 140PY.  This form will be generated for an Arizona part- year resident who must report Arizona earned income.

Complete the dates of residency and the other state of residencey on Line 14 of the Arizona Form 140PY.  

Review the remainder of the Form 140PY to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

5.  Single or Married Military Resident of Arizona with Income from Another State  - Taxpayer is single.  The taxpayer must file a Arizona tax return due to him or her having Arizona earned income.
Main Info Screen.  For this example the taxpayer is a military member stationed in North Dakota but a resident of Arizona.  The taxpayer had a job in North Dakota therefore having North Dakota earned income.

W-2 Form.  Arizona does not tax military income.  To exclude the military income properly you must check the Military box on the bottom of the W-2 form for the military member's income.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Arizona 140 Form.  Arizona taxes residents on income from all sources, even income earned while living in another state (North Dakota).  

An Arizona Form 309 - Credit for Taxes Paid to Another State or Country.   Arizona Form 309 must be added to the tax return and prepared to give a credit for taxes paid to another state (North Dakota). You must complete the other states tax return first, then enter the amount of tax from the other states tax return.  This is not the amount the taxpayer had withheld from his or her pay but the amount of tax imposed on them.  Line 2 is the amount of income earned in the other state (North Dakota).  Line 12 is the amount of income tax liability on the (North Dakota) tax return while Line 14 is the amount that North Dakota used to compute the tax.  A copy of the other state's return must be attached to the Arizona return if not e-filed.

Arizona 140 Form, Page 1.  Review the form to ensure that the military income is exempted on line 32.

Complete all other fields and forms with red or required information.

6.  Amended Return  - An amended Arizona return must be filed because the taxpayer received new tax information after their Arizona return was filed.
Federal 1040X Form.  Before making any changes to the tax return add the US 1040X form to the tax return.  You must check the box under Income and Deductions to lock in the entries in Column A - Original amount or as previously adjusted.

Arizona 140X - Arizona Amended Income Tax.  Add the Arizona 140X Form to the return.  You must check the box to lock in the entries in Column A, before making any changes to the return.

Make whatever changes are required to the federal tax return.  For this example, a new W-2 was received.

Arizona 140X - Arizona Amended Income Tax.   Return to the Arizona 140X form to determine if the taxpayer is receiving an additional refund or owe's money. 

Arizona 140X - Amended Income Tax, Page 2.  On Page 2 you must enter an explanation for the Reason that the Amended Return is being prepared.   Enter the current date in the Date field.

Amended returns can not be e-filed.  The taxpayer must mail the federal 1040X and any state amended returns if required to be filed.