Complete this form only if you meet the following. 1. You are filing a 2014 Arizona income tax return. 2. You paid a net income tax to another qualified state or country for 2014. If you are claiming a credit for taxes paid to another state, payroll taxes withheld from income do not constitute a net income tax. Having tax withheld from your pay by Arizona and another state does not by itself qualify you for this credit. You must file a net income tax return to the other state.
If you are claiming a credit for taxes paid to another country, a net income tax paid to another country includes those taxes that qualify for a credit under Internal Revenue Code (IRC) §§ 901 and 903.
NOTE: To claim a credit for taxes paid to a foreign country, you must complete Form 309. You must complete Form 309 even if you did not have to complete federal Form 1116 to claim a credit on your federal return.
You may not claim this credit for the following.
1. Income taxes paid to any city or county.
2. Interest or penalties paid to another state or country.
NOTE: If you file an amended return after you claim this credit, be sure to recalculate the credit, if required.
Application of Credit
Claim this credit only if the income was subject to tax in both Arizona and the other state or country in the same tax year. You cannot apply this credit against interest or penalties payable to Arizona.
NOTE: You may use this credit only in the year incurred.
You cannot carry the credit forward to the next year. You also cannot carry the credit back to a prior year.
Please see form 309 instructions for more information.