120S Schedule K-1(NR): SchedK-1(NR) Nonresident Shareholder's Share of Income and Deductions (2024)
Arizona · Arizona DOR · Used for tax years 2024
Arizona Form 120S Schedule K-1(NR) reports a nonresident shareholder’s share of an S corporation’s income and deductions, including Arizona-source amounts. It also provides information on certain capital gains, disallowed federal expenses for marijuana establishments, and the sha
Who files this form
Arizona Form 120S Schedule K-1(NR) reports a nonresident shareholder’s share of an S corporation’s income and deductions for 2024.
The schedule includes the shareholder’s ownership percentage, distributive share amounts, Arizona apportionment ratios, and Arizona-source income. It also asks whether the S corporation made the Pass-Through Entity (PTE) election and whether the shareholder consented.
What you'll need
Have these documents and details available:
- The shareholder’s federal Schedule K-1 (Form 1120-S), which supplies the income and deduction items.
- The shareholder’s name, address, tax identification number, and stock ownership percentage for the taxable year.
- The S corporation’s name, address, and employer identification number (EIN).
- Arizona apportionment ratios and Arizona-source income amounts.
- A supporting schedule for other deductions reported on line 13.
If applicable, you will also need:
- Capital gain or loss details for qualified small business investments and exchanges of legal tender.
- Long-term capital gain or loss amounts separated between assets acquired before January 1, 2012, and assets acquired after December 31, 2011.
- Schedule DFE, line 16, for the marijuana-establishment information in Part 5.
- PTE election and shareholder consent details, the shareholder’s share of the PTE tax credit, and PTE taxes paid in 2024.
Common mistakes
- Leaving out the schedule for other deductions. Line 13 says to include a schedule.
- Completing capital gain information parts when they are not required. Part 2 is not required if the federal Schedule K-1 has no qualifying small business investment gain or loss. Part 3 is not required if it has no gain or loss from exchanging legal tender. Part 4 is not required if it has no capital gain or loss; otherwise, complete lines 16 through 18.
- Missing the overlap in Part 4. Lines 17 and 18 identify amounts already included in line 16, column (d).
- Completing Part 6 without shareholder consent. Complete it if the shareholder consented to the S corporation’s PTE election this year or in a prior year. Otherwise, leave it blank.
Questions people ask
Where do I report the Arizona-source income on Form 140NR?
Use Part 1, column (c). The form directs the total on line 4, royalties on line 7, and the Section 179 expense on line 12 to Form 140NR, line 21. Interest goes to line 16, dividends to line 17, capital gain or loss items on lines 8 through 10 to line 20, and other income or loss on line 11 to line 22.
Do all shareholders need the qualified small business information in Part 2?
No. The S corporation does not have to complete Part 2 if the shareholder’s federal Schedule K-1 does not include net capital gain or loss from investment in a qualified small business as determined by the Arizona Commerce Authority.
Where do I claim the PTE tax credit shown on line 21?
Individuals enter the amount on Form 355, Part 1, line 2. Estates and trusts should see the instructions for Form 141AZ, line 19, to claim the credit.
How are PTE taxes paid in 2024 separated on this schedule?
Lines 22 and 23 report the shareholder’s share of Arizona PTE taxes paid in 2024, split between taxable years before 2024 and taxable year 2024. Lines 24 and 25 make the same split for comparable PTE taxes from other states paid in 2024.