120S Schedule K-1(NR): SchedK1(NR) Nonresident Shareholder's Share of Income and Deductions (2025)
Arizona · Arizona DOR · Used for tax years 2025
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 capital gain information and, when applicable, the shareholder’s share of disallowed federal expenses, pass
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 2025.
The form includes the shareholder’s ownership percentage, distributive share amounts, Arizona apportionment ratios, and Arizona-source income. It also has sections for certain capital gains, marijuana establishment expenses, and pass-through entity (PTE) tax credits and taxes.
What you'll need
Have these records and details available to complete the schedule:
- The shareholder’s federal Form 1120-S, Schedule K-1, for income, deductions, and capital gain or loss amounts.
- The shareholder’s name, address, tax identification number, and stock ownership percentage.
- The S corporation’s name, address, and employer identification number (EIN).
- Arizona apportionment ratios and Arizona-source income amounts.
- Information about the S corporation’s PTE election and the shareholder’s consent, if applicable.
Include a schedule for other deductions reported on line 13. For Part 4, have asset acquisition information to separate gains or losses from assets acquired before January 1, 2012, from those acquired after December 31, 2011.
If applicable, have Schedule DFE, line 16, for disallowed federal expenses, and records of the shareholder’s share of PTE tax credits and taxes paid in 2025.
Common mistakes
- Do not leave out the supporting schedule for other deductions on line 13. The form says to include it.
- If the federal Schedule K-1 includes capital gain or loss, complete Part 4, lines 16 through 18. Part 4 is not required if it includes no capital gain or loss.
- Amounts on lines 17 and 18 are already included in line 16, column (d).
- Complete Part 6 if the shareholder consented to the S corporation’s PTE election in the current year or a prior year. Otherwise, leave it blank.
- For marijuana establishments, the shareholder must enter the line 20 amount on the Arizona income tax return. The destination depends on the return filed and whether the shareholder made the Small Business Income election.
Questions people ask
Which column do Form 140NR filers use?
Use column (c), Arizona Source Income. Part 1 lists the corresponding Form 140NR line beside each applicable item. For example, interest goes on line 16 and dividends go on line 17.
Must the S corporation complete Parts 2 and 3 for every shareholder?
No. Part 2 is not required if the shareholder’s federal Schedule K-1 has no net capital gain or loss from investment in a qualified small business as determined by the Arizona Commerce Authority. Part 3 is not required if it has no net capital gain or loss from the exchange of legal tender.
Where does an individual claim the PTE tax credit shown on line 21?
Individuals enter the amount on Form 355, Part 1, line 2. Estates and trusts are directed to the instructions for Form 141AZ, line 19.
When is beneficial owner information requested?
If the shareholder consented to the PTE election, question C asks whether the shareholder is a grantor trust or an SMLLC that is disregarded to an individual. If the answer is yes, enter the beneficial owner’s name and tax identification number.