165PA: Arizona Partnership Adjustment – Federal Imputed Underpayment Assessment (2024)
Arizona · Arizona DOR · Used for tax years 2024
Arizona Form 165PA reports changes to a BBA partnership’s federal income resulting from a federal examination or the filing of an AAR. It calculates the Arizona partnership adjustment and, when applicable, the partnership’s Arizona tax liability.
Who files this form
BBA partnerships use Arizona Form 165PA to report changes to federal income resulting from a federal examination or the filing of an AAR.
The 2024 form covers calendar year 2024 or a fiscal year beginning in 2024.
When it's due
For the 2024 form, enter the IRS final determination date on line A. Add 90 days to that date to determine the Arizona due date on line B.
If the due date falls on a Saturday, Sunday, or legal holiday, the return is timely if postmarked the next business day.
If the federal tax was passed through to partners, passing through the Arizona adjustment also requires filing this return and providing all required 165PA Schedules K-1 and/or K-1(NR) to both the department and the partners by the Arizona due date.
What you'll need
- The partnership’s notice of federal imputed underpayment assessment. Include it with the return.
- The IRS final determination date and federal adjustment amounts.
- The partnership’s name, address, telephone number, EIN, and business activity code from federal Form 1065.
- Information needed to calculate Arizona adjustments and, if applicable, apportionment and tax liability.
- Each partner’s name, address, tax identification number, ownership percentage, distributive share of income or loss, and resident, nonresident, or other-entity designation. Include additional schedules if there are more than eight partners.
- Copies of any required 165PA Schedules K-1 and/or K-1(NR) sent to partners.
How to file
- Complete Part 1 with the IRS final determination date, Arizona due date, and information about who paid or will pay the tax.
- Calculate the Arizona partnership adjustment in Part 2. If line 5 is greater than zero and box C1 or D2 is checked, complete Part 3 to calculate the partnership’s tax liability. Otherwise, do not complete Part 3; complete and mail any required notices to partners and include copies with the return. Notices are not necessary if line 5 is zero.
- Explain the changes in Part 4 and provide information for all partners in Part 5.
- Have a partner sign and complete the certification in Part 6. Include the notice of federal imputed underpayment assessment.
- If tax is due, make the check payable to Arizona Department of Revenue.
Mail the return to:
Arizona Department of Revenue
PO Box 52153
Phoenix, AZ 85072-2153
Common mistakes
- Including federal credit changes on line 1. The form specifically says not to include them.
- Choosing to pass through the Arizona adjustment when filing late. If the return is filed after the due date on line B, the form says to check D2 and pay the Arizona tax due.
- Completing Part 3 when it does not apply. Continue to Part 3 only when line 5 is greater than zero and box C1 or D2 is checked.
- Leaving out the federal assessment notice. The form reminds filers to include the partnership’s notice of federal imputed underpayment assessment.
Questions people ask
Who pays the Arizona tax if the partnership paid the federal tax?
The partnership must pay the Arizona tax due and check box C1.
Can the partnership pass the Arizona adjustment through to its partners?
If the federal tax was passed through to partners, check C2 and answer line D. The partnership must pass through the Arizona adjustment if it files the return and provides all required schedules to the department and partners by the Arizona due date. If it cannot meet those requirements, it must check D2 and pay the Arizona tax due.
Are partner notices required when the adjustment is zero?
No. If line 5 is zero, notices to partners are not necessary.
What tax rate does Part 3 use?
Line 13 applies a 4.5% tax rate to the amount on line 12. Line 15 adds that tax to the penalty and interest entered on line 14 to determine the total due.