165PA: Arizona Partnership Adjustment – Federal Imputed Underpayment Assessment (2025)
Arizona · Arizona DOR · Used for tax years 2025
Arizona Form 165PA reports changes to a BBA partnership's federal income resulting from a federal examination or the filing of an AAR. It reports the resulting Arizona partnership adjustment and calculates any tax due from the partnership when applicable.
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 2025 form covers calendar year 2025 or a fiscal year beginning in 2025. Part 1 notifies the Arizona Department of Revenue of a federal imputed underpayment assessment.
When it's due
For the 2025 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.
To pass the Arizona adjustment through to partners when box C2 is checked, the return must be filed with the department by the line B due date, and all required 165PA Schedules K-1 and/or K-1(NR) must be provided to both the department and the partners by that same date.
What you'll need
- Include the partnership’s notice of federal imputed underpayment assessment with the return.
- Include copies of the 165PA Schedules K-1 and/or K-1(NR) sent to partners, when required. Partner notices are not necessary if line 5 is zero.
- Have the partnership’s EIN, address, telephone number, and business activity code from federal Form 1065 available.
- Gather the IRS final determination date, federal adjustment amounts, related Arizona additions and subtractions, and an explanation of the changes.
- Provide information for every partner: name, address, tax identification number, ownership percentage, distributive share of income or loss, and resident, nonresident, or other-entity status. Attach additional schedules if there are more than eight partners.
- If completing Part 3, have the nonapportionable or allocable amounts, Arizona apportionment ratio, and amounts allocated to Arizona available.
How to file
- Complete Part 1 with the IRS final determination date, Arizona due date, and whether the federal tax was paid by the partnership or passed through to partners.
- Calculate the Arizona partnership adjustment in Part 2. If line 5 is greater than zero and box C1 or D2 is checked, continue to Part 3 to calculate the partnership’s tax liability.
- For all other cases, do not complete Part 3. Complete and mail the appropriate notices to partners, unless line 5 is zero, and include copies with the return.
- Explain the changes in Part 4 and list all partners in Part 5.
- Have a partner sign and complete the certification in Part 6. Include the federal assessment notice and required schedules.
Make any 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.
- Trying to pass through the adjustment on a late return. If filing after the line B due date, check box 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 partners out of Part 5. Include every partner and attach additional schedules if there are more than eight.
- Forgetting the federal assessment notice. Include it with the return.
Questions people ask
Who pays the Arizona tax if the partnership paid the federal tax?
Check box C1. The partnership must pay the Arizona tax due.
Can the Arizona adjustment be passed through to partners?
If the federal tax was passed through to partners, check box C2. The partnership must pass through the Arizona adjustment if it answers “Yes” on line D1: the return will be filed by the Arizona due date, and all required partner schedules will be provided to the department and partners by that same date. If the answer is “No,” check D2, and the partnership must pay the Arizona tax due.
Are partner notices required if the Arizona adjustment is zero?
No. If line 5 is zero, notices to partners are not necessary.
What tax rate is printed on the form?
Part 3, line 13, applies a 4.5% tax rate to the amount on line 12. Line 15 adds that tax to the penalty and interest on line 14 to determine the total due.
Who signs the return?
A partner signs the certification in Part 6 and provides the date, title, and printed name.