308-ASC: Worksheet to Claim Credit for Increased Research Activities Using Alternative Simplified Credit Calculation (Revision)

Who files this form

Use Form 308-ASC to claim the Credit for Increased Research Activities using the Alternative Simplified Credit (ASC) method for taxable years beginning before January 1, 2023. Include the worksheet with your amended return.

You may claim the credit for any taxable year open by statute. If the year is open by federal waiver, attach a copy of that waiver.

You do not qualify for the ASC if you had no qualified research expenses in any one of the three prior years.

What you'll need

Have the following ready:

• Your amended return: Form 140X, 140X-SBI, 120X, or an amended Form 99T, 120S, or 165, as applicable.
• Your name as shown on that return and your Social Security number or Employer Identification Number.
• The tax year's Form 308-I for individuals, or Form 308 for C corporations, S corporations, partnerships, and exempt organizations with unrelated business taxable income (UBTI).
• Amounts for current-year qualified-service wages, supplies, computer rental or leasing costs, and contract research expenses.
• Your total qualified research expenses for the prior three years.
• For C corporations, including exempt organizations with UBTI, basic research payments to qualified organizations and the qualified organization base period amount.
• A copy of the federal waiver if the taxable year is open by federal waiver.

How to file

Include the completed worksheet with your amended return for a taxable year beginning before January 1, 2023.

• C corporations, including exempt organizations with UBTI, begin the calculation on line 1.
• S corporations, partnerships, individuals, and all other taxpayers begin on line 4.
• Individuals also enter the credit from line 19 on page 1, Part 2, line 23 of Form 308-I for the year being claimed, then complete the rest of that year's form.
• C corporations, S corporations, partnerships, and exempt organizations with UBTI also enter the credit from line 19 on page 1, Part 2, line 27 of Form 308 for the year being claimed, then complete the rest of that year's form.

For taxable years before 2019, consult that year's Form 308 or Form 308-I instructions for the correct line numbers.

The worksheet does not provide a mailing address or e-filing instructions.

Common mistakes

• Do not include wages used to figure the federal work opportunity credit on line 4.
• Stop at line 9 if you had no qualified research expenses in any one of the prior three years. You do not qualify for the ASC.
• If line 14 is $2,500,000 or less, complete lines 15 and 19 and skip lines 16 through 18. If it is more than $2,500,000, skip line 15 and complete lines 16 through 19.
• Do not forget to attach a federal waiver if the taxable year is open by that waiver.
• For years before 2019, do not assume the printed Form 308 or Form 308-I line numbers apply. Check the instructions for that year.
• The worksheet directs you to read the instructions before completing it.

Questions people ask

Can I use this worksheet for a taxable year beginning in 2024?

No. The worksheet says it is for amended returns for taxable years beginning before January 1, 2023.

Can I claim the ASC if I had no qualified research expenses in one of the prior three years?

No. Line 9 says you do not qualify if you had no qualified research expenses in any one of those years.

What do I do if the taxable year is open by federal waiver?

Include a copy of the waiver with the worksheet and mark the box indicating that the federal waiver is attached.

How is the credit calculated from line 14?

If line 14 is $2,500,000 or less, multiply it by 24%. If it is more than $2,500,000, subtract $2,500,000, multiply the difference by 15%, and add $600,000. Enter the resulting credit on line 19.

Official sources

• https://azdor.gov/forms