308-I: Credit for Increased Research Activities – Individuals (2025)
Arizona · Arizona DOR · Used for tax years 2025
Arizona Form 308-I is used by individuals to claim the credit for increased research activities. It calculates credits from a sole proprietorship, reports credits passed through from S corporations and partnerships, and accounts for unused credit carryovers and any refundable por
Who files this form
Individuals must complete Form 308-I to claim the Arizona credit for increased research activities if they have:
- A current-year credit from a sole proprietorship.
- A current-year credit passed through from an S corporation or partnership.
- Unused credit carried over from tax years 2009 and after.
Use Form 308-I, not Form 308. If you have no qualified research expenses from a sole proprietorship, no pass-through credit, and no credit carryovers, the form says you are not eligible to claim this credit.
What you'll need
Have the following information and documents ready, as applicable:
- Your name as shown on your Arizona return and your Social Security number.
- For a sole proprietorship, amounts for qualified wages, supplies, computer rental or lease costs, and contract research expenses.
- For the regular credit calculation, average annual Arizona gross receipts and the fixed-base percentage.
- For the Alternative Simplified Credit, qualified research expense amounts for the prior three years.
- Forms 308-P and 308-S showing credits passed through from partnerships and S corporations. If claiming credits from more than one entity, include copies of all these forms received.
- A copy of your Arizona Commerce Authority (ACA) certification if you answer “Yes” to the refundable-credit question on line 2.
- For carryovers, the original credit amount and amounts previously used or expired, by tax year.
Before completing refundable-credit Part 5, individuals who made the Small Business Income (SBI) election must complete Forms 301-SBI and 301. Before completing refundable-credit Part 6, individuals who did not make that election must complete Form 301.
How to file
Include Form 308-I with your Arizona return.
Complete Part 1 to determine which parts apply to you. Sole proprietors claiming the regular credit complete Part 2. Those electing the Alternative Simplified Credit check the ASC box and complete Part 12. Report pass-through credits in Part 3.
Complete the applicable refundable-credit, carryover, and nonrefundable-credit parts, and transfer the amounts to the return or credit summary forms identified on Form 308-I.
Common mistakes
- Using the wrong form: Individuals claiming this credit must use Form 308-I, not Form 308.
- Including excluded wages: Do not include wages used to figure the federal work opportunity credit in the qualified-wage amounts.
- Claiming the ASC without the required expense history: If you have no qualified research expenses in any one of the prior three years, the form says you do not qualify for the ASC.
- Completing the wrong refundable-credit part: Part 5 is for eligible individuals who made the SBI election. Part 6 is for eligible individuals who did not.
- Carrying forward credit from a refund year: If you elect a refund of 75% of the excess credit, you cannot carry forward any amount from that year.
- Completing Part 10 when it does not apply: Skip Part 10 if you completed Part 5 or Part 6 and are receiving a refund, or if you have no carryovers.
Questions people ask
Can I claim a credit passed through from a partnership or S corporation?
Yes. Report partnership credits from Form 308-P on line 24 and S corporation credits from Form 308-S on line 25.
Can a sole proprietor choose the Alternative Simplified Credit?
The form provides an ASC calculation in Part 12. Check the ASC box if electing it. You do not qualify if you have no qualified research expenses in any one of the prior three years.
How is the refundable amount calculated?
Parts 5 and 6 calculate a tentative refund of 75% of the applicable excess credit. Part 7 limits the refund to the lesser of that tentative amount or the total maximum refundable amounts reported on lines 37a through 37c.
Can I carry forward credit from a year for which I elect a refund?
No. The form states that if you elect a refund of 75% of the excess credit, you cannot carry forward any amount from the year of the refund.