308-S: for Increased Research Activities – Distribution to Shareholders (2025)
Arizona · Arizona DOR · Used for tax years 2025
Arizona Form 308-S reports a shareholder’s share of an S corporation’s credit for increased research activities. It also reports the shareholder’s share of the maximum refundable portion of the credit, if the corporation has received a certificate from the Arizona Commerce Author
Who files this form
An S corporation distributing the credit for increased research activities must complete a separate 2025 Form 308-S for each shareholder, except trust or estate shareholders.
If a grantor trust is disregarded for federal income tax purposes, its ownership share is treated as owned by the grantor. The grantor may claim that share of the credit.
Shareholders use Form 308-S to complete their own Form 308-I.
What you'll need
To complete the 2025 Form 308-S, have:
- The S corporation’s name and employer identification number (EIN).
- The shareholder’s name, Social Security number (SSN), and proportionate ownership share.
- The S corporation’s Form 308, including Part 4, line 29, for the total credit.
- If completing the refundable-credit portion, the Arizona Commerce Authority certificate and the maximum refund amount from Form 308, Part 5, line 35.
Shareholders need the completed Form 308-S to complete Form 308-I. If Part 3 is completed, they must include Form 308-S and a copy of the Arizona Commerce Authority certification with their return.
How to file
S corporation
- Complete Form 308-S for each eligible shareholder.
- Enter the total credit from Form 308, Part 4, line 29, on line 3. Multiply it by the shareholder’s proportionate share on line 2(c) to calculate line 4.
- For Part 3, answer whether the corporation received an Arizona Commerce Authority certificate. If yes, include a copy, enter the maximum refund from Form 308, Part 5, line 35, on line 5, and multiply it by the shareholder’s proportionate share to calculate line 6. If no, stop: no refundable portion can be passed through.
- Include a copy of each completed Form 308-S with the S corporation return.
- Give each shareholder a copy of the completed form and, if Part 3 is completed, the certification. Keep a copy of each completed form.
Shareholder
- Enter Form 308-S, line 4, on Form 308-I, Part 3, line 25.
- Enter Form 308-S, line 6, on Form 308-I, Part 7, line 37c.
- If Part 3 is completed, include Form 308-S and a copy of the certification with your return.
- Keep the form and certification for your records.
The form does not provide a mailing address or e-filing instructions.
Common mistakes
- Passing through a refundable credit without a certificate. Part 3 says to stop if the S corporation has not received an Arizona Commerce Authority certificate. There is no refundable portion to pass through.
- Leaving out required copies. The corporation must include each completed Form 308-S with its return. If Part 3 is completed, the shareholder must include the form and certification with their return.
- Claiming the credit in the wrong year. If you file on a calendar-year basis and the corporation files on a fiscal-year basis, claim the credit for the year in which the corporation’s fiscal year ends.
- Not keeping records. The corporation must keep each completed Form 308-S. Shareholders must keep their form and certification.
Questions people ask
Can a trust or estate shareholder receive Form 308-S?
The form excludes trust and estate shareholders. However, an ownership share held by a grantor trust disregarded for federal income tax purposes is treated as owned by the grantor, who may claim the credit.
How is my share of the credit calculated?
The corporation multiplies its total credit on line 3 by your proportionate share on line 2(c). The result on line 4 is your portion of the credit.
Does Form 308-S automatically provide a refundable credit?
No. If the corporation has not received an Arizona Commerce Authority certificate, the form says there is no refundable portion to pass through. With a certificate, Part 3 calculates your share of the maximum refundable amount.
Where do I report the amounts on my Form 308-I?
Enter line 4 on Form 308-I, Part 3, line 25. Enter line 6 on Form 308-I, Part 7, line 37c.
What if I use a calendar year but the corporation uses a fiscal year?
Claim the credit on your return for the year in which the corporation’s fiscal year ends.