312-S: Agricultural Water Conservation System Credit – Distribution to Individual Shareholders (2024)
Arizona · Arizona DOR · Used for tax years 2024
Arizona Form 312-S reports an individual shareholder’s share of an S corporation’s qualifying agricultural water conservation system expenses and current-year credit, based on ownership interest. The shareholder uses this statement to complete their own Form 312.
Who files this form
An S corporation distributing the Agricultural Water Conservation System Credit must complete a separate Form 312-S for each individual shareholder and give the shareholder a copy.
An individual shareholder claiming the pass-through credit uses Form 312-S to complete their own Form 312 and includes both forms with their income tax return.
What you'll need
To complete Form 312-S, have:
- The S corporation’s name and employer identification number.
- The shareholder’s name, Social Security number, and ownership interest.
- The S corporation’s Form 312, Part 2, lines 6 and 10, used to report the shareholder’s share of qualifying expenses and the current year’s credit.
Individual shareholders need their completed Form 312-S to prepare their own Form 312. If credits come from more than one S corporation, have all Forms 312-S available.
How to file
S corporation: Complete Form 312-S for each individual shareholder, provide a copy to the shareholder, and keep a copy for your records. The form directs the corporation to “include a copy of Form 312 and a copy of each Form 312-S with your Form 312.”
Individual shareholder: Enter the credit from Form 312-S, line 2, on your own Form 312, Part 2, line 9. Include Form 312-S and your Form 312 with your return, and keep a copy for your records.
The supplied form does not give a mailing address or e-filing instructions.
Common mistakes
- Taking a subtraction for expenses used to claim the credit. An individual cannot take a subtraction for the same expenses for which a credit is claimed.
- Leaving out the required income addition. If you claim the pass-through credit, include the amount on Form 312-S, line 1, under “Other Additions to Income” on your Arizona individual income tax return.
- Claiming the credit in the wrong year. If you file on a calendar-year basis and the S corporation files on a fiscal-year basis, claim the credit for the year in which the corporation’s fiscal year ends.
- Forgetting attachments or copies. Shareholders must include Form 312-S and their own Form 312 with their return and keep a copy for their records.
Questions people ask
What does line 1 report?
Line 1 reports the individual shareholder’s share of qualifying expenses based on ownership interest, from Form 312, Part 2, line 6.
Where do I enter the pass-through credit?
Enter Form 312-S, line 2, on your own Form 312, Part 2, line 9.
What if I receive credits from more than one S corporation?
Add the line 2 credit amounts from all your Forms 312-S and enter the total on Form 312, Part 2, line 9.
Which tax year do I use if the S corporation has a fiscal year?
If you file on a calendar-year basis, claim the credit in the year the S corporation’s fiscal year ends. The form gives the example of a corporation whose tax year ends in February 2025: the shareholder claims that credit on their 2025 tax return.