312-S: Agricultural Water Conservation System Credit – Distribution to Individual Shareholders (2025)
Arizona · Arizona DOR · Used for tax years 2025
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 this credit must complete a separate 2025 Form 312-S for each individual shareholder and give the shareholder a copy.
An individual shareholder receiving the 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, employer identification number, and tax year information.
- The shareholder’s name, Social Security number, and ownership interest.
- Form 312, Part 2, line 6, for the qualifying expenses used to determine the shareholder’s pro rata share.
- Form 312, Part 2, line 10, for the current-year credit used to determine the shareholder’s pro rata share.
The shareholder needs the completed Form 312-S to prepare their own Form 312. If receiving this credit 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.
- Give each shareholder a copy and keep a copy for your records.
- The form’s attachment instruction reads: “Include a copy of Form 312 and a copy of each Form 312-S with your Form 312.”
Individual shareholder
- Enter Form 312-S, line 2, on your own Form 312, Part 2, line 9. If you have Forms 312-S from more than one S corporation, add the line 2 amounts and enter the total.
- If claiming the pass-through credit, include Form 312-S, line 1, under “Other Additions to Income” on your Arizona individual income tax return.
- Include Form 312-S and your own Form 312 with your return. Keep a copy for your records.
The supplied form does not give a mailing address or e-file instructions.
Common mistakes
- Taking a subtraction for the same expenses used for the credit. An individual cannot do both. If claiming this pass-through credit, include the amount on Form 312-S, line 1, under “Other Additions to Income.”
- Claiming the credit in the wrong year when tax years differ. 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.
- Leaving out the required forms. Shareholders must include Form 312-S along with their own Form 312 with their return.
Questions people ask
What does line 2 show?
It shows the individual shareholder’s pro rata share of the current-year credit based on ownership interest. This is the pass-through credit from the S corporation listed on the form.
What if I receive this credit from more than one S corporation?
Add the line 2 amounts from all your Forms 312-S and enter the total on your own Form 312, Part 2, line 9.
Which return do I use if the S corporation’s fiscal year ends in February 2026?
If you file on a calendar-year basis, claim the credit on your 2026 tax return, as the form’s example explains.
Should I keep a copy of Form 312-S?
Yes. The form directs both the S corporation and the individual shareholder to keep a copy for their records.