312: Agricultural Water Conservation System Credit (2025)
Arizona · Arizona DOR · Used for tax years 2025
Arizona Form 312 calculates the Agricultural Water Conservation System Credit. It reports qualifying system changes, expenses and reimbursements, pass-through credits from partnerships and S corporations, and available credit carryovers.
Who files this form
Use Arizona Form 312 to claim the Agricultural Water Conservation System Credit for tax year 2025. Include it with your return.
To claim a credit for your own qualifying water conservation system, you must have a qualified conservation plan on file and in effect with the United States Department of Agriculture Soil Conservation Service. If you answer “No” to the conservation plan question, the form says to stop because you cannot claim the credit.
The form also has lines for pass-through credits from partnerships and S corporations, and available credit carryovers from 2020 through 2024.
What you'll need
Have the following information ready to complete Form 312:
- Your name and Social Security number or EIN as shown on your return, plus your spouse’s name and Social Security number for a joint return.
- The date your conservation plan was filed and the location of the Soil Conservation Office.
- The type of system change or installation. If you select “Other,” provide a description.
- Your current-year qualifying expenses and reimbursements.
- Any Forms 312-P received for partnership pass-through credits or Forms 312-S received for S corporation pass-through credits.
- The original credit amounts and amounts previously used for any carryovers from 2020 through 2024.
How to file
Include Form 312 with your return. The provided form does not give a mailing address or e-filing directions.
- Complete Part 1 with your conservation plan details and the type of system change or installation.
- In Part 2, subtract reimbursements from qualifying expenses, then multiply the net amount by 75%. Add any partnership and S corporation pass-through credits.
- In Part 3, calculate available carryovers by subtracting amounts previously used from the original credit amounts.
- Complete Part 4 and transfer the amounts as follows:
- No Small Business Income election: Use Form 301, Part 1, line 4, columns (a), (b), and (c) for the current-year credit, carryover, and total.
- Small Business Income election made: Use Form 301-SBI, Part 1, line 3, columns (a), (b), and (c) for those amounts.
Common mistakes
- Claiming without the required conservation plan: If you answer “No” to question 1, stop. You cannot claim the credit without a qualified plan on file and in effect with the United States Department of Agriculture Soil Conservation Service.
- 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.
- Missing the required income addition for your own credit: An individual claiming a current-year credit on line 7 must report the net qualifying expenses from line 6 under “Other Additions to Income” on the Arizona individual income tax return.
- Missing the income addition for an S corporation credit: An individual shareholder claiming a current-year pass-through credit on line 9 must report the pro rata share of net qualifying expenses from Form 312-S, line 1, under “Other Additions to Income.”
Questions people ask
How is the credit for my own qualifying expenses calculated?
Subtract reimbursements from your current-year qualifying expenses. Multiply the remaining amount by 75% to calculate the credit on line 7.
What if I received more than one pass-through credit form?
For partnership credits, add the amounts on line 1 of all Forms 312-P and enter the total on Form 312, line 8. For S corporation credits, add the amounts on line 2 of all Forms 312-S and enter the total on line 9.
Which carryover years are listed on the 2025 form?
Part 3 lists 2020, 2021, 2022, 2023, and 2024. For each year, subtract the amount previously used from the original credit amount to find the available carryover.
Where do I report the credit if I made the Small Business Income election?
Transfer the current-year credit, available carryover, and total available credit to Form 301-SBI, Part 1, line 3, columns (a), (b), and (c), respectively.