315: Pollution Control Credit (2024)

Who files this form

Arizona Form 315 reports the Pollution Control Credit and available carryovers.

• C corporations, S corporations claiming the credit at the corporate level, and exempt organizations with UBTI use it to report their credit.
• Partnerships qualifying for the credit must pass it through to their corporate partners and complete Form 315-P for each corporate partner.
• Individuals may no longer establish this credit. Individuals with a valid carryover may use it for the remaining 5-year carryforward period and complete only Parts 5 and 6.

What you'll need

Have the following information and forms available, as applicable:

• Your name as shown on your tax return and your Social Security number or Employer Identification Number.
• For qualifying property: a description, the date it was placed in service or is expected to be placed in service, and the total cost incurred during the taxable year.
• A separate equipment schedule if you need more space.
• Form(s) 315-P for credits passed through from partnerships to corporate partners.
• For carryovers: the taxable year, original credit amount, and amount previously used or expired.
• Form 300, Form 301, or Form 301-SBI, as directed in Part 6 for your taxpayer type.

How to file

Include Form 315 with your tax return. The form does not provide a mailing address or e-file directions.

• Individuals with valid carryovers skip to Parts 5 and 6.
• Corporate claimants and exempt organizations with UBTI transfer the applicable Part 6 amounts to Form 300, Part 1, line 2.
• Individuals who did not make the SBI Election transfer their carryover and total available credit to Form 301, Part 1, line 5, columns (b) and (c).
• Individuals who made the SBI Election transfer those amounts to Form 301-SBI, Part 1, line 4, columns (b) and (c).

Partnerships passing through the credit must complete Form 315-P for each corporate partner, provide a copy to that partner, include a copy with their tax return, and keep a copy for their records. Partnerships enter zero on Form 315, line 25.

Common mistakes

• Trying to establish a new credit as an individual. Individuals may only use valid carryovers for the remaining 5-year carryforward period.
• Completing the equipment calculation as an individual with a carryover. The form directs these individuals to skip to Part 5 and complete Parts 5 and 6.
• Forgetting the basis adjustment. A taxpayer electing to claim this credit under A.R.S. § 43-1170 must reduce the pollution control equipment's basis by the credit claimed when calculating Arizona depreciation or amortization.
• Missing partnership copies. Partnerships must provide each corporate partner with a completed Form 315-P, include copies with their return, and keep copies for their records.
• Leaving out additional equipment details. Include a separate schedule if more space is needed.

Questions people ask

How is the current-year credit calculated?

Multiply the total qualifying pollution control equipment cost incurred during the taxable year by 10%. Add any credit passed through from partnerships on Form(s) 315-P. The total current-year credit is the lesser of that sum or $500,000.

Can an individual claim a new credit for 2024?

No. Individuals may no longer establish this credit. Those with a valid carryover may carry it forward for the remaining 5-year carryforward period.

How do I calculate my available carryover?

In Part 5, subtract the amount previously used or expired from the original credit amount for each listed taxable year. Add the available amounts on lines 19 through 23 to get the total on line 24.

Does claiming the credit affect depreciation or amortization?

Yes. For Arizona depreciation or amortization, a taxpayer electing to claim the credit under A.R.S. § 43-1170 must reduce the pollution control equipment's basis by the amount of credit claimed.

Official sources

• https://azdor.gov/forms