325: Credit for Agricultural Pollution Control Equipment (2024)
Arizona · Arizona DOR · Used for tax years 2024
Arizona Form 325 calculates the Agricultural Pollution Control Equipment Credit for 2024. It reports qualifying equipment costs, credits passed through from partnerships, and available credit carryovers. This credit is no longer available to corporate taxpayers.
Who files this form
Form 325 is used by individuals claiming the Agricultural Pollution Control Equipment Credit, including credit passed through from partnerships.
Qualifying partnerships must pass the credit through to their individual partners and complete Form 325-P for each individual partner.
This credit is no longer available to corporate taxpayers.
What you'll need
To complete the 2024 form, have the following information and forms available:
- Your name as shown on Form 140, 140PY, 140NR, 140X or 165, and your Social Security number or Employer Identification Number.
- Each qualifying property's description, date placed in service or expected to be placed in service, and total cost incurred during the taxable year.
- A separate equipment schedule if you need more space.
- Form 325-P, Part 2, line 4, for any credit passed through from partnerships.
- For carryovers from the past five taxable years: the taxable year, original credit amount, and amount previously used or expired.
- Form 301 if you did not make the Small Business Income election, or Form 301-SBI if you did.
How to file
Include Form 325 with your tax return. The supplied form does not give a mailing address or e-file instructions.
Partnerships must complete Form 325-P for each individual partner, provide a copy to that partner, include a copy with the partnership's tax return, and keep a copy for their records.
Individuals must also report the current-year credit, available carryover, and total available credit on:
- Form 301, Part 1, line 9, columns (a), (b), and (c), if they did not make the Small Business Income election.
- Form 301-SBI, Part 1, line 5, columns (a), (b), and (c), if they made that election.
Common mistakes
- Claiming the credit as a corporate taxpayer. The form states that this credit is no longer available to corporate taxpayers.
- Forgetting the basis adjustment. If you elect to claim this credit, reduce the equipment's basis by the amount of the credit claimed when calculating Arizona depreciation or amortization.
- Missing partnership paperwork. Qualifying partnerships must pass the credit through to individual partners, give each partner a completed Form 325-P, include copies with the tax return, and keep copies for their records.
- Leaving out additional equipment details. Include a separate schedule if the form does not have enough space.
Questions people ask
How is the 2024 current-year credit calculated?
Multiply the total qualifying equipment costs incurred during the taxable year by 25%. Add any credit passed through from partnerships. The current-year credit is the smaller of that total or $25,000.
Where do I enter credit received from a partnership?
Enter the total credit passed through from partnerships shown on Form 325-P, Part 2, line 4, on Form 325, line 15.
Can I report a credit carryover?
If you claimed this credit and have a carryover from the past five taxable years, complete Part 5. For each year, subtract the amount previously used or expired from the original credit amount to calculate the available carryover.
What do partnerships enter for the current-year credit in Part 6?
Partnerships enter zero on line 25. Qualifying partnerships must pass the credit through to their individual partners.
Does claiming the credit affect depreciation or amortization?
Yes. For Arizona depreciation or amortization, you must reduce the agricultural pollution control equipment's basis by the amount of the credit claimed.