338: Credit for Investment in Qualified Small Business (2024)
Arizona · Arizona DOR · Used for tax years 2024
Arizona Form 338 reports the 2024 credit for investment in qualified small businesses, including credits authorized by the Arizona Commerce Authority and credits passed through from partnerships or S corporations. It also calculates available credit carryovers and the total avail
Who files this form
Include Form 338 with your return to claim the Credit for Investment in Qualified Small Businesses. The form covers a current-year credit authorized by the Arizona Commerce Authority, pass-through credits from partnerships and S corporations, and available credit carryovers.
Partnerships must complete a separate Form 338-P for each partner. S corporations must complete a separate Form 338-S for each individual shareholder. Each recipient must receive the completed pass-through form and a copy of the Arizona Commerce Authority’s Authorization of Tax Credits.
What you'll need
- Your tax return, with Form 338 included.
- A copy of the Arizona Commerce Authority’s Authorization of Tax Credits. The form says you must include this with your return to be eligible for the credit.
- Form 338-P if you have a pass-through credit from a partnership, or Form 338-S if you have one from an S corporation.
- For carryovers, the original credit amount and amount previously used for each applicable year listed in Part 4: 2021, 2022 and 2023.
- Form 301 if you did not make the Small Business Income election, or Form 301-SBI if you did.
How to file
Include Form 338 and a copy of the Arizona Commerce Authority’s Authorization of Tax Credits with your return. The supplied form does not give a mailing address or e-file instructions.
- In Part 1, enter the authorized 2024 credit and any pass-through credits from Form 338-P or Form 338-S, Part 2, line 4. Add these amounts.
- In Part 4, calculate available carryovers by subtracting amounts previously used from the original credit amounts.
- In Part 5, enter the current-year credit, available carryover and total available credit.
- Transfer those three amounts to Form 301, Part 1, line 13, columns (a), (b) and (c). If you made the Small Business Income election, use Form 301-SBI, Part 1, line 9, columns (a), (b) and (c) instead.
Common mistakes
- Not claiming the credit on a timely filed return. For the year the credit is available, you must claim it by your return’s original or extended due date. Otherwise, that year’s credit expires and no carryover is allowed.
- Leaving out the authorization. You must include a copy of the Arizona Commerce Authority’s Authorization of Tax Credits with your return to be eligible for the credit.
- Not providing pass-through paperwork. Partnerships and S corporations must give each applicable partner or individual shareholder the completed Form 338-P or Form 338-S and a copy of the authorization.
Questions people ask
Where do I find my authorized 2024 credit amount?
Enter the amount for taxable year 2024 shown on the Arizona Commerce Authority’s Authorization of Tax Credits on Part 1, line 1.
Where do I enter a pass-through credit?
Enter the amount from Form 338-P, Part 2, line 4 on Form 338, line 2. Enter the amount from Form 338-S, Part 2, line 4 on Form 338, line 3.
Which carryover years are listed on the 2024 form?
Part 4 lists 2021, 2022 and 2023. For each year, subtract the amount previously used from the original credit amount, then add the available carryovers.
Does the Small Business Income election change where I report the credit?
Yes. If you made the election, transfer the Part 5 amounts to Form 301-SBI, Part 1, line 9. If you did not, transfer them to Form 301, Part 1, line 13.