Claim of Right Corporate: Corp Restoration of a Substantial Amount Held Under Claim of Right – Corporate (2024)
Arizona · Arizona DOR · Used for tax years 2024
Arizona’s 2024 Claim of Right – Corporate form calculates a claim of right credit based on a decrease in a prior year’s Arizona tax. It reports income repaid in 2024, recalculates prior-year tax without that income, and explains the claim. Include this form with your return.
Who files this form
Complete this form if your corporation computes its current-year tax under Arizona’s claim of right provisions, Arizona Revised Statute § 43-1130.01. The form calculates the reduction in prior-year tax and explains the amounts repaid.
For 2024, if the total income repaid that was held under claim of right is $3,000 or less, you do not qualify to compute this credit.
If the income repaid in 2024 was reported in more than one prior tax year, complete and include a separate Claim of Right form for each prior tax year.
What you'll need
Have these returns and details available to complete the form:
- Your Form 120, 120A or 120X, including the name shown on it and your employer identification number (EIN).
- The Arizona tax return filed for each prior tax year involved, including the tax amount reported.
- The total income held under claim of right that you repaid during 2024, and the prior tax years in which you reported it.
- Your 2024 federal income tax return, to identify whether you took a deduction instead of a credit for the repayment.
- Your calculation of each prior year’s tax without the income repaid in 2024, and an explanation of those calculations.
If your explanation needs more space, use the form’s continuation page or provide your own schedule.
How to file
Include this form with your 2024 tax return. The form does not provide a mailing address or e-filing directions.
- Enter your name and EIN. In Part 1, enter the total qualifying income repaid in 2024, list the prior tax years involved, and answer the questions about multiple years and your federal deduction.
- In Part 2, identify the prior tax year and enter the tax from the Arizona return filed for that year. Refigure that tax without the income repaid in 2024.
- Subtract the refigured tax on line 7 from the tax on line 6. Enter the difference on line 8 as your current-year claim of right credit.
- Transfer the credit to Form 120A, line 16, box 16(b); Form 120X, line 23(b); or Form 120, line 24, box 24(b).
- In Part 3, explain the claim and show how you calculated the amounts in Part 2.
If more than one prior tax year is involved, include a separate form for each year. Add the amounts on line 8 of all forms and enter the total on your tax return.
Common mistakes
- Continuing when line 1 is $3,000 or less. The form says to stop because you do not qualify to compute the credit.
- Using only one form for multiple prior tax years. A separate Claim of Right form is required for each prior tax year involved.
- Missing the income addition after taking a federal deduction. If you took a deduction instead of a credit on your 2024 federal return, include the amount on line 1 as an “Other Addition to Income” on Form 120 or 120A, Schedule A, line A8, or Form 120X, Schedule D, line D8.
- Transferring only one credit when you completed multiple forms. Add all line 8 amounts and enter the total on your tax return.
- Leaving out the form or calculation explanation. Include the form with your return and show how you figured the Part 2 amounts in Part 3.
Questions people ask
Can I compute the credit if I repaid exactly $3,000 in 2024?
No. The form says to stop if the total on line 1 is $3,000 or less.
What if the repayment relates to income reported in several prior years?
Complete a separate Claim of Right form for each prior tax year and include each form with your 2024 return. Add the credits on line 8 and report the total on your return.
What if I took a deduction on my 2024 federal return instead of a credit?
Include the amount on line 1 as an “Other Addition to Income” on Form 120 or 120A, Schedule A, line A8, or Form 120X, Schedule D, line D8.
Where can I continue my explanation if Part 3 is too small?
Use page 2, the continuation page, or provide your own schedule.
Where does the form point me for more information?
The form refers to Corporate Income Tax Procedure, CTP 16-1, for more information on Arizona’s claim of right provisions.