Claim of Right Corporate: of Right Restoration of a Substantial Amount Held Under Claim of Right – Corporate (2025)
Arizona · Arizona DOR · Used for tax years 2025
Arizona’s 2025 Claim of Right – Corporate form calculates a credit for income reported in a prior tax year and repaid in 2025 under a claim of right. It reports the amounts repaid, the decrease in prior-year Arizona tax, and an explanation of the claim.
Who files this form
Complete this form and include it with your return if you compute your 2025 corporate tax under Arizona’s claim of right provisions in Arizona Revised Statute § 43-1130.01. The form calculates the reduction in prior-year tax for income repaid in 2025 and explains the amounts restored.
If the total income repaid during 2025 that was held under claim of right is $3,000 or less, stop. You do not qualify to compute this credit.
If the repaid income was reported in more than one prior tax year, complete a separate Claim of Right form for each prior year and include each form with your 2025 tax return.
What you'll need
Have the following information ready:
- Your name as shown on Form 120, 120A or 120X, and your Employer Identification Number (EIN).
- The total income held under claim of right that you repaid during 2025.
- The prior tax years in which you reported that income.
- The Arizona tax return filed for each affected prior year, including the tax amount shown on that return.
- Whether you took a deduction instead of a credit for the claim of right on your 2025 federal income tax return.
- Your calculation of each prior year’s tax without the income repaid in 2025.
Provide an explanation showing how you calculated the amounts in Part 2. If you need more space, use page 2 or attach your own schedule.
How to file
Include the completed Claim of Right form with your 2025 corporate tax return. The form does not provide a mailing address or e-file directions.
- In Part 1, enter the total income repaid in 2025, identify the affected prior tax years, and answer the questions about multiple years and your federal deduction.
- In Part 2, enter the prior tax year and the tax from the Arizona return filed for that year. Refigure that year’s tax without the income repaid in 2025. Subtract the refigured tax on line 7 from the original tax on line 6.
- Enter the credit from line 8 on Form 120, line 24, box 24(b); Form 120A, line 16, box 16(b); or Form 120X, line 23(b).
- In Part 3, explain your claim and show how you figured the Part 2 amounts.
If you complete more than one Claim of Right form, add all line 8 amounts 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 years. If the repaid income was reported in more than one prior tax year, you must complete and include a separate form for each year.
- Missing the income addition after taking a federal deduction. If you took a deduction instead of a credit on your 2025 federal return, include line 1 as an “Other Addition to Income” on Form 120, Schedule A, line A8; Form 120A, Schedule A, line A8; or Form 120X, Schedule D, line D8.
- Failing to combine credits from multiple forms. Add all line 8 amounts and enter the total on your tax return.
- Leaving out the form or explanation. Include the form with your return and show how you figured the amounts in Part 2.
Questions people ask
Can I compute the credit if I repaid exactly $3,000 in 2025?
No. If the total on line 1 is $3,000 or less, the form says to stop. You do not qualify to compute the credit.
What if the income I repaid came from several prior tax years?
Complete a separate Claim of Right form for each prior year and include the forms with your 2025 return. Add the credits on line 8 of all forms and enter the total on your tax return.
How is the credit calculated?
For the prior year listed on line 5, refigure the tax without the income repaid in 2025. Subtract that amount from the tax shown on the Arizona return filed for that prior year. The difference on line 8 is your current-year claim of right credit.
What if I took a deduction instead of a credit on my federal return?
Include the amount on line 1 as an “Other Addition to Income” on Form 120, Schedule A, line A8; Form 120A, Schedule A, line A8; or Form 120X, Schedule D, line D8.
Where can I put a longer explanation of my claim?
Use the continuation page on page 2 or provide your own schedule. Your explanation must show how you figured the amounts entered in Part 2.