Election Arizona 120S, page 1, Question A

• Go to Common State > State PTE Generation worksheet > Line 3 (Interview PTE-ST1) - Arizona, select the checkbox.
• Or Arizona > Other worksheet > Section 1 - Arizona Composite Basic Data > Line 19 (Interview Form AZ6,  box 70) - Generate PTE Return, select the checkbox.

Shareholder Opt-Out
Calculation AZ 120S, page 1, line 18, page 2, part 2, lines 33-48 are determined by pages 4 and 5 Schedule C and D. AZ 120S, page 4, Schedule C calculates the PTE tax liability based on shareholder count of each type (res/nonres and entity type) and their collected ownership percentage if they have, or have not, opted out to pay at the entity level.
How do I indicate a specific shareholder has opted out? 

1. Go to Shareholders > Shareholder Information worksheet > Section 7 - Shareholder State Information > Detail.
2. In column Shareholder Number (Interview STK-1, Box 30), input applicable shareholder number(s).
3. In column State Code (Interview Form STK-1, in Box 31) select AZ.
4. In column Alphabetic 2 (Interview STK-1, Box 132), input N to select the Opt-out box on Arizona K-1:  "Pass-Through Election – did this Shareholder consent to that election?"
5. In column Checkbox 1 (Interview ST-1, Box 165 - X Box 1), select for Resident Part Year Schedule K-1. (Corporation partners, this selection is ignored and will prepare K-1(NR) per state form instructions)
6. In Column Checkbox 2 (Interview ST-1, Box 166 - X Box 2), select for Nonresident Part Year Schedule K-1(NR)

Extension
120/165 EXT - Application for Automatic Extension of Time to File
120/165 EXT-E - Electronic Application for Automatic Extension of Time to File

1. Go to Extensions > Extensions worksheet > Section 1 - Federal Extension > Line 3 (Interview EXT-2, box 120) - Produce all state first extensions, select the checkbox.
2. Or expand Section 2 - State / City Extension > in column State (Interview EXT-2, Box 30) select AZ.
3. If after 3/15, also select Detail > Line 8 (Interview EXT-2, box 44) - X to Unlock.

Payments AZ165, page 5, Schedule F itemizes payments made toward the PTE liability, and these will carry to page 2, line 25.
Schedule F only populates in a PTE return.

1. Go to Arizona Payments/Penalties worksheet > Section 1 - Tax Payments Composite.
2. In Row Amount Paid (Interview AZ6, Boxes 76- 85), input applicable payment amounts.
3. In Row Date Paid (Interview AZ6, Boxes 77-86), input applicable dates paid.

• Extension date and amount paid will fill automatically when extension exported for electronic filing.
• Overrides: 
• Interview EXT-2, boxes 62, 68, and 76.

1. Extensions > Extensions worksheet > Section 2 > Detail.
2. Line 18 - controls line 1 of 120EXT.
3. Line 21 - controls line 2 of 120EXT.
4. Line 25 - controls line 4 of 120EXT.

PTE Next Year Estimates - 120/PTE-W PTE
Partnerships and S Corporations making the PTE election whose taxable income for the previous year exceeds $150,000 are required to make Arizona estimated tax payments - see instructions.
Optional Override

1. Go to Arizona > Other worksheet > Section 1 - AZ Composite Basic Data.
2. In Line 20 (Interview AZ6, box 72) - Estimated Arizona tax liability, input amount to control 120/PTE-W PTE, line 1.

Electronic Filing

• Extension and Return available with option to pay by direct debit. Informational diagnostics 38767 and 38768 will issue to confirm bank info setup properly.
• Estimates electronic filing not currently offered by Arizona S Corporation - 2023.

Filing Instructions

• Extension, Return and Estimates letters available.