Corporate Income Tax Filing Requirements
Every corporation subject to the Arizona Income Tax Act of 1978 must file an Arizona corporate income tax return.
Limited Liability Companies
A limited liability company that makes a valid federal election to be taxed as a corporation must file an Arizona corporate income tax return. A single member limited liability company that is disregarded as an entity is treated as a branch or division of the owner, and is included in the tax return of its owner. Refer to the department’s ruling, CTR 97‑2, Limited Liability Companies, for further information.
Corporations, partnerships, S corporations, and fiduciaries can now electronically file their income taxes to the Arizona Department of Revenue (ADOR).
Legislation signed into law initiated a multi-year phase-in period for businesses required to file income tax returns electronically. The e-file option was introduced in 2020 for tax year 2019 and is now mandatory for corporations and partnerships for tax year 2020 returns (A.R.S. § 43-323(F)).
In addition to e-filing being faster and more secure, returns are verified quicker than paper submissions, which benefits taxpayers if any errors require their attention.
What Form Should I Use?
Corporations may use Form 120 if the corporation:
- Has income from business activity that is taxable in more than one state (a “multistate corporation”);
- Is a partner in:
- A multistate partnership: and/or
- A partnership that conducts no business in Arizona;
- Is a member of a unitary group of corporations that files an Arizona return on a combined basis; or
- Is a member of an affiliated group of corporations that elects to file an Arizona consolidated return.
Corporations may use Form 120A if it files its return on a separate company (separate entity) basis and it is taxable entirely within Arizona.
- A corporation files on a separate company (separate entity) basis if:
- It is not part of a group of corporations comprising a unitary business; and
- It is not a member of an affiliated group that elected to file an Arizona consolidated return.
- A corporation that has income from business activity that is taxable entirely within Arizona is a “wholly Arizona corporation.”
- Do not use Form 120A to file an Arizona combined or consolidated return. Use Form 120
Corporations may use Form 120ES to make income tax liability payments by check or money order. (If payments are made electronically, do NOT submit Form 120ES.)
- Corporations expecting an Arizona income tax liability for the 2020 taxable year of $1,000 or more must make Arizona estimated income tax payments.
- Corporations making estimated tax payments for 2021 that expect a 2021 income tax liability of $500 or more must make Arizona estimated income tax payments using EFT.
Corporations may use Form 120X to amend corporate returns.
- Any taxpayer who files an amended return with the IRS must file an Arizona amended return on Form 120X within 90 days of final determination of the federal amended return by the IRS.
Returns are due by the 15th day of the fourth month following the close of the taxable year.
If the due date for the return falls on a Saturday, Sunday, or a legal holiday, the return is considered timely filed if it is post-marked the next business day.
All corporations required to make Arizona estimated income tax payments must make those payments by the 15th day of the 4th, 6th, 9th, and 12th months of their taxable year.