Arizona Form 309 – Credit for Taxes Paid to Another Country
Last reviewed: 2025-11-16
Use the Arizona Tax Form Calculator Form 309: Credit for Taxes Paid to Another Country as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 Arizona state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.
Arizona Form 309 is used by individuals who paid income tax to a foreign country and want to claim a credit against their Arizona income tax. This prevents the same income being taxed twice—once by the foreign country and again by Arizona. The form calculates the allowable credit based on the actual foreign tax paid and the portion of Arizona tax that relates to the foreign-sourced income. Foreign taxes exceeding the limit may be carried forward for up to five years.
This calculator reproduces the full structure of Form 309 so taxpayers can understand the interaction between foreign taxes, Arizona taxable income, and the maximum credit permitted under Arizona law.
How Arizona Form 309 Works
The foreign tax credit is determined through a multi-step process designed to align with Arizona’s rules for cross-border taxation. The form ensures that only the foreign tax relating to income taxed by Arizona can be claimed as a credit. Key components include:
- Foreign country or U.S. possession identification – Taxpayers list the country where tax was paid and the type of foreign income received.
- Foreign tax paid – The credit begins with the total foreign income tax paid during the year (line 4).
- Foreign-source Arizona income – Lines 5–7 determine the portion of total income attributable to the foreign country.
- Limitation calculation – Arizona allows a credit only up to the amount of Arizona tax that can be attributed to foreign-source income. This limitation is computed on line 8.
- Allowable credit – The final credit is the lesser of foreign tax paid or the Arizona limitation (line 11).
- Carryforward – If foreign tax exceeds the permitted limit, the unused portion may be carried forward for up to 5 years and applied to future returns (line 12).
Form 309 does not affect federal foreign tax credits. It applies only to Arizona state income tax, and taxpayers may claim both federal and Arizona foreign tax credits where available.
| Note: This form does not contain computations that can be automated. It is provided here for reference so taxpayers can review the structure and required fields before completing and attaching the official form. You must use the official Arizona DOR form when filing. | ||
| Part 1 — Foreign Income and Taxes Paid | ||
|---|---|---|
| 1 | Country to which tax was paid | |
| 2 | Type of foreign income | |
| 3 | Foreign gross income | |
| 4 | Foreign tax paid (converted to USD) | |
| Part 2 — Arizona Tax Attributable to Foreign Income | ||
| 5 | Arizona taxable income before exemptions | |
| 6 | Arizona taxable income attributable to foreign income | |
| 7 | Arizona tax before credits | |
| 8 | Arizona tax attributable to foreign income (line 7 × (line 6 ÷ line 5)) | |
| Part 3 — Credit Allowed | ||
| 9 | Foreign tax paid (from line 4) | |
| 10 | Arizona tax attributable to foreign income (from line 8) | |
| 11 | Credit allowed for 2024 (smaller of line 9 or line 10) | |
| Part 4 — Carryforward of Excess Credit | ||
| 12 | Excess credit (line 9 − line 10, if > 0) | |
| 13 | Credit carryforward from prior years (up to 5 years) | |
| 14 | Total carryforward available | |
| Part 5 — Total Credit to Form 301 | ||
| 15 | Total credit to claim on Form 301 | |
Understanding the Arizona Foreign Tax Limitation
Arizona restricts the credit to ensure that the state only offsets tax attributable to income that is both earned abroad and taxable by Arizona. The limitation formula compares foreign-source income to total income and then applies that ratio to Arizona tax. This prevents situations where taxpayers could apply foreign taxes paid on non-Arizona-sourced income.
Foreign tax credits most commonly apply to wages earned overseas, foreign consulting income, rental income from foreign property, and foreign investment income where tax was withheld abroad. Taxpayers should retain documentation such as foreign payslips, tax withholding certificates, or foreign tax assessments to support the credit.
Last reviewed: 2025-11-16: If you believe this form requires an update, please contact us.
Additional Arizona International Tax Resources
- Arizona Department of Revenue – Foreign Tax Credit Information
- Arizona Form 301 – Nonrefundable Credits Summary
- Arizona Form 140 – Resident Tax Return
Review Arizona’s foreign tax credit rules each year, as credit limitations and carryforward provisions may change. This calculator provides a clear, line-by-line way to understand your allowable foreign tax credit.
Quick Access Tools
Frequently Asked Questions
What is Arizona Form 140EZ and who is eligible to file it?
Arizona Form 140EZ is the simplest of all Arizona resident income tax returns. It is specifically designed for full-year residents with very basic tax situations—typically wage earners or retirees whose income and deductions require no adjustments or additional schedules. Form 140EZ supports only a limited range of income types and does not allow itemized deductions, business income, capital gains adjustments, Arizona additions, or complex credits. Taxpayers eligible for Form 140EZ must meet strict criteria, including filing as Single or Married Filing Jointly, having only basic income sources, and claiming the standard deduction. It is ideal for those who want a quick and streamlined method to file their Arizona taxes without navigating the complexity of longer forms.
How do credits interact with amended returns filed using Form 140X?
Credits must be recalculated as if the return were being filed for the first time. If the amendment increases income or changes filing status, previously claimed credits may decrease. If the amendment adds a missed credit—such as those calculated on Forms 321, 322, 323 or 348—taxpayers should attach the full credit form to the amended return. Unused credits with carryforward provisions may need adjustment across multiple years.
Can Form 131 be used when amending a deceased taxpayer’s prior-year return?
Yes. If a deceased taxpayer is owed money from an amended return—such as correcting income, claiming a missed credit or adjusting withholding—the claimant must resubmit Form 131 with the amended return. The Arizona Department of Revenue requires the form each time a refund is issued, even if one was previously accepted for another year. Guidance on pairing Form 131 with amended returns can be reviewed alongside the amended return calculator at Arizona Form 140X.
Does Form 140EZ allow itemized deductions or only the standard deduction?
Form 140EZ only permits the standard deduction. Itemized deductions—including mortgage interest, medical expenses, property taxes, charitable contributions, and other Schedule A items—cannot be claimed on this form. The Form 140EZ standard deduction is predefined based on filing status and does not allow for additional increases such as charitable deduction boosts available on other forms. Taxpayers who wish to itemize must instead file Form 140.
What are the annual credit limits for QFCO contributions?
Arizona sets distinct limits for Single/HOH/MFS filers and for Married Filing Jointly. Taxpayers may claim only up to the allowable limit. Any contributions above that limit cannot be refunded but may be carried forward for up to five years. These limits are separate from those used for QCO contributions (Form 321), meaning taxpayers can claim both credits in the same tax year.
Important Notes
All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.