Arizona Form 140NR – Nonresident Personal Income Tax Return

Last reviewed: 2025-11-16

Use the Arizona Tax Form Calculator Form 140NR: Arizona Nonresident Personal Income Tax Return 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 140NR is the official nonresident individual income tax return used to report Arizona-sourced income and determine a nonresident’s tax liability. While nonresidents do not pay tax on income earned outside Arizona, they must file Form 140NR if they received wages, business income, rental income, gambling winnings or other taxable income from Arizona sources. The form also applies to part-year residents who choose to file as nonresidents, though most part-year filers instead use Form 140PY.

Form 140NR differs from the resident return (Form 140) because it requires a detailed calculation of Arizona income, federal income, and the nonresident allocation ratio. This ratio determines the percentage of overall income that is taxable to Arizona. Most credits and exemptions are prorated using this ratio, and the return includes separate sections for additions, subtractions, exemptions, standard deductions, deductions for charitable contributions, gifts, penalties and refundable/nonrefundable credits. The form ensures that only Arizona-source activity affects a nonresident’s ultimate tax due.

How Form 140NR Works

Arizona uses a structured, multi-step approach to compute nonresident income tax. The return is divided into income identification, additions, subtractions, allocation, exemptions, deductions, tax, credits, payments and final balancing. Below are the main components taxpayers will complete:

1. Report federal adjusted gross income (AGI): This is the baseline amount used to determine the nonresident ratio. It appears on line 1.
2. Identify Arizona-source income: Lines 2a–2e require wage, dividend, business, rental and other income earned specifically in Arizona. These items determine the Arizona gross income subtotal on line 3.
3. Apply additions and subtractions: Certain federally excluded income, Arizona adjustments, pension subtractions, lottery subtractions and long-term capital gain subtractions are applied on lines 4–11.
4. Compute adjusted federal and Arizona income: Form 140NR creates parity between federal AGI and the Arizona-modified AGI before applying the nonresident ratio.
5. Calculate the nonresident allocation ratio: The ratio on line 16 equals Arizona income (line 3) divided by federal AGI (line 1) and is capped at 1.00. This ratio drives prorated exemptions, deductions and certain credits.
6. Determine exemptions and prorated exemption amounts: Separately entered age 65, blind, dependent and parent/grandparent exemptions are calculated on the worksheet and prorated using the allocation ratio.
7. Apply standard deductions and charitable contribution increases: Arizona uses fixed standard deduction amounts, and nonresidents may also claim a proportional increase based on charitable contributions (0.33 × allowable contributions).
8. Calculate Arizona taxable income and tax: After subtracting deductions and ratio-adjusted exemptions, the taxpayer applies the flat Arizona tax rate (2.5%) to compute tax liability on line 28.
9. Apply credits: Nonrefundable credits, the family income tax credit and dependent credits reduce tax, followed by refundable credits and withholding payments.
10. Determine tax due or refund: The return offsets tax with withholding, estimated payments, refundable credits and extension payments to compute either a balance due or refund. The form also includes voluntary gifts and penalty sections similar to the resident return.

Taxpayers must ensure they correctly identify all Arizona-source income and accurately compute the allocation ratio. Errors in this area can significantly affect the prorated deduction and exemption amounts, leading to incorrect tax results.

Understanding Arizona Nonresident Tax Rules

Arizona’s nonresident tax system ensures that individuals pay tax only on income connected to Arizona while allowing proportional benefits from deductions and exemptions. This prevents nonresidents from receiving full deductions on income that was not generated in the state. The allocation ratio is central to this system, mathematically allocating allowable deductions, standard deductions and exemptions based on Arizona-source income as a share of overall federal income.

Nonresidents commonly encounter questions about which income is considered Arizona-source. As a short guideline, Arizona taxes:

• Employment income earned within Arizona
• Business income from Arizona operations
• Rent from Arizona real property
• Partnership/S-corp pass-through income sourced to Arizona
• Gambling winnings from Arizona casinos

The form’s worksheets—covering dependent credits, exemption calculations and deduction increases—guide taxpayers in computing amounts that ultimately affect total tax or refunds. This calculator replicates each worksheet and all main lines in full, giving nonresidents a precise and transparent tool for preparing their Arizona nonresident return.

Additional Resources

• Arizona Department of Revenue
• Arizona Form 140 – Resident Tax Calculator
• Arizona Form 140A – Short Form Calculator
• Arizona Form 140EZ – EZ Form Calculator

Arizona nonresident taxpayers should review Form 140NR annually, as sourcing rules, deductions, credits and limitations may change. Using the calculator ensures accurate proration, correct application of deductions and reliable final tax or refund results.

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Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.