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 documentation do I need to support a claim on Form 140PTC?
Taxpayers should maintain records verifying rent paid or property taxes assessed and paid. Homeowners must keep county property tax statements, while renters should obtain receipts or landlord statements itemizing rent amounts per month. Arizona may request verification during processing, especially when the credit claimed is high relative to income. Taxpayers who receive SSI or other benefits should also retain award letters proving eligibility. Additional explanation and examples for documentation appear on the reference page for AZ-140PTC.
Project next year’s take-home in Arizona?
Switch the year in the calculator; rates/thresholds update automatically.
Do charitable contributions affect Schedule A(NR) differently for nonresidents?
Charitable contributions reported on Schedule A(NR) are included as part of total itemized deductions before applying the Arizona nonresident ratio. This differs from resident forms such as the 140, where charitable contributions may also influence the standard deduction increase worksheet. Nonresidents do not receive the separate charitable increase because Form 140NR applies the ratio instead. Taxpayers wanting to compare outcomes between itemizing and taking the standard deduction can do so using the Arizona nonresident calculator at Form 140NR.
What if I live in Arizona but work in another state?
The work state may tax those wages. Claim a credit on your Arizona return where eligible. Model it in the full calculator.
Can taxpayers claim both the Arizona and federal foreign tax credits?
Yes, Arizona residents may claim both, but they must coordinate claims carefully. If a taxpayer takes a foreign tax deduction on their federal return instead of a federal credit, Arizona generally requires them to reverse that deduction before applying the Arizona credit. Likewise, if the foreign tax is refunded after filing, both federal and Arizona returns may require amendments. For step-by-step examples, see the guidance linked on the AZ-309 calculator page.
Important Notes
All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.