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1040ez 2012 Tax Form

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1040ez 2012 Tax Form

1040ez 2012 tax form 32. 1040ez 2012 tax form   Child and Dependent Care Credit Table of Contents Reminders Introduction Useful Items - You may want to see: Tests To Claim the CreditQualifying Person Test Earned Income Test Work-Related Expense Test Joint Return Test Provider Identification Test How To Figure the CreditFiguring Total Work-Related Expenses Earned Income Limit Dollar Limit Amount of Credit How To Claim the CreditTax credit not refundable. 1040ez 2012 tax form Employment Taxes for Household Employers Reminders Taxpayer identification number needed for each qualifying person. 1040ez 2012 tax form  You must include on line 2 of Form 2441 the name and taxpayer identification number (generally the social security number) of each qualifying person. 1040ez 2012 tax form See Taxpayer identification number under Qualifying Person Test, later. 1040ez 2012 tax form You may have to pay employment taxes. 1040ez 2012 tax form  If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer who has to pay employment taxes. 1040ez 2012 tax form Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. 1040ez 2012 tax form See Employment Taxes for Household Employers , later. 1040ez 2012 tax form Introduction This chapter discusses the credit for child and dependent care expenses and covers the following topics. 1040ez 2012 tax form Tests you must meet to claim the credit. 1040ez 2012 tax form How to figure the credit. 1040ez 2012 tax form How to claim the credit. 1040ez 2012 tax form Employment taxes you may have to pay as a household employer. 1040ez 2012 tax form You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. 1040ez 2012 tax form The credit can be up to 35% of your expenses. 1040ez 2012 tax form To qualify, you must pay these expenses so you can work or look for work. 1040ez 2012 tax form This credit should not be confused with the child tax credit discussed in chapter 34. 1040ez 2012 tax form Dependent care benefits. 1040ez 2012 tax form   If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of them. 1040ez 2012 tax form You must complete Form 2441, Part III, before you can figure the amount of your credit. 1040ez 2012 tax form See Dependent Care Benefits under How To Figure the Credit, later. 1040ez 2012 tax form Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 503 Child and Dependent Care Expenses 926 Household Employer's Tax Guide Form (and Instructions) 2441 Child and Dependent Care Expenses Schedule H (Form 1040) Household Employment Taxes W-7 Application for IRS Individual Taxpayer Identification Number W-10 Dependent Care Provider's Identification and Certification Tests To Claim the Credit To be able to claim the credit for child and dependent care expenses, you must file Form 1040 or Form 1040A, not Form 1040EZ, and meet all the following tests. 1040ez 2012 tax form The care must be for one or more qualifying persons who are identified on Form 2441. 1040ez 2012 tax form (See Qualifying Person Test . 1040ez 2012 tax form ) You (and your spouse if filing jointly) must have earned income during the year. 1040ez 2012 tax form (However, see Rule for student-spouse or spouse not able to care for self under Earned Income Test, later. 1040ez 2012 tax form ) You must pay child and dependent care expenses so you (and your spouse if filing jointly) can work or look for work. 1040ez 2012 tax form (See Work-Related Expense Test , later. 1040ez 2012 tax form ) You must make payments for child and dependent care to someone you (and your spouse) cannot claim as a dependent. 1040ez 2012 tax form If you make payments to your child, he or she cannot be your dependent and must be age 19 or older by the end of the year. 1040ez 2012 tax form You cannot make payments to: Your spouse, or The parent of your qualifying person if your qualifying person is your child and under age 13. 1040ez 2012 tax form (See Payments to Relatives or Dependents under Work-Related Expense Test, later. 1040ez 2012 tax form ) Your filing status may be single, head of household, or qualifying widow(er) with dependent child. 1040ez 2012 tax form If you are married, you must file a joint return, unless an exception applies to you. 1040ez 2012 tax form (See Joint Return Test , later. 1040ez 2012 tax form ) You must identify the care provider on your tax return. 1040ez 2012 tax form (See Provider Identification Test , later. 1040ez 2012 tax form ) If you exclude or deduct dependent care benefits provided by a dependent care benefits plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $3,000 if one qualifying person was cared for or $6,000 if two or more qualifying persons were cared for). 1040ez 2012 tax form (If two or more qualifying persons were cared for, the amount you exclude or deduct will always be less than the dollar limit, since the total amount you can exclude or deduct is limited to $5,000. 1040ez 2012 tax form See Reduced Dollar Limit under How To Figure the Credit, later. 1040ez 2012 tax form ) These tests are presented in Figure 32-A and are also explained in detail in this chapter. 1040ez 2012 tax form Figure 32-A. 1040ez 2012 tax form Can You Claim the Credit? Please click here for the text description of the image. 1040ez 2012 tax form Figure 32-A Can You Claim the Credit? Qualifying Person Test Your child and dependent care expenses must be for the care of one or more qualifying persons. 1040ez 2012 tax form A qualifying person is: Your qualifying child who is your dependent and who was under age 13 when the care was provided (but see Child of divorced or separated parents or parents living apart, later), Your spouse who was not physically or mentally able to care for himself or herself and lived with you for more than half the year, or A person who was not physically or mentally able to care for himself or herself, lived with you for more than half the year, and either: Was your dependent, or Would have been your dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. 1040ez 2012 tax form Dependent defined. 1040ez 2012 tax form   A dependent is a person, other than you or your spouse, for whom you can claim an exemption. 1040ez 2012 tax form To be your dependent, a person must be your qualifying child (or your qualifying relative). 1040ez 2012 tax form Qualifying child. 1040ez 2012 tax form   To be your qualifying child, a child must live with you for more than half the year and meet other requirements. 1040ez 2012 tax form More information. 1040ez 2012 tax form   For more information about who is a dependent or a qualifying child, see chapter 3. 1040ez 2012 tax form Physically or mentally not able to care for oneself. 1040ez 2012 tax form   Persons who cannot dress, clean, or feed themselves because of physical or mental problems are considered not able to care for themselves. 1040ez 2012 tax form Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves. 1040ez 2012 tax form Person qualifying for part of year. 1040ez 2012 tax form   You determine a person's qualifying status each day. 1040ez 2012 tax form For example, if the person for whom you pay child and dependent care expenses no longer qualifies on September 16, count only those expenses through September 15. 1040ez 2012 tax form Also see Yearly limit under Dollar Limit, later. 1040ez 2012 tax form Birth or death of otherwise qualifying person. 1040ez 2012 tax form   In determining whether a person is a qualifying person, a person who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the person's home for more than half the time he or she was alive in 2013. 1040ez 2012 tax form Taxpayer identification number. 1040ez 2012 tax form   You must include on your return the name and taxpayer identification number (generally the social security number) of the qualifying person(s). 1040ez 2012 tax form If the correct information is not shown, the credit may be reduced or disallowed. 1040ez 2012 tax form Individual taxpayer identification number (ITIN) for aliens. 1040ez 2012 tax form   If your qualifying person is a nonresident or resident alien who does not have and cannot get a social security number (SSN), use that person's ITIN. 1040ez 2012 tax form The ITIN is entered wherever an SSN is requested on a tax return. 1040ez 2012 tax form To apply for an ITIN, see Form W-7. 1040ez 2012 tax form   An ITIN is for tax use only. 1040ez 2012 tax form It does not entitle the holder to social security benefits or change the holder's employment or immigration status under U. 1040ez 2012 tax form S. 1040ez 2012 tax form law. 1040ez 2012 tax form Adoption taxpayer identification number (ATIN). 1040ez 2012 tax form   If your qualifying person is a child who was placed in your home for adoption and for whom you do not have an SSN, you must get an ATIN for the child. 1040ez 2012 tax form File Form W-7A, Application for Taxpayer Identification Number for Pending U. 1040ez 2012 tax form S. 1040ez 2012 tax form Adoptions. 1040ez 2012 tax form Child of divorced or separated parents or parents living apart. 1040ez 2012 tax form   Even if you cannot claim your child as a dependent, he or she is treated as your qualifying person if: The child was under age 13 or was not physically or mentally able to care for himself or herself, The child received over half of his or her support during the calendar year from one or both parents who are divorced or legally separated under a decree of divorce or separate maintenance, are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year, The child was in the custody of one or both parents for more than half the year, and You were the child's custodial parent. 1040ez 2012 tax form   The custodial parent is the parent with whom the child lived for the greater number of nights in 2013. 1040ez 2012 tax form If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. 1040ez 2012 tax form For details and an exception for a parent who works at night, see Pub. 1040ez 2012 tax form 501. 1040ez 2012 tax form   The noncustodial parent cannot treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents. 1040ez 2012 tax form Earned Income Test To claim the credit, you (and your spouse if filing jointly) must have earned income during the year. 1040ez 2012 tax form Earned income. 1040ez 2012 tax form   Earned income includes wages, salaries, tips, other taxable employee compensation, and net earnings from self-employment. 1040ez 2012 tax form A net loss from self-employment reduces earned income. 1040ez 2012 tax form Earned income also includes strike benefits and any disability pay you report as wages. 1040ez 2012 tax form   Generally, only taxable compensation is included. 1040ez 2012 tax form However, you can elect to include nontaxable combat pay in earned income. 1040ez 2012 tax form If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. 1040ez 2012 tax form (In other words, if one of you makes the election, the other one can also make it but does not have to. 1040ez 2012 tax form ) You should figure your credit both ways and make the election if it gives you a greater tax benefit. 1040ez 2012 tax form Members of certain religious faiths opposed to social security. 1040ez 2012 tax form   Certain income earned by persons who are members of certain religious faiths that are opposed to participation in Social Security Act programs and have an IRS-approved form that exempts certain income from social security and Medicare taxes may not be considered earned income for this purpose. 1040ez 2012 tax form See Earned Income Test in Publication 503. 1040ez 2012 tax form Not earned income. 1040ez 2012 tax form   Earned income does not include: Pensions and annuities, Social security and railroad retirement benefits, Workers' compensation, Interest and dividends, Unemployment compensation, Scholarship or fellowship grants, except for those reported on a Form W-2 and paid to you for teaching or other services, Nontaxable workfare payments, Child support payments received by you, Income of nonresident aliens that is not effectively connected with a U. 1040ez 2012 tax form S. 1040ez 2012 tax form trade or business, or Any amount received for work while an inmate in a penal institution. 1040ez 2012 tax form Rule for student-spouse or spouse not able to care for self. 1040ez 2012 tax form   Your spouse is treated as having earned income for any month that he or she is: A full-time student, or Physically or mentally not able to care for himself or herself. 1040ez 2012 tax form (Your spouse also must live with you for more than half the year. 1040ez 2012 tax form )   If you are filing a joint return, this rule also applies to you. 1040ez 2012 tax form You can be treated as having earned income for any month you are a full-time student or not able to care for yourself. 1040ez 2012 tax form   Figure the earned income of the nonworking spouse described under (1) or (2) above as explained under Earned Income Limit , later. 1040ez 2012 tax form   This rule applies to only one spouse for any one month. 1040ez 2012 tax form If, in the same month, both you and your spouse do not work and are either full-time students or not physically or mentally able to care for yourselves, only one of you can be treated as having earned income in that month. 1040ez 2012 tax form Full-time student. 1040ez 2012 tax form   You are a full-time student if you are enrolled at a school for the number of hours or classes that the school considers full time. 1040ez 2012 tax form You must have been a full-time student for some part of each of 5 calendar months during the year. 1040ez 2012 tax form (The months need not be consecutive. 1040ez 2012 tax form ) School. 1040ez 2012 tax form   The term “school” includes high schools, colleges, universities, and technical, trade, and mechanical schools. 1040ez 2012 tax form A school does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. 1040ez 2012 tax form Work-Related Expense Test Child and dependent care expenses must be work-related to qualify for the credit. 1040ez 2012 tax form Expenses are considered work-related only if both of the following are true. 1040ez 2012 tax form They allow you (and your spouse if filing jointly) to work or look for work. 1040ez 2012 tax form They are for a qualifying person's care. 1040ez 2012 tax form Working or Looking for Work To be work-related, your expenses must allow you to work or look for work. 1040ez 2012 tax form If you are married, generally both you and your spouse must work or look for work. 1040ez 2012 tax form One spouse is treated as working during any month he or she is a full-time student or is not physically or mentally able to care for himself or herself. 1040ez 2012 tax form Your work can be for others or in your own business or partnership. 1040ez 2012 tax form It can be either full time or part time. 1040ez 2012 tax form Work also includes actively looking for work. 1040ez 2012 tax form However, if you do not find a job and have no earned income for the year, you cannot take this credit. 1040ez 2012 tax form See Earned Income Test , earlier. 1040ez 2012 tax form An expense is not considered work-related merely because you had it while you were working. 1040ez 2012 tax form The purpose of the expense must be to allow you to work. 1040ez 2012 tax form Whether your expenses allow you to work or look for work depends on the facts. 1040ez 2012 tax form Example 1. 1040ez 2012 tax form The cost of a babysitter while you and your spouse go out to eat is not normally a work-related expense. 1040ez 2012 tax form Example 2. 1040ez 2012 tax form You work during the day. 1040ez 2012 tax form Your spouse works at night and sleeps during the day. 1040ez 2012 tax form You pay for care of your 5-year-old child during the hours when you are working and your spouse is sleeping. 1040ez 2012 tax form Your expenses are considered work-related. 1040ez 2012 tax form Volunteer work. 1040ez 2012 tax form    For this purpose, you are not considered to be working if you do unpaid volunteer work or volunteer work for a nominal salary. 1040ez 2012 tax form Work for part of year. 1040ez 2012 tax form   If you work or actively look for work during only part of the period covered by the expenses, then you must figure your expenses for each day. 1040ez 2012 tax form For example, if you work all year and pay care expenses of $250 a month ($3,000 for the year), all the expenses are work-related. 1040ez 2012 tax form However, if you work or look for work for only 2 months and 15 days during the year and pay expenses of $250 a month, your work-related expenses are limited to $625 (2½ months × $250). 1040ez 2012 tax form Temporary absence from work. 1040ez 2012 tax form   You do not have to figure your expenses for each day during a short, temporary absence from work, such as for vacation or a minor illness, if you have to pay for care anyway. 1040ez 2012 tax form Instead, you can figure your credit including the expenses you paid for the period of absence. 1040ez 2012 tax form   An absence of 2 weeks or less is a short, temporary absence. 1040ez 2012 tax form An absence of more than 2 weeks may be considered a short, temporary absence, depending on the circumstances. 1040ez 2012 tax form Example. 1040ez 2012 tax form You pay a nanny to care for your 2-year-old son and 4-year-old daughter so you can work. 1040ez 2012 tax form You become ill and miss 4 months of work but receive sick pay. 1040ez 2012 tax form You continue to pay the nanny to care for the children while you are ill. 1040ez 2012 tax form Your absence is not a short, temporary absence, and your expenses are not considered work-related. 1040ez 2012 tax form Part-time work. 1040ez 2012 tax form   If you work part-time, you generally must figure your expenses for each day. 1040ez 2012 tax form However, if you have to pay for care weekly, monthly, or in another way that includes both days worked and days not worked, you can figure your credit including the expenses you paid for days you did not work. 1040ez 2012 tax form Any day when you work at least 1 hour is a day of work. 1040ez 2012 tax form Example 1. 1040ez 2012 tax form You work 3 days a week. 1040ez 2012 tax form While you work, your 6-year-old child attends a dependent care center, which complies with all state and local regulations. 1040ez 2012 tax form You can pay the center $150 for any 3 days a week or $250 for 5 days a week. 1040ez 2012 tax form Your child attends the center 5 days a week. 1040ez 2012 tax form Your work-related expenses are limited to $150 a week. 1040ez 2012 tax form Example 2. 1040ez 2012 tax form The facts are the same as in Example 1 except the center does not offer a 3-day option. 1040ez 2012 tax form The entire $250 weekly fee may be a work-related expense. 1040ez 2012 tax form Care of a Qualifying Person To be work-related, your expenses must be to provide care for a qualifying person. 1040ez 2012 tax form You do not have to choose the least expensive way of providing care. 1040ez 2012 tax form The cost of a paid care provider may be an expense for the care of a qualifying person even if another care provider is available at no cost. 1040ez 2012 tax form Expenses are for the care of a qualifying person only if their main purpose is the person's well-being and protection. 1040ez 2012 tax form Expenses for household services qualify if part of the services is for the care of qualifying persons. 1040ez 2012 tax form See Household services , later. 1040ez 2012 tax form Expenses not for care. 1040ez 2012 tax form   Expenses for care do not include amounts you pay for food, lodging, clothing, education, and entertainment. 1040ez 2012 tax form However, you can include small amounts paid for these items if they are incidental to and cannot be separated from the cost of caring for the qualifying person. 1040ez 2012 tax form   Child support payments are not for care and do not qualify for the credit. 1040ez 2012 tax form Education. 1040ez 2012 tax form   Expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are expenses for care. 1040ez 2012 tax form Expenses to attend kindergarten or a higher grade are not expenses for care. 1040ez 2012 tax form Do not use these expenses to figure your credit. 1040ez 2012 tax form   However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be expenses for care. 1040ez 2012 tax form   Summer school and tutoring programs are not for care. 1040ez 2012 tax form Example 1. 1040ez 2012 tax form You take your 3-year-old child to a nursery school that provides lunch and educational activities as a part of its preschool childcare service. 1040ez 2012 tax form The lunch and educational activities are incidental to the childcare, and their cost cannot be separated from the cost of care. 1040ez 2012 tax form You can count the total cost when you figure the credit. 1040ez 2012 tax form Example 2. 1040ez 2012 tax form You place your 10-year-old child in a boarding school so you can work full time. 1040ez 2012 tax form Only the part of the boarding school expense that is for the care of your child is a work-related expense. 1040ez 2012 tax form You can count that part of the expense in figuring your credit if it can be separated from the cost of education. 1040ez 2012 tax form You cannot count any part of the amount you pay the school for your child's education. 1040ez 2012 tax form Care outside your home. 1040ez 2012 tax form   You can count the cost of care provided outside your home if the care is for your dependent under age 13 or any other qualifying person who regularly spends at least 8 hours each day in your home. 1040ez 2012 tax form Dependent care center. 1040ez 2012 tax form   You can count care provided outside your home by a dependent care center only if the center complies with all state and local regulations that apply to these centers. 1040ez 2012 tax form   A dependent care center is a place that provides care for more than six persons (other than persons who live there) and receives a fee, payment, or grant for providing services for any of those persons, even if the center is not run for profit. 1040ez 2012 tax form Camp. 1040ez 2012 tax form   The cost of sending your child to an overnight camp is not considered a work-related expense. 1040ez 2012 tax form The cost of sending your child to a day camp may be a work-related expense, even if the camp specializes in a particular activity, such as computers or soccer. 1040ez 2012 tax form Transportation. 1040ez 2012 tax form   If a care provider takes a qualifying person to or from a place where care is provided, that transportation is for the care of the qualifying person. 1040ez 2012 tax form This includes transportation by bus, subway, taxi, or private car. 1040ez 2012 tax form However, transportation not provided by a care provider is not for the care of a qualifying person. 1040ez 2012 tax form Also, if you pay the transportation cost for the care provider to come to your home, that expense is not for care of a qualifying person. 1040ez 2012 tax form Fees and deposits. 1040ez 2012 tax form   Fees you paid to an agency to get the services of a care provider, deposits you paid to an agency or preschool, application fees, and other indirect expenses are work-related expenses if you have to pay them to get care, even though they are not directly for care. 1040ez 2012 tax form However, a forfeited deposit is not for the care of a qualifying person if care is not provided. 1040ez 2012 tax form Example 1. 1040ez 2012 tax form You paid a fee to an agency to get the services of the nanny who cares for your 2-year-old daughter while you work. 1040ez 2012 tax form The fee you paid is a work-related expense. 1040ez 2012 tax form Example 2. 1040ez 2012 tax form You placed a deposit with a preschool to reserve a place for your 3-year-old child. 1040ez 2012 tax form You later sent your child to a different preschool and forfeited the deposit. 1040ez 2012 tax form The forfeited deposit is not for care and so is not a work-related expense. 1040ez 2012 tax form Household services. 1040ez 2012 tax form   Expenses you pay for household services meet the work-related expense test if they are at least partly for the well-being and protection of a qualifying person. 1040ez 2012 tax form   Household services are ordinary and usual services done in and around your home that are necessary to run your home. 1040ez 2012 tax form They include the services of a housekeeper, maid, or cook. 1040ez 2012 tax form However, they do not include the services of a chauffeur, bartender, or gardener. 1040ez 2012 tax form See Household Services in Publication 503 for more information. 1040ez 2012 tax form   In this chapter, the term housekeeper refers to any household employee whose services include the care of a qualifying person. 1040ez 2012 tax form Taxes paid on wages. 1040ez 2012 tax form   The taxes you pay on wages for qualifying child and dependent care services are work-related expenses. 1040ez 2012 tax form See Employment Taxes for Household Employers , later. 1040ez 2012 tax form Payments to Relatives or Dependents You can count work-related payments you make to relatives who are not your dependents, even if they live in your home. 1040ez 2012 tax form However, do not count any amounts you pay to: A dependent for whom you (or your spouse if filing jointly) can claim an exemption, Your child who was under age 19 at the end of the year, even if he or she is not your dependent, A person who was your spouse any time during the year, or The parent of your qualifying person if your qualifying person is your child and under age 13. 1040ez 2012 tax form Joint Return Test Generally, married couples must file a joint return to take the credit. 1040ez 2012 tax form However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. 1040ez 2012 tax form Legally separated. 1040ez 2012 tax form   You are not considered married if you are legally separated from your spouse under a decree of divorce or separate maintenance. 1040ez 2012 tax form You may be eligible to take the credit on your return using head of household filing status. 1040ez 2012 tax form Married and living apart. 1040ez 2012 tax form   You are not considered married and are eligible to take the credit if all the following apply. 1040ez 2012 tax form You file a return apart from your spouse. 1040ez 2012 tax form Your home is the home of a qualifying person for more than half the year. 1040ez 2012 tax form You pay more than half the cost of keeping up your home for the year. 1040ez 2012 tax form Your spouse does not live in your home for the last 6 months of the year. 1040ez 2012 tax form Costs of keeping up a home. 1040ez 2012 tax form   The costs of keeping up a home normally include property taxes, mortgage interest, rent, utility charges, home repairs, insurance on the home, and food eaten at home. 1040ez 2012 tax form   The costs of keeping up a home do not include payments for clothing, education, medical treatment, vacations, life insurance, transportation, or mortgage principal. 1040ez 2012 tax form   They also do not include the purchase, permanent improvement, or replacement of property. 1040ez 2012 tax form For example, you cannot include the cost of replacing a water heater. 1040ez 2012 tax form However, you can include the cost of repairing a water heater. 1040ez 2012 tax form Death of spouse. 1040ez 2012 tax form   If your spouse died during the year and you do not remarry before the end of the year, you generally must file a joint return to take the credit. 1040ez 2012 tax form If you do remarry before the end of the year, the credit can be claimed on your deceased spouse's return. 1040ez 2012 tax form Provider Identification Test You must identify all persons or organizations that provide care for your child or dependent. 1040ez 2012 tax form Use Form 2441, Part I, to show the information. 1040ez 2012 tax form If you do not have any care providers and you are filing Form 2441 only to report taxable income in Part III, enter “none” in line 1, column (a). 1040ez 2012 tax form Information needed. 1040ez 2012 tax form   To identify the care provider, you must give the provider's: Name, Address, and Taxpayer identification number. 1040ez 2012 tax form   If the care provider is an individual, the taxpayer identification number is his or her social security number or individual taxpayer identification number. 1040ez 2012 tax form If the care provider is an organization, then it is the employer identification number (EIN). 1040ez 2012 tax form   You do not have to show the taxpayer identification number if the care provider is a tax-exempt organization (such as a church or school). 1040ez 2012 tax form In this case, enter “Tax-Exempt” in the space where Form 2441 asks for the number. 1040ez 2012 tax form   If you cannot provide all of the information or if the information is incorrect, you must be able to show that you used due diligence (discussed later) in trying to furnish the necessary information. 1040ez 2012 tax form Getting the information. 1040ez 2012 tax form   You can use Form W-10 to request the required information from the care provider. 1040ez 2012 tax form If you do not use Form W-10, you can get the information from one of the other sources listed in the instructions for Form W-10 including: A copy of the provider's social security card, A copy of the provider's completed Form W-4 if he or she is your household employee, A copy of the statement furnished by your employer if the provider is your employer's dependent care plan, or A letter or invoice from the provider if it shows the information. 1040ez 2012 tax form    You should keep this information with your tax records. 1040ez 2012 tax form Do not send Form W-10 (or other document containing this information) to the Internal Revenue Service. 1040ez 2012 tax form Due diligence. 1040ez 2012 tax form   If the care provider information you give is incorrect or incomplete, your credit may not be allowed. 1040ez 2012 tax form However, if you can show that you used due diligence in trying to supply the information, you can still claim the credit. 1040ez 2012 tax form   You can show due diligence by getting and keeping the provider's completed Form W-10 or one of the other sources of information just listed. 1040ez 2012 tax form Care providers can be penalized if they do not provide this information to you or if they provide incorrect information. 1040ez 2012 tax form Provider refusal. 1040ez 2012 tax form   If the provider refuses to give you their identifying information, you should report on Form 2441 whatever information you have (such as the name and address). 1040ez 2012 tax form Enter “See Attached Statement” in the columns calling for the information you do not have. 1040ez 2012 tax form Then attach a statement explaining that you requested the information from the care provider, but the provider did not give you the information. 1040ez 2012 tax form Be sure to write your name and social security number on this statement. 1040ez 2012 tax form The statement will show that you used due diligence in trying to furnish the necessary information. 1040ez 2012 tax form U. 1040ez 2012 tax form S. 1040ez 2012 tax form citizens and resident aliens living abroad. 1040ez 2012 tax form   If you are living abroad, your care provider may not have, and may not be required to get, a U. 1040ez 2012 tax form S. 1040ez 2012 tax form taxpayer identification number (for example, an SSN or EIN). 1040ez 2012 tax form If so, enter “LAFCP” (Living Abroad Foreign Care Provider) in the space for the care provider's taxpayer identification number. 1040ez 2012 tax form How To Figure the Credit Your credit is a percentage of your work-related expenses. 1040ez 2012 tax form Your expenses are subject to the earned income limit and the dollar limit. 1040ez 2012 tax form The percentage is based on your adjusted gross income. 1040ez 2012 tax form Figuring Total Work-Related Expenses To figure the credit for 2013 work-related expenses, count only those you paid by December 31, 2013. 1040ez 2012 tax form Expenses prepaid in an earlier year. 1040ez 2012 tax form   If you pay for services before they are provided, you can count the prepaid expenses only in the year the care is received. 1040ez 2012 tax form Claim the expenses for the later year as if they were actually paid in that later year. 1040ez 2012 tax form Expenses not paid until the following year. 1040ez 2012 tax form   Do not count 2012 expenses that you paid in 2013 as work-related expenses for 2013. 1040ez 2012 tax form You may be able to claim an additional credit for them on your 2013 return, but you must figure it separately. 1040ez 2012 tax form See Payments for prior year's expenses under Amount of Credit in Publication 503. 1040ez 2012 tax form    If you had expenses in 2013 that you did not pay until 2014, you cannot count them when figuring your 2013 credit. 1040ez 2012 tax form You may be able to claim a credit for them on your 2014 return. 1040ez 2012 tax form Expenses reimbursed. 1040ez 2012 tax form   If a state social services agency pays you a nontaxable amount to reimburse you for some of your child and dependent care expenses, you cannot count the expenses that are reimbursed as work-related expenses. 1040ez 2012 tax form Example. 1040ez 2012 tax form You paid work-related expenses of $3,000. 1040ez 2012 tax form You are reimbursed $2,000 by a state social services agency. 1040ez 2012 tax form You can use only $1,000 to figure your credit. 1040ez 2012 tax form Medical expenses. 1040ez 2012 tax form   Some expenses for the care of qualifying persons who are not able to care for themselves may qualify as work-related expenses and also as medical expenses. 1040ez 2012 tax form You can use them either way, but you cannot use the same expenses to claim both a credit and a medical expense deduction. 1040ez 2012 tax form   If you use these expenses to figure the credit and they are more than the earned income limit or the dollar limit, discussed later, you can add the excess to your medical expenses. 1040ez 2012 tax form However, if you use your total expenses to figure your medical expense deduction, you cannot use any part of them to figure your credit. 1040ez 2012 tax form    Amounts excluded from your income under your employer's dependent care benefits plan cannot be used to claim a medical expense deduction. 1040ez 2012 tax form Dependent Care Benefits If you receive dependent care benefits, your dollar limit for purposes of the credit may be reduced. 1040ez 2012 tax form See Reduced Dollar Limit , later. 1040ez 2012 tax form But, even if you cannot take the credit, you may be able to take an exclusion or deduction for the dependent care benefits. 1040ez 2012 tax form Dependent care benefits. 1040ez 2012 tax form   Dependent care benefits include: Amounts your employer paid directly to either you or your care provider for the care of your qualifying person while you work, The fair market value of care in a daycare facility provided or sponsored by your employer, and Pre-tax contributions you made under a dependent care flexible spending arrangement. 1040ez 2012 tax form Your salary may have been reduced to pay for these benefits. 1040ez 2012 tax form If you received benefits as an employee, they should be shown in box 10 of your Form W-2. 1040ez 2012 tax form See Statement for employee , later. 1040ez 2012 tax form Benefits you received as a partner should be shown in box 13 of your Schedule K-1 (Form 1065) with code O. 1040ez 2012 tax form Enter the amount of these benefits on Form 2441, Part III, line 12. 1040ez 2012 tax form Exclusion or deduction. 1040ez 2012 tax form   If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. 1040ez 2012 tax form Your employer can tell you whether your benefit plan qualifies. 1040ez 2012 tax form To claim the exclusion, you must complete Part III of Form 2441. 1040ez 2012 tax form You cannot use Form 1040EZ. 1040ez 2012 tax form   If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. 1040ez 2012 tax form Therefore, you would not get an exclusion from wages. 1040ez 2012 tax form Instead, you would get a deduction on Form 1040, Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. 1040ez 2012 tax form To claim the deduction, you must use Form 2441. 1040ez 2012 tax form   The amount you can exclude or deduct is limited to the smallest of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). 1040ez 2012 tax form The definition of earned income for the exclusion or deduction is the same as the definition used when figuring the credit except that earned income for the exclusion or deduction does not include any dependent care benefits you receive. 1040ez 2012 tax form See Earned Income Limit, later. 1040ez 2012 tax form    You can choose to include your nontaxable combat pay in earned income when figuring your exclusion or deduction, even if you choose not to include it in earned income for the earned income credit or the credit for child and dependent care expenses. 1040ez 2012 tax form Statement for employee. 1040ez 2012 tax form   Your employer must give you a Form W-2 (or similar statement) showing in box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. 1040ez 2012 tax form Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in box 1. 1040ez 2012 tax form Effect of exclusion on credit. 1040ez 2012 tax form   If you exclude dependent care benefits from your income, the amount of the excluded benefits: Is not included in your work-related expenses, and Reduces the dollar limit, discussed later. 1040ez 2012 tax form Earned Income Limit The amount of work-related expenses you use to figure your credit cannot be more than: Your earned income for the year if you are single at the end of the year, or The smaller of your or your spouse's earned income for the year if you are married at the end of the year. 1040ez 2012 tax form Earned income is defined under Earned Income Test , earlier. 1040ez 2012 tax form For purposes of item (2), use your spouse's earned income for the entire year, even if you were married for only part of the year. 1040ez 2012 tax form Separated spouse. 1040ez 2012 tax form   If you are legally separated or married and living apart from your spouse (as described under Joint Return Test , earlier), you are not considered married for purposes of the earned income limit. 1040ez 2012 tax form Use only your income in figuring the earned income limit. 1040ez 2012 tax form Surviving spouse. 1040ez 2012 tax form   If your spouse died during the year and you file a joint return as a surviving spouse, you may, but are not required to, take into account the earned income of your spouse who died during the year. 1040ez 2012 tax form Community property laws. 1040ez 2012 tax form   You should disregard community property laws when you figure earned income for this credit. 1040ez 2012 tax form You or your spouse is a student or not able to care for self. 1040ez 2012 tax form   Your spouse who is either a full-time student or not able to care for himself or herself is treated as having earned income. 1040ez 2012 tax form His or her earned income for each month is considered to be at least $250 if there is one qualifying person in your home, or at least $500 if there are two or more. 1040ez 2012 tax form Spouse works. 1040ez 2012 tax form   If your spouse works during that month, use the higher of $250 (or $500) or his or her actual earned income for that month. 1040ez 2012 tax form Spouse qualifies for part of month. 1040ez 2012 tax form    If your spouse is a full-time student or not able to care for himself or herself for only part of a month, the full $250 (or $500) still applies for that month. 1040ez 2012 tax form You are a student or not able to care for self. 1040ez 2012 tax form   These rules also apply if you are a student or not able to care for yourself and you are filing a joint return. 1040ez 2012 tax form For each month or part of a month you are a student or not able to care for yourself, your earned income is considered to be at least $250 (or $500). 1040ez 2012 tax form If you also work during that month, use the higher of $250 (or $500) or your actual earned income for that month. 1040ez 2012 tax form Both spouses qualify. 1040ez 2012 tax form   If, in the same month, both you and your spouse are either full-time students or not able to care for yourselves, only one spouse can be considered to have this earned income of $250 (or $500) for that month. 1040ez 2012 tax form Dollar Limit There is a dollar limit on the amount of your work-related expenses you can use to figure the credit. 1040ez 2012 tax form This limit is $3,000 for one qualifying person, or $6,000 for two or more qualifying persons. 1040ez 2012 tax form If you paid work-related expenses for the care of two or more qualifying persons, the applicable dollar limit is $6,000. 1040ez 2012 tax form This $6,000 limit does not need to be divided equally among them. 1040ez 2012 tax form For example, if your work-related expenses for the care of one qualifying person are $3,200 and your work-related expenses for another qualifying person are $2,800, you can use the total, $6,000, when figuring the credit. 1040ez 2012 tax form Yearly limit. 1040ez 2012 tax form   The dollar limit is a yearly limit. 1040ez 2012 tax form The amount of the dollar limit remains the same no matter how long, during the year, you have a qualifying person in your household. 1040ez 2012 tax form Use the $3,000 limit if you paid work-related expenses for the care of one qualifying person at any time during the year. 1040ez 2012 tax form Use $6,000 if you paid work-related expenses for the care of more than one qualifying person at any time during the year. 1040ez 2012 tax form Reduced Dollar Limit If you received dependent care benefits that you exclude or deduct from your income, you must subtract that amount from the dollar limit that applies to you. 1040ez 2012 tax form Your reduced dollar limit is figured on Form 2441, Part III. 1040ez 2012 tax form See Dependent Care Benefits , earlier, for information on excluding or deducting these benefits. 1040ez 2012 tax form Example 1. 1040ez 2012 tax form George is a widower with one child and earns $24,000 a year. 1040ez 2012 tax form He pays work-related expenses of $2,900 for the care of his 4-year-old child and qualifies to claim the credit for child and dependent care expenses. 1040ez 2012 tax form His employer pays an additional $1,000 under a dependent care benefit plan. 1040ez 2012 tax form This $1,000 is excluded from George's income. 1040ez 2012 tax form Although the dollar limit for his work-related expenses is $3,000 (one qualifying person), George figures his credit on only $2,000 of the $2,900 work-related expenses he paid. 1040ez 2012 tax form This is because his dollar limit is reduced as shown next. 1040ez 2012 tax form   George's Reduced Dollar Limit 1) Maximum allowable expenses for one qualifying person $3,000 2) Minus: Dependent care benefits George excludes from income −1,000 3) Reduced dollar limit on expenses George can use for the credit $2,000 Example 2. 1040ez 2012 tax form Randall is married and both he and his wife are employed. 1040ez 2012 tax form Each has earned income in excess of $6,000. 1040ez 2012 tax form They have two children, Anne and Andy, ages 2 and 4, who attend a daycare facility licensed and regulated by the state. 1040ez 2012 tax form Randall's work-related expenses are $6,000 for the year. 1040ez 2012 tax form Randall's employer has a dependent care assistance program as part of its cafeteria plan, which allows employees to make pre-tax contributions to a dependent care flexible spending arrangement. 1040ez 2012 tax form Randall has elected to take the maximum $5,000 exclusion from his salary to cover dependent care expenses through this program. 1040ez 2012 tax form Although the dollar limit for his work- related expenses is $6,000 (two or more qualifying persons), Randall figures his credit on only $1,000 of the $6,000 work-related expense paid. 1040ez 2012 tax form This is because his dollar limit is reduced as shown next. 1040ez 2012 tax form   Randall's Reduced Dollar Limit 1) Maximum allowable expenses for two qualifying persons $6,000 2) Minus: Dependent care benefits Randall selects from employer's cafeteria plan and excludes from income −5,000 3) Reduced dollar limit on expenses Randall can use for the credit $1,000 Amount of Credit To determine the amount of your credit, multiply your work-related expenses (after applying the earned income and dollar limits) by a percentage. 1040ez 2012 tax form This percentage depends on your adjusted gross income shown on Form 1040, line 38, or Form 1040A, line 22. 1040ez 2012 tax form The following table shows the percentage to use based on adjusted gross income. 1040ez 2012 tax form   IF your adjusted gross income is: THEN the percentage is:       Over   But not over         $0   $15,000   35%       15,000   17,000   34%       17,000   19,000   33%       19,000   21,000   32%       21,000   23,000   31%       23,000   25,000   30%       25,000   27,000   29%       27,000   29,000   28%       29,000   31,000   27%       31,000   33,000   26%       33,000   35,000   25%       35,000   37,000   24%       37,000   39,000   23%       39,000   41,000   22%       41,000   43,000   21%       43,000   No limit   20%   How To Claim the Credit To claim the credit, you can file Form 1040 or Form 1040A. 1040ez 2012 tax form You cannot claim the credit on Form 1040EZ. 1040ez 2012 tax form Form 1040 or 1040A. 1040ez 2012 tax form   You must complete Form 2441 and attach it to your Form 1040 or 1040A. 1040ez 2012 tax form Enter the credit on Form 1040, line 48, or Form 1040A, line 29. 1040ez 2012 tax form Limit on credit. 1040ez 2012 tax form   The amount of credit you can claim is generally limited to the amount of your tax. 1040ez 2012 tax form For more information, see the Instructions for Form 2441. 1040ez 2012 tax form Tax credit not refundable. 1040ez 2012 tax form   You cannot get a refund for any part of the credit that is more than this limit. 1040ez 2012 tax form Recordkeeping. 1040ez 2012 tax form You should keep records of your work-related expenses. 1040ez 2012 tax form Also, if your dependent or spouse is not able to care for himself or herself, your records should show both the nature and the length of the disability. 1040ez 2012 tax form Other records you should keep to support your claim for the credit are described earlier under Provider Identification Test . 1040ez 2012 tax form Employment Taxes for Household Employers If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer. 1040ez 2012 tax form If you are a household employer, you will need an employer identification number (EIN) and you may have to pay employment taxes. 1040ez 2012 tax form If the individuals who work in your home are self-employed, you are not liable for any of the taxes discussed in this section. 1040ez 2012 tax form Self-employed persons who are in business for themselves are not household employees. 1040ez 2012 tax form Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. 1040ez 2012 tax form If you use a placement agency that exercises control over what work is done and how it will be done by a babysitter or companion who works in your home, the worker is not your employee. 1040ez 2012 tax form This control could include providing rules of conduct and appearance and requiring regular reports. 1040ez 2012 tax form In this case, you do not have to pay employment taxes. 1040ez 2012 tax form But, if an agency merely gives you a list of sitters and you hire one from that list, and pay the sitter directly, the sitter may be your employee. 1040ez 2012 tax form If you have a household employee, you may be subject to: Social security and Medicare taxes, Federal unemployment tax, and Federal income tax withholding. 1040ez 2012 tax form Social security and Medicare taxes are generally withheld from the employee's pay and matched by the employer. 1040ez 2012 tax form Federal unemployment (FUTA) tax is paid by the employer only and provides for payments of unemployment compensation to workers who have lost their jobs. 1040ez 2012 tax form Federal income tax is withheld from the employee's total pay if the employee asks you to do so and you agree. 1040ez 2012 tax form For more information on a household employer's tax responsibilities, see Publication 926 and Schedule H (Form 1040) and its instructions. 1040ez 2012 tax form State employment tax. 1040ez 2012 tax form   You may also have to pay state unemployment tax. 1040ez 2012 tax form Contact your state unemployment tax office for information. 1040ez 2012 tax form You should also find out whether you need to pay or collect other state employment taxes or carry workers' compensation insurance. 1040ez 2012 tax form For a list of state unemployment tax agencies, visit the U. 1040ez 2012 tax form S. 1040ez 2012 tax form Department of Labor's website. 1040ez 2012 tax form A link to that website is in Publication 926, or you can find it with an online search. 1040ez 2012 tax form Prev  Up  Next   Home   More Online Publications
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Tax Information for Churches and Religious Organizations

Exemption Requirements - 501(c)(3) Organizations
A brief description of the requirements for exemption under IRC Section 501(c)(3).

Unrelated Business Income Tax
Unrelated business income tax requirements for tax-exempt organizations.

Filing Requirements
A brief description of annual filing requirements for tax-exempt churches and religious organizations.

The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations
Political Campaign Activity by section 501(c)(3) tax-exempt organizations

Special Rules Limiting IRS Authority to Audit a Church
Overview of rules on tax inquiries and examinations of churches.

Tax Information for Charitable Organizations
Tax information for charitable, religious, scientific, literary, and other organizations exempt under Internal Revenue Code ("IRC") section 501(c)(3).

Publication 4573, Group Exemptions
A publication describing, in question and answer format, the federal tax rules that apply to group rulings of exemption under Internal Revenue Code section 501.

Webinar for Churches and Religious Organizations
A survey of tax-exempt status for churches and religious organizations

Page Last Reviewed or Updated: 30-Mar-2014

The 1040ez 2012 Tax Form

1040ez 2012 tax form 35. 1040ez 2012 tax form   Education Credits Table of Contents Introduction Useful Items - You may want to see: Who Can Claim an Education Credit Qualified Education ExpensesNo Double Benefit Allowed Adjustments to Qualified Education Expenses Introduction For 2013, there are two tax credits available to persons who pay expenses for higher (postsecondary) education. 1040ez 2012 tax form They are: The American opportunity credit, and The lifetime learning credit. 1040ez 2012 tax form The chapter will present an overview of these education credits. 1040ez 2012 tax form To get the detailed information you will need to claim either of the credits, and for examples illustrating that information, see chapters 2 and 3 of Publication 970. 1040ez 2012 tax form Can you claim more than one education credit this year?   For each student, you can choose for any year only one of the credits. 1040ez 2012 tax form For example, if you choose to take the American opportunity credit for a child on your 2013 tax return, you cannot, for that same child, also claim the lifetime learning credit for 2013. 1040ez 2012 tax form   If you are eligible to claim the American opportunity credit and you are also eligible to claim the lifetime learning credit for the same student in the same year, you can choose to claim either credit, but not both. 1040ez 2012 tax form   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity and the lifetime learning credits on a per-student, per-year basis. 1040ez 2012 tax form This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. 1040ez 2012 tax form Table 35-1. 1040ez 2012 tax form Comparison of Education Credits Caution. 1040ez 2012 tax form You can claim both the American opportunity credit and the lifetime learning credit on the same return—but not for the same student. 1040ez 2012 tax form   American Opportunity Credit Lifetime Learning Credit Maximum credit Up to $2,500 credit per eligible student Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly;  $90,000 if single, head of household, or qualifying widow(er) $127,000 if married filing jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable Credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) the Hope credit was claimed) Available for an unlimited number of years Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period beginning during the tax year Available for one or more courses Felony drug conviction At the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Felony drug convictions do not make the student ineligible Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Differences between the American opportunity and lifetime learning credits. 1040ez 2012 tax form   There are several differences between these two credits. 1040ez 2012 tax form These differences are summarized in Table 35-1, later. 1040ez 2012 tax form Useful Items - You may want to see: Publication 970 Tax Benefits for Education Form (and Instructions) 8863 Education Credits (American Opportunity and Lifetime Learning Credits) Who Can Claim an Education Credit You may be able to claim an education credit if you, your spouse, or a dependent you claim on your tax return was a student enrolled at or attending an eligible educational institution. 1040ez 2012 tax form The credits are based on the amount of qualified education expenses paid for the student in 2013 for academic periods beginning in 2013 and in the first 3 months of 2014. 1040ez 2012 tax form For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 education credit(s). 1040ez 2012 tax form Academic period. 1040ez 2012 tax form   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. 1040ez 2012 tax form In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. 1040ez 2012 tax form Eligible educational institution. 1040ez 2012 tax form   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. 1040ez 2012 tax form S. 1040ez 2012 tax form Department of Education. 1040ez 2012 tax form It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 1040ez 2012 tax form The educational institution should be able to tell you if it is an eligible educational institution. 1040ez 2012 tax form   Certain educational institutions located outside the United States also participate in the U. 1040ez 2012 tax form S. 1040ez 2012 tax form Department of Education's Federal Student Aid (FSA) programs. 1040ez 2012 tax form Who can claim a dependent's expenses. 1040ez 2012 tax form   If an exemption is allowed as a deduction for any person who claims the student as a dependent, all qualified education expenses of the student are treated as having been paid by that person. 1040ez 2012 tax form Therefore, only that person can claim an education credit for the student. 1040ez 2012 tax form If a student is not claimed as a dependent on another person's tax return, only the student can claim a credit. 1040ez 2012 tax form Expenses paid by a third party. 1040ez 2012 tax form   Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. 1040ez 2012 tax form However, qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. 1040ez 2012 tax form Therefore, you are treated as having paid expenses that were paid by the third party. 1040ez 2012 tax form For more information and an example see Who Can Claim a Dependent's Expenses in Pub. 1040ez 2012 tax form 970, chapter 2 or 3. 1040ez 2012 tax form Who cannot claim a credit. 1040ez 2012 tax form   You cannot take an education credit if any of the following apply. 1040ez 2012 tax form You are claimed as a dependent on another person's tax return, such as your parent's return. 1040ez 2012 tax form Your filing status is married filing separately. 1040ez 2012 tax form You (or your spouse) were a nonresident alien for any part of 2013 and did not elect to be treated as a resident alien for tax purposes. 1040ez 2012 tax form Your MAGI is one of the following. 1040ez 2012 tax form American opportunity credit: $180,000 or more if married filing jointly, or $90,000 or more if single, head of household, or qualifying widow(er). 1040ez 2012 tax form Lifetime learning credit: $127,000 or more if married filing jointly, or $63,000 or more if single, head of household, or qualifying widow(er) . 1040ez 2012 tax form   Generally, your MAGI is the amount on your Form 1040, line 38, or Form 1040A, line 22. 1040ez 2012 tax form However, if you are filing Form 2555, Form 2555–EZ, or Form 4563, or are excluding income from Puerto RIco, add to the amount on your Form 1040, line 38, or Form 1040A, line 22, the amount of income you excluded. 1040ez 2012 tax form For details, see Pub. 1040ez 2012 tax form 970. 1040ez 2012 tax form    Figure 35-A may be helpful in determining if you can claim an education credit on your tax return. 1040ez 2012 tax form The American opportunity credit will always be greater than or equal to the lifetime learning credit for any student who is eligible for both credits. 1040ez 2012 tax form However, if any of the conditions for the American opportunity credit, listed in Table 35-1 earlier, are not met for any student, you cannot take the American opportunity credit for that student. 1040ez 2012 tax form You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. 1040ez 2012 tax form See Pub. 1040ez 2012 tax form 970 for information on other education benefits. 1040ez 2012 tax form Qualified Education Expenses Generally, qualified education expenses are amounts paid in 2013 for tuition and fees required for the student's enrollment or attendance at an eligible educational institution. 1040ez 2012 tax form It does not matter whether the expenses were paid in cash, by check, by credit or debit card, or with borrowed funds. 1040ez 2012 tax form For course-related books, supplies, and equipment, only certain expenses qualify. 1040ez 2012 tax form American opportunity credit: Qualified education expenses include amounts spent on books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. 1040ez 2012 tax form Lifetime learning credit: Qualified education expenses include amounts for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance. 1040ez 2012 tax form Qualified education expenses include nonacademic fees, such as student activity fees, athletic fees, or other expenses unrelated to the academic course of instruction, only if the fee must be paid to the institution as a condition of enrollment or attendance. 1040ez 2012 tax form However, fees for personal expenses (described below) are never qualified education expenses. 1040ez 2012 tax form Qualified education expenses for either credit do not include amounts paid for: Personal expenses. 1040ez 2012 tax form This means room and board, insurance, medical expenses (including student health fees), transportation, and other similar personal, living, or family expenses. 1040ez 2012 tax form Any course or other education involving sports, games, or hobbies, or any noncredit course, unless such course or other education is part of the student's degree program or (for the lifetime learning credit only) helps the student acquire or improve job skills. 1040ez 2012 tax form You should receive Form 1098–T, Tuition Statement, from the institution reporting either payments received in 2013 (box 1) or amounts billed in 2013 (box 2). 1040ez 2012 tax form However, the amount in box 1 or 2 of Form 1098–T may be different from the amount you paid (or are treated as having paid). 1040ez 2012 tax form In completing Form 8863, use only the amounts you actually paid (plus any amounts you are treated as having paid) in 2013, reduced as necessary, as described in Adjustments to Qualified Education Expenses , later. 1040ez 2012 tax form Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. 1040ez 2012 tax form Qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. 1040ez 2012 tax form If you or the student takes a deduction for higher education expenses, such as on Schedule A or C (Form 1040), you cannot use those expenses in your qualified education expenses when figuring your education credits. 1040ez 2012 tax form Qualified education expenses for any academic period must be reduced by any tax-free educational assistance allocable to that academic period. 1040ez 2012 tax form See Adjustments to Qualified Education Expenses, later. 1040ez 2012 tax form Prepaid Expenses. 1040ez 2012 tax form   Qualified education expenses paid in 2013 for an academic period that begins in the first 3 months of 2014 can be used in figuring an education credit for 2013 only. 1040ez 2012 tax form See Academic period , earlier. 1040ez 2012 tax form For example, if you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). 1040ez 2012 tax form    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). 1040ez 2012 tax form Paid with borrowed funds. 1040ez 2012 tax form   You can claim an education credit for qualified education expenses paid with the proceeds of a loan. 1040ez 2012 tax form Use the expenses to figure the credit for the year in which the expenses are paid, not the year in which the loan is repaid. 1040ez 2012 tax form Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. 1040ez 2012 tax form Student withdraws from class(es). 1040ez 2012 tax form   You can claim an education credit for qualified education expenses not refunded when a student withdraws. 1040ez 2012 tax form No Double Benefit Allowed You cannot do any of the following. 1040ez 2012 tax form Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an education credit based on those same expenses. 1040ez 2012 tax form Claim more than one education credit based on the same qualified education expenses. 1040ez 2012 tax form Claim an education credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). 1040ez 2012 tax form Claim an education credit based on qualified education expenses paid with educational assistance, such as a tax-free scholarship, grant, or employer-provided educational assistance. 1040ez 2012 tax form See Adjustments to Qualified Education Expenses, next. 1040ez 2012 tax form Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid in 2013 by or on behalf of that student under the following rules. 1040ez 2012 tax form The result is the amount of adjusted qualified education expenses for each student. 1040ez 2012 tax form Tax-free educational assistance. 1040ez 2012 tax form   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. 1040ez 2012 tax form See Academic period , earlier. 1040ez 2012 tax form      Tax-free educational assistance includes:    Tax-free parts of scholarships and fellowships (see chapter 12 of this publication and chapter 1 of Pub. 1040ez 2012 tax form 970), The tax-free part of Pell grants (see chapter 1 of Pub. 1040ez 2012 tax form 970), The tax-free part of employer-provided educational assistance (see Pub. 1040ez 2012 tax form 970), Veterans' educational assistance (see chapter 1 of Pub. 1040ez 2012 tax form 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 1040ez 2012 tax form Generally, any scholarship or fellowship is treated as tax-free educational assistance. 1040ez 2012 tax form However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent the student includes it in gross income (if the student is required to file a tax return) for the year the scholarship or fellowship is received and either: The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. 1040ez 2012 tax form 970, chapter 1; or The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. 1040ez 2012 tax form 970, chapter 1. 1040ez 2012 tax form You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year received. 1040ez 2012 tax form For details, see Adjustments of Qualified Education Expenses, in chapters 2 and 3 of Pub. 1040ez 2012 tax form 970. 1040ez 2012 tax form Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. 1040ez 2012 tax form This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). 1040ez 2012 tax form If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. 1040ez 2012 tax form If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. 1040ez 2012 tax form Refunds. 1040ez 2012 tax form   A refund of qualified education expenses may reduce qualified education expenses for the tax year or may require you to repay (recapture) the credit that you claimed in an earlier year. 1040ez 2012 tax form Some tax-free educational assistance received after 2013 may be treated as a refund. 1040ez 2012 tax form See Tax-free educational assistance, earlier. 1040ez 2012 tax form Refunds received in 2013. 1040ez 2012 tax form   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. 1040ez 2012 tax form Refunds received after 2013 but before your income tax return is filed. 1040ez 2012 tax form   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. 1040ez 2012 tax form Refunds received after 2013 and after your income tax return is filed. 1040ez 2012 tax form   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received after you file your 2013 income tax return, you may need to repay some or all of the credit that you claimed. 1040ez 2012 tax form See Credit recapture, next. 1040ez 2012 tax form Credit recapture. 1040ez 2012 tax form    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. 1040ez 2012 tax form You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. 1040ez 2012 tax form You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). 1040ez 2012 tax form Include that amount as an additional tax for the year the refund or tax-free assistance was received. 1040ez 2012 tax form Example. 1040ez 2012 tax form    You paid $8,000 tuition and fees in December 2013 for your child's Spring semester beginning in January 2014. 1040ez 2012 tax form You filed your 2013 tax return on February 3, 2014, and claimed a lifetime learning credit of $1,600 ($8,000 qualified education expense paid x . 1040ez 2012 tax form 20). 1040ez 2012 tax form You claimed no other tax credits. 1040ez 2012 tax form After you filed your return, your child withdrew from two courses and you received a refund of $1,400. 1040ez 2012 tax form You must refigure your 2013 lifetime learning credit using $6,600 ($8,000 qualified education expenses − $1,400 refund). 1040ez 2012 tax form The refigured credit is $1,320 and your tax liability increased by $280. 1040ez 2012 tax form You must include the difference of $280 ($1,600 credit originally claimed − $1,320 refigured credit) as additional tax on your 2014 income tax return. 1040ez 2012 tax form See the instructions for your 2014 income tax return to determine where to include this tax. 1040ez 2012 tax form If you also pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. 1040ez 2012 tax form Amounts that do not reduce qualified education expenses. 1040ez 2012 tax form   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. 1040ez 2012 tax form   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. 1040ez 2012 tax form The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses, as defined in Chapter 1 of Pub. 1040ez 2012 tax form 970. 1040ez 2012 tax form The use of the money is not restricted. 1040ez 2012 tax form   For examples, see chapter 2 in Pub. 1040ez 2012 tax form 970. 1040ez 2012 tax form Figure 35-A. 1040ez 2012 tax form Can You Claim an Education Credit for 2013? This image is too large to be displayed in the current screen. 1040ez 2012 tax form Please click the link to view the image. 1040ez 2012 tax form Figure 35-A. 1040ez 2012 tax form Can You Claim an Education Credit for 2013? Prev  Up  Next   Home   More Online Publications