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2008 Tax Forms

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2008 Tax Forms

2008 tax forms Publication 503 - Main Content Table of Contents 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. 2008 tax forms Employment Taxes for Household Employers How To Get Tax HelpLow Income Taxpayer Clinics Tests To Claim the Credit To be able to claim the credit for child and dependent care expenses, you must file Form 1040, Form 1040A, or Form 1040NR, not Form 1040EZ or Form 1040NR-EZ, and meet all the following tests. 2008 tax forms The care must be for one or more qualifying persons who are identified on Form 2441. 2008 tax forms (See Qualifying Person Test. 2008 tax forms ) You (and your spouse if filing jointly) must have earned income during the year. 2008 tax forms (However, see Rule for student-spouse or spouse not able to care for self under Earned Income Test, later. 2008 tax forms ) You must pay child and dependent care expenses so you (and your spouse if filing jointly) can work or look for work. 2008 tax forms (See Work-Related Expense Test, later. 2008 tax forms ) You must make payments for child and dependent care to someone you (and your spouse) cannot claim as a dependent. 2008 tax forms 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. 2008 tax forms 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. 2008 tax forms See Payments to Relatives or Dependents under Work-Related Expense Test, later. 2008 tax forms Your filing status may be single, head of household, or qualifying widow(er) with dependent child. 2008 tax forms If you are married, you must file a joint return, unless an exception applies to you. 2008 tax forms See Joint Return Test, later. 2008 tax forms You must identify the care provider on your tax return. 2008 tax forms (See Provider Identification Test, later. 2008 tax forms ) If you exclude or deduct dependent care benefits provided by a dependent care benefit 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). 2008 tax forms (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. 2008 tax forms See Reduced Dollar Limit under How To Figure the Credit, later. 2008 tax forms ) These tests are presented in Figure A and are also explained in detail in this publication. 2008 tax forms Qualifying Person Test Your child and dependent care expenses must be for the care of one or more qualifying persons. 2008 tax forms 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. 2008 tax forms Dependent defined. 2008 tax forms   A dependent is a person, other than you or your spouse, for whom you can claim an exemption. 2008 tax forms To be your dependent, a person must be your qualifying child (or your qualifying relative). 2008 tax forms Qualifying child. 2008 tax forms   To be your qualifying child, a child must live with you for more than half the year and meet other requirements. 2008 tax forms More information. 2008 tax forms   For more information about who is a dependent or a qualifying child, see Publication 501. 2008 tax forms Physically or mentally not able to care for oneself. 2008 tax forms   Persons who cannot dress, clean, or feed themselves because of physical or mental problems are considered not able to care for themselves. 2008 tax forms Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves. 2008 tax forms Person qualifying for part of year. 2008 tax forms   You determine a person's qualifying status each day. 2008 tax forms 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. 2008 tax forms Also see Yearly limit under Dollar Limit, later. 2008 tax forms Birth or death of otherwise qualifying person. 2008 tax forms   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 more than half the time he or she was alive in 2013. 2008 tax forms Taxpayer identification number. 2008 tax forms   You must include on your return the name and taxpayer identification number (generally the social security number) of the qualifying person(s). 2008 tax forms If the correct information is not shown, the credit may be reduced or disallowed. 2008 tax forms Individual taxpayer identification number (ITIN) for aliens. 2008 tax forms   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. 2008 tax forms The ITIN is entered wherever an SSN is requested on a tax return. 2008 tax forms If the alien does not have an ITIN, he or she must apply for one. 2008 tax forms See Form W-7, Application for IRS Individual Taxpayer Identification Number, for details. 2008 tax forms   An ITIN is for tax use only. 2008 tax forms It does not entitle the holder to social security benefits or change the holder's employment or immigration status under U. 2008 tax forms S. 2008 tax forms law. 2008 tax forms Adoption taxpayer identification number (ATIN). 2008 tax forms   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. 2008 tax forms File Form W-7A, Application for Taxpayer Identification Number for Pending U. 2008 tax forms S. 2008 tax forms Adoptions. 2008 tax forms Child of divorced or separated parents or parents living apart. 2008 tax forms   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. 2008 tax forms   The custodial parent is the parent with whom the child lived for the greater number of nights in 2013. 2008 tax forms 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. 2008 tax forms For details and an exception for a parent who works at night, see Publication 501. 2008 tax forms   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. 2008 tax forms Please click here for the text description of the image. 2008 tax forms Figure a. 2008 tax forms Can you claim the credit Earned Income Test To claim the credit, you (and your spouse if filing jointly) must have earned income during the year. 2008 tax forms Earned income. 2008 tax forms   Earned income includes wages, salaries, tips, other taxable employee compensation, and net earnings from self-employment. 2008 tax forms A net loss from self-employment reduces earned income. 2008 tax forms Earned income also includes strike benefits and any disability pay you report as wages. 2008 tax forms   Generally, only taxable compensation is included. 2008 tax forms However, you can elect to include nontaxable combat pay in earned income. 2008 tax forms If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. 2008 tax forms (In other words, if one of you makes the election, the other one can also make it but does not have to. 2008 tax forms ) Including this income will give you a larger credit only if your (or your spouse's) other earned income is less than the amount entered on line 3 of Form 2441. 2008 tax forms You should figure your credit both ways and make the election if it gives you a greater tax benefit. 2008 tax forms    You can choose to include your nontaxable combat pay in earned income when figuring your credit for child and dependent care expenses, even if you choose not to include it in earned income for the earned income credit or the exclusion or deduction for dependent care benefits. 2008 tax forms Members of certain religious faiths opposed to social security. 2008 tax forms   This section is for 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. 2008 tax forms These forms are: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, and Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits, for use by members of recognized religious groups. 2008 tax forms   Each form is discussed here in terms of what is or is not earned income for purposes of the child and dependent care credit. 2008 tax forms For information on the use of these forms, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. 2008 tax forms Form 4361. 2008 tax forms   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee are earned income. 2008 tax forms This includes wages, salaries, tips, and other taxable employee compensation. 2008 tax forms   However, amounts you received for ministerial duties, but not as an employee, do not count as earned income. 2008 tax forms Examples include fees for performing marriages and honoraria for delivering speeches. 2008 tax forms   Any amount you received for work that is not related to your ministerial duties is earned income. 2008 tax forms Form 4029. 2008 tax forms   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation are earned income. 2008 tax forms   However, amounts you received as a self-employed individual do not count as earned income. 2008 tax forms What is not earned income?   Earned income does not include: Pensions and annuities, Social security and railroad retirement benefits, Workers' compensation, Interest and dividends, Unemployment compensation, Scholarships or fellowship grants, except for those reported on Form W-2 and paid to you for teaching or other services, Nontaxable workfare payments, Child support payments received, Income of a nonresident alien that is not effectively connected with a U. 2008 tax forms S. 2008 tax forms trade or business, or Any amount received for work while an inmate in a penal institution. 2008 tax forms Rule for student-spouse or spouse not able to care for self. 2008 tax forms   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. 2008 tax forms (Your spouse also must live with you for more than half the year. 2008 tax forms )   If you are filing a joint return, this rule also applies to you. 2008 tax forms You can be treated as having earned income for any month you are a full-time student or not able to care for yourself. 2008 tax forms   Figure the earned income of the nonworking spouse, described under (1) or (2) above, as shown under Earned Income Limit under How To Figure the Credit, later. 2008 tax forms   This rule applies to only one spouse for any one month. 2008 tax forms 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. 2008 tax forms Full-time student. 2008 tax forms    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. 2008 tax forms You must have been a full-time student for some part of each of 5 calendar months during the year. 2008 tax forms (The months need not be consecutive. 2008 tax forms ) School. 2008 tax forms   The term “school” includes high schools, colleges, universities, and technical, trade, and mechanical schools. 2008 tax forms A school does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. 2008 tax forms Work-Related Expense Test Child and dependent care expenses must be work-related to qualify for the credit. 2008 tax forms Expenses are considered work-related only if both of the following are true. 2008 tax forms They allow you (and your spouse if filing jointly) to work or look for work. 2008 tax forms They are for a qualifying person's care. 2008 tax forms Working or Looking for Work To be work-related, your expenses must allow you to work or look for work. 2008 tax forms If you are married, generally both you and your spouse must work or look for work. 2008 tax forms 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. 2008 tax forms Your work can be for others or in your own business or partnership. 2008 tax forms It can be either full time or part time. 2008 tax forms Work also includes actively looking for work. 2008 tax forms However, if you do not find a job and have no earned income for the year, you cannot take this credit. 2008 tax forms See Earned Income Test, earlier. 2008 tax forms An expense is not considered work-related merely because you had it while you were working. 2008 tax forms The purpose of the expense must be to allow you to work. 2008 tax forms Whether your expenses allow you to work or look for work depends on the facts. 2008 tax forms Example 1. 2008 tax forms The cost of a babysitter while you and your spouse go out to eat is not normally a work-related expense. 2008 tax forms Example 2. 2008 tax forms You work during the day. 2008 tax forms Your spouse works at night and sleeps during the day. 2008 tax forms You pay for care of your 5-year-old child during the hours when you are working and your spouse is sleeping. 2008 tax forms Your expenses are considered work-related. 2008 tax forms Volunteer work. 2008 tax forms   For this purpose, you are not considered to be working if you do unpaid volunteer work or volunteer work for a nominal salary. 2008 tax forms Work for part of year. 2008 tax forms   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. 2008 tax forms 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. 2008 tax forms 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). 2008 tax forms Temporary absence from work. 2008 tax forms   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. 2008 tax forms Instead, you can figure your credit including the expenses you paid for the period of absence. 2008 tax forms   An absence of 2 weeks or less is a short, temporary absence. 2008 tax forms An absence of more than 2 weeks may be considered a short, temporary absence, depending on the circumstances. 2008 tax forms Example. 2008 tax forms You pay a nanny to care for your 2-year-old son and 4-year-old daughter so you can work. 2008 tax forms You become ill and miss 4 months of work but receive sick pay. 2008 tax forms You continue to pay the nanny to care for the children while you are ill. 2008 tax forms Your absence is not a short, temporary absence, and your expenses are not considered work-related. 2008 tax forms Part-time work. 2008 tax forms   If you work part-time, you generally must figure your expenses for each day. 2008 tax forms 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. 2008 tax forms Any day when you work at least 1 hour is a day of work. 2008 tax forms Example 1. 2008 tax forms You work 3 days a week. 2008 tax forms While you work, your 6-year-old child attends a dependent care center, which complies with all state and local regulations. 2008 tax forms You can pay the center $150 for any 3 days a week or $250 for 5 days a week. 2008 tax forms Your child attends the center 5 days a week. 2008 tax forms Your work-related expenses are limited to $150 a week. 2008 tax forms Example 2. 2008 tax forms The facts are the same as in Example 1 except the center does not offer a 3-day option. 2008 tax forms The entire $250 weekly fee may be a work-related expense. 2008 tax forms Care of a Qualifying Person To be work-related, your expenses must be to provide care for a qualifying person. 2008 tax forms You do not have to choose the least expensive way of providing the care. 2008 tax forms 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. 2008 tax forms Expenses are for the care of a qualifying person only if their main purpose is the person's well-being and protection. 2008 tax forms Expenses for household services qualify if part of the services is for the care of qualifying persons. 2008 tax forms See Household Services, later. 2008 tax forms Expenses not for care. 2008 tax forms   Expenses for care do not include amounts you pay for food, lodging, clothing, education, and entertainment. 2008 tax forms 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. 2008 tax forms Otherwise, see the discussion of Expenses partly work-related, later. 2008 tax forms   Child support payments are not for care and do not qualify for the credit. 2008 tax forms Education. 2008 tax forms   Expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are expenses for care. 2008 tax forms   Expenses to attend kindergarten or a higher grade are not expenses for care. 2008 tax forms Do not use these expenses to figure your credit. 2008 tax forms   However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be expenses for care. 2008 tax forms   Summer school and tutoring programs are not for care. 2008 tax forms Example 1. 2008 tax forms You take your 3-year-old child to a nursery school that provides lunch and a few educational activities as part of its preschool childcare service. 2008 tax forms The lunch and educational activities are incidental to the childcare, and their cost cannot be separated from the cost of care. 2008 tax forms You can count the total cost when you figure the credit. 2008 tax forms Example 2. 2008 tax forms You place your 10-year-old child in a boarding school so you can work full time. 2008 tax forms Only the part of the boarding school expense that is for the care of your child is a work-related expense. 2008 tax forms You can count that part of the expense in figuring your credit if it can be separated from the cost of education. 2008 tax forms You cannot count any part of the amount you pay the school for your child's education. 2008 tax forms Care outside your home. 2008 tax forms   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. 2008 tax forms Dependent care center. 2008 tax forms   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. 2008 tax forms   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. 2008 tax forms Camp. 2008 tax forms   The cost of sending your child to an overnight camp is not considered a work-related expense. 2008 tax forms    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. 2008 tax forms Transportation. 2008 tax forms   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. 2008 tax forms This includes transportation by bus, subway, taxi, or private car. 2008 tax forms However, transportation not provided by a care provider is not for the care of a qualifying person. 2008 tax forms 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. 2008 tax forms Fees and deposits. 2008 tax forms   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. 2008 tax forms However, a forfeited deposit is not for the care of a qualifying person if care is not provided. 2008 tax forms Example 1. 2008 tax forms 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. 2008 tax forms The fee you paid is a work-related expense. 2008 tax forms Example 2. 2008 tax forms You placed a deposit with a preschool to reserve a place for your 3-year-old child. 2008 tax forms You later sent your child to a different preschool and forfeited the deposit. 2008 tax forms The forfeited deposit is not for care and so is not a work-related expense. 2008 tax forms Household Services 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. 2008 tax forms Definition. 2008 tax forms   Household services are ordinary and usual services done in and around your home that are necessary to run your home. 2008 tax forms They include the services of a housekeeper, maid, or cook. 2008 tax forms However, they do not include the services of a chauffeur, bartender, or gardener. 2008 tax forms Housekeeper. 2008 tax forms   In this publication, the term housekeeper refers to any household employee whose services include the care of a qualifying person. 2008 tax forms Expenses partly work-related. 2008 tax forms   If part of an expense is work-related (for either household services or the care of a qualifying person) and part is for other purposes, you have to divide the expense. 2008 tax forms To figure your credit, count only the part that is work-related. 2008 tax forms However, you do not have to divide the expense if only a small part is for other purposes. 2008 tax forms Example. 2008 tax forms You pay a housekeeper to care for your 9-year-old and 15-year-old children so you can work. 2008 tax forms The housekeeper spends most of the time doing normal household work and spends 30 minutes a day driving you to and from work. 2008 tax forms You do not have to divide the expenses. 2008 tax forms You can treat the entire expense of the housekeeper as work-related because the time spent driving is minimal. 2008 tax forms Nor do you have to divide the expenses between the two children, even though the expenses are partly for the 15-year-old child who is not a qualifying person, because the expense is also partly for the care of your 9-year-old child, who is a qualifying person. 2008 tax forms However, the dollar limit (discussed later) is based on one qualifying person, not two. 2008 tax forms Meals and lodging provided for housekeeper. 2008 tax forms   If you have expenses for meals that your housekeeper eats in your home because of his or her employment, count these as work-related expenses. 2008 tax forms If you have extra expenses for providing lodging in your home to the housekeeper, count these as work-related expenses also. 2008 tax forms Example. 2008 tax forms To provide lodging to the housekeeper, you move to an apartment with an extra bedroom. 2008 tax forms You can count the extra rent and utility expenses for the housekeeper's bedroom as work-related. 2008 tax forms However, if your housekeeper moves into an existing bedroom in your home, you can count only the extra utility expenses as work-related. 2008 tax forms Taxes paid on wages. 2008 tax forms   The taxes you pay on wages for qualifying child and dependent care services are work-related expenses. 2008 tax forms For more information on a household employer's tax responsibilities, see Employment Taxes for Household Employers, later. 2008 tax forms 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. 2008 tax forms 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. 2008 tax forms Joint Return Test Generally, married couples must file a joint return to take the credit. 2008 tax forms 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. 2008 tax forms Legally separated. 2008 tax forms   You are not considered married if you are legally separated from your spouse under a decree of divorce or separate maintenance. 2008 tax forms You may be eligible to take the credit on your return using head of household filing status. 2008 tax forms Married and living apart. 2008 tax forms   You are not considered married and are eligible to take the credit if all the following apply. 2008 tax forms You file a return apart from your spouse. 2008 tax forms Your home is the home of a qualifying person for more than half the year. 2008 tax forms You pay more than half the cost of keeping up your home for the year. 2008 tax forms Your spouse does not live in your home for the last 6 months of the year. 2008 tax forms Costs of keeping up a home. 2008 tax forms   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. 2008 tax forms   The costs of keeping up a home do not include payments for clothing, education, medical treatment, vacations, life insurance, transportation, or mortgage principal. 2008 tax forms   They also do not include the purchase, permanent improvement, or replacement of property. 2008 tax forms For example, you cannot include the cost of replacing a water heater. 2008 tax forms However, you can include the cost of repairing a water heater. 2008 tax forms Death of spouse. 2008 tax forms   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. 2008 tax forms If you do remarry before the end of the year, the credit can be claimed on your deceased spouse's own return. 2008 tax forms Provider Identification Test You must identify all persons or organizations that provide care for your child or dependent. 2008 tax forms Use Form 2441, Part I, to show the information. 2008 tax forms 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). 2008 tax forms Information needed. 2008 tax forms   To identify the care provider, you must give the provider's: Name, Address, and Taxpayer identification number. 2008 tax forms    If the care provider is an individual, the taxpayer identification number is his or her social security number or individual taxpayer identification number. 2008 tax forms If the care provider is an organization, then it is the employer identification number (EIN). 2008 tax forms   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). 2008 tax forms In this case, enter “Tax-Exempt” in the space where Form 2441 asks for the number. 2008 tax forms   If you cannot provide all of the information or the information is incorrect, you must be able to show that you used due diligence (discussed later) in trying to furnish the necessary information. 2008 tax forms Getting the information. 2008 tax forms    You can use Form W-10, Dependent Care Provider's Identification and Certification, to request the required information from the care provider. 2008 tax forms 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, Employee's Withholding Allowance Certificate, 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 necessary information. 2008 tax forms    You should keep this information with your tax records. 2008 tax forms Do not send Form W-10 (or other document containing this information) to the Internal Revenue Service. 2008 tax forms Due diligence. 2008 tax forms   If the care provider information you give is incorrect or incomplete, your credit may not be allowed. 2008 tax forms However, if you can show that you used due diligence in trying to supply the information, you can still claim the credit. 2008 tax forms   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. 2008 tax forms Care providers can be penalized if they do not provide this information to you or if they provide incorrect information. 2008 tax forms Provider refusal. 2008 tax forms    If the provider refuses to give you the identifying information, you should report on Form 2441 whatever information you have (such as the name and address). 2008 tax forms Enter “See Attached Statement” in the columns calling for the information you do not have. 2008 tax forms Then attach a statement explaining that you requested the information from the care provider, but the provider did not give you the information. 2008 tax forms Be sure to write your name and social security number on this statement. 2008 tax forms The statement will show that you used due diligence in trying to furnish the necessary information. 2008 tax forms U. 2008 tax forms S. 2008 tax forms citizens and resident aliens living abroad. 2008 tax forms   If you are living abroad, your care provider may not have, and may not be required to get, a U. 2008 tax forms S. 2008 tax forms taxpayer identification number (for example, an SSN or an EIN). 2008 tax forms If so, enter “LAFCP” (Living Abroad Foreign Care Provider) in the space for the care provider's taxpayer identification number. 2008 tax forms How To Figure the Credit Your credit is a percentage of your work-related expenses. 2008 tax forms Your expenses are subject to the earned income limit and the dollar limit. 2008 tax forms The percentage is based on your adjusted gross income. 2008 tax forms Figuring Total Work-Related Expenses To figure the credit for 2013 work-related expenses, count only those you paid by December 31, 2013. 2008 tax forms Expenses prepaid in an earlier year. 2008 tax forms   If you pay for services before they are provided, you can count the prepaid expenses only in the year the care is received. 2008 tax forms Claim the expenses for the later year as if they were actually paid in that later year. 2008 tax forms Expenses not paid until the following year. 2008 tax forms   Do not count 2012 expenses that you paid in 2013 as work-related expenses for 2013. 2008 tax forms You may be able to claim an additional credit for them on your 2013 return, but you must figure it separately. 2008 tax forms See Payments for prior year's expenses under Amount of Credit, later. 2008 tax forms If you had expenses in 2013 that you did not pay until 2014, you cannot count them when figuring your 2013 credit. 2008 tax forms You may be able to claim a credit for them on your 2014 return. 2008 tax forms Expenses reimbursed. 2008 tax forms   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. 2008 tax forms Example. 2008 tax forms You paid work-related expenses of $3,000. 2008 tax forms You are reimbursed $2,000 by a state social services agency. 2008 tax forms You can use only $1,000 to figure your credit. 2008 tax forms Medical expenses. 2008 tax forms   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. 2008 tax forms You can use them either way, but you cannot use the same expenses to claim both a credit and a medical expense deduction. 2008 tax forms   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. 2008 tax forms However, if you use your total expenses to figure your medical expense deduction, you cannot use any part of them to figure your credit. 2008 tax forms For information on medical expenses, see Publication 502, Medical and Dental Expenses. 2008 tax forms    Amounts excluded from your income under your employer's dependent care benefits plan cannot be used to claim a medical expense deduction. 2008 tax forms Dependent Care Benefits If you receive dependent care benefits, your dollar limit for purposes of the credit may be reduced. 2008 tax forms See Reduced Dollar Limit, later. 2008 tax forms But, even if you cannot take the credit, you may be able to take an exclusion or deduction for the dependent care benefits. 2008 tax forms Dependent care benefits. 2008 tax forms    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. 2008 tax forms Your salary may have been reduced to pay for these benefits. 2008 tax forms If you received benefits as an employee, they should be shown in box 10 of your Form W-2, Wage and Tax Statement. 2008 tax forms See Statement for employee, later. 2008 tax forms Benefits you received as a partner should be shown in box 13 of your Schedule K-1 (Form 1065) with code O. 2008 tax forms   Enter the amount of these benefits on Form 2441, Part III, line 12. 2008 tax forms Exclusion or deduction. 2008 tax forms   If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. 2008 tax forms Your employer can tell you whether your benefit plan qualifies. 2008 tax forms To claim the exclusion, you must complete Part III of Form 2441. 2008 tax forms You cannot use Form 1040EZ. 2008 tax forms   If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. 2008 tax forms Therefore, you would not get an exclusion from wages. 2008 tax forms Instead, you would get a deduction on Form 1040, Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. 2008 tax forms To claim the deduction, you must use Form 2441. 2008 tax forms   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). 2008 tax forms   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. 2008 tax forms    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. 2008 tax forms Statement for employee. 2008 tax forms   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. 2008 tax forms Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in box 1. 2008 tax forms Effect of exclusion on credit. 2008 tax forms   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. 2008 tax forms 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. 2008 tax forms Earned income for the purpose of figuring the credit is defined under Earned Income Test, earlier. 2008 tax forms 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. 2008 tax forms Example. 2008 tax forms You remarried on December 3. 2008 tax forms Your earned income for the year was $18,000. 2008 tax forms Your new spouse's earned income for the year was $2,000. 2008 tax forms You paid work-related expenses of $3,000 for the care of your 5-year-old child and qualified to claim the credit. 2008 tax forms The amount of expenses you use to figure your credit cannot be more than $2,000 (the smaller of your earned income or that of your spouse). 2008 tax forms Separated spouse. 2008 tax forms   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. 2008 tax forms Use only your income in figuring the earned income limit. 2008 tax forms Surviving spouse. 2008 tax forms   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. 2008 tax forms Community property laws. 2008 tax forms   Disregard community property laws when you figure earned income for this credit. 2008 tax forms Self-employment earnings. 2008 tax forms   If you are self-employed, include your net earnings in earned income. 2008 tax forms For purposes of the child and dependent care credit, net earnings from self-employment generally means the amount from Schedule SE (either Section A or Section B), line 3, minus any deduction for self-employment tax on Form 1040 or Form 1040NR, line 27. 2008 tax forms Include your self-employment earnings in earned income, even if they are less than $400 and you did not file Schedule SE. 2008 tax forms Clergy or church employee. 2008 tax forms   If you are a member of the clergy or a church employee, see the Instructions for Form 2441 for details. 2008 tax forms Statutory employee. 2008 tax forms   If you filed Schedule C (Form 1040) or C-EZ (Form 1040) to report income as a statutory employee, also include as earned income the amount from line 1 of that Schedule C (Form 1040) or C-EZ (Form 1040). 2008 tax forms Net loss. 2008 tax forms   You must reduce your earned income by any net loss from self-employment. 2008 tax forms Optional method if earnings are low or a net loss. 2008 tax forms   If your net earnings from self-employment are low or you have a net loss, you may be able to figure your net earnings by using an optional method instead of the regular method. 2008 tax forms Get Publication 334, Tax Guide for Small Business, for details. 2008 tax forms If you use an optional method to figure net earnings for self-employment tax purposes, include those net earnings in your earned income for this credit. 2008 tax forms In this case, subtract any deduction you claimed on Form 1040 or Form 1040NR, line 27, from the total of the amounts on Schedule SE, Section B, lines 3 and 4b, to figure your net earnings. 2008 tax forms You or your spouse is a student or not able to care for self. 2008 tax forms   Your spouse who is either a full-time student or not able to care for himself or herself is treated as having earned income. 2008 tax forms 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. 2008 tax forms Spouse works. 2008 tax forms   If your spouse works during that month, use the higher of $250 (or $500) or his or her actual earned income for that month. 2008 tax forms Spouse qualifies for part of month. 2008 tax forms   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. 2008 tax forms You are a student or not able to care for self. 2008 tax forms   These rules also apply if you are a student or not able to care for yourself and are filing a joint return. 2008 tax forms 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). 2008 tax forms If you also work during that month, use the higher of $250 (or $500) or your actual earned income for that month. 2008 tax forms Both spouses qualify. 2008 tax forms   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. 2008 tax forms Example. 2008 tax forms Jim works and keeps up a home for himself and his wife Sharon. 2008 tax forms Because of an accident, Sharon is not able to care for herself for 11 months during the tax year. 2008 tax forms During the 11 months, Jim pays $3,300 of work-related expenses for Sharon's care. 2008 tax forms These expenses also qualify as medical expenses. 2008 tax forms Their adjusted gross income is $29,000 and the entire amount is Jim's earned income. 2008 tax forms Jim and Sharon's earned income limit is the smallest of the following amounts. 2008 tax forms   Jim and Sharon's Earned Income Limit   1) Work-related expenses Jim paid $   3,300   2) Jim's earned income $   29,000   3) Income considered earned by Sharon (11 × $250) $    2,750   Jim and Sharon can use $2,750 to figure the credit and treat the balance of $550 ($3,300 − $2,750) as a medical expense. 2008 tax forms However, if they use the $3,300 first as a medical expense, they cannot use any part of that amount to figure the credit. 2008 tax forms Dollar Limit There is a dollar limit on the amount of your work-related expenses you can use to figure the credit. 2008 tax forms This limit is $3,000 for one qualifying person, or $6,000 for two or more qualifying persons. 2008 tax forms If you paid work-related expenses for the care of two or more qualifying persons, the applicable dollar limit is $6,000. 2008 tax forms This limit does not need to be divided equally among them. 2008 tax forms 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. 2008 tax forms Yearly limit. 2008 tax forms   The dollar limit is a yearly limit. 2008 tax forms The amount of the dollar limit remains the same no matter how long, during the year, you have a qualifying person in your household. 2008 tax forms Use the $3,000 limit if you paid work-related expenses for the care of one qualifying person at any time during the year. 2008 tax forms Use $6,000 if you paid work-related expenses for the care of more than one qualifying person at any time during the year. 2008 tax forms Example 1. 2008 tax forms You pay $500 a month for after-school care for your son. 2008 tax forms He turned 13 on May 1 and is no longer a qualifying person. 2008 tax forms You can use the $2,000 of expenses for his care January through April to figure your credit because it is not more than the $3,000 yearly limit. 2008 tax forms Example 2. 2008 tax forms In July of this year, to permit your spouse to begin a new job, you enrolled your 3-year-old daughter in a nursery school that provides preschool childcare. 2008 tax forms You paid $300 per month for the childcare. 2008 tax forms You can use the full $1,800 you paid ($300 × 6 months) as qualified expenses because it is not more than the $3,000 yearly limit. 2008 tax forms 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. 2008 tax forms Your reduced dollar limit is figured on Form 2441, Part III. 2008 tax forms See Dependent Care Benefits, earlier, for information on excluding or deducting these benefits. 2008 tax forms Example 1. 2008 tax forms George is a widower with one child and earns $24,000 a year. 2008 tax forms 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. 2008 tax forms His employer pays an additional $1,000 under a qualified dependent care benefit plan. 2008 tax forms This $1,000 is excluded from George's income. 2008 tax forms 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. 2008 tax forms This is because his dollar limit is reduced as shown next. 2008 tax forms   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. 2008 tax forms Randall is married and both he and his wife are employed. 2008 tax forms Each has earned income in excess of $6,000. 2008 tax forms They have two children, Anne and Andy, ages 2 and 4, who attend a daycare facility licensed and regulated by the state. 2008 tax forms Randall's work-related expenses are $6,000 for the year. 2008 tax forms 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. 2008 tax forms Randall has elected to take the maximum $5,000 exclusion from his salary to cover dependent care expenses through this program. 2008 tax forms 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. 2008 tax forms This is because his dollar limit is reduced as shown next. 2008 tax forms   Randall's Reduced Dollar Limit 1) Maximum allowable expenses for two qualifying persons $6,000 2) Minus: Dependent care benefits selected from employer's cafeteria plan and  excluded from Randall's income −5,000 3) Reduced dollar limit on work-related 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. 2008 tax forms This percentage depends on your adjusted gross income shown on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37. 2008 tax forms The following table shows the percentage to use based on adjusted gross income. 2008 tax forms   IF your adjusted gross income is: THEN the       Over:       But not over:   percentage is:       $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%   To qualify for the credit, you must have one or more qualifying persons. 2008 tax forms You should show the expenses for each person on Form 2441, line 2, column (c). 2008 tax forms However, it is possible a qualifying person could have no expenses and a second qualifying person could have expenses exceeding $3,000. 2008 tax forms You should list -0- for the one person and the actual amount for the second person. 2008 tax forms The $6,000 limit that applies to two or more qualifying persons would still be used to compute your credit unless you already excluded or deducted, in Part III of Form 2441, certain dependent care benefits paid to you (or on your behalf) by your employer. 2008 tax forms Example. 2008 tax forms Roger and Megan Paris have two qualifying children. 2008 tax forms They received $1,000 of dependent care benefits from Megan's employer during 2013, but they incurred a total of $19,500 of child and dependent care expenses. 2008 tax forms They complete Part III of Form 2441 to exclude the $1,000 from their taxable income (offsetting $1,000 of their expenses). 2008 tax forms Roger and Megan continue to line 27 to figure their credit using the remaining $18,500 of expenses. 2008 tax forms Line 30 tells them to complete line 2 without including any dependent care benefits. 2008 tax forms They complete line 2 of Form 2441, listing both Susan and James, as shown in the Line 2 example above. 2008 tax forms Line 2 Example (a) Qualifying person's name (b) Qualifying person's social security number (c) Qualified expenses you incurred and paid in 2013 for the person listed in column (a) First Last Susan Paris 123-00-6789 -0- James Paris 987-00-4321 18,500. 2008 tax forms 00 All of Susan's expenses were covered by the $1,000 of employer-provided dependent care benefits. 2008 tax forms However, their son James has special needs and they paid $18,500 for his care. 2008 tax forms Line 3 imposes a $5,000 limit for two or more children ($6,000 limit, minus $1,000 already excluded from income = $5,000) and Roger and Megan continue to complete the form. 2008 tax forms Even though line 2 indicates one of the Paris children did not have any dependent care expenses, it does not change the fact that they had two qualifying children for the purposes of Form 2441. 2008 tax forms Payments for prior year's expenses. 2008 tax forms   If you had work-related expenses in 2012 that you paid in 2013, you may be able to increase the credit on your 2013 return. 2008 tax forms Attach a statement to your form showing how you figured the additional amount from 2012. 2008 tax forms Then enter “CPYE” (Credit for Prior Year Expenses) and the amount of the credit on the dotted line next to line 9 on Form 2441. 2008 tax forms Also enter the name and taxpayer identification number of the person for whom you paid the prior year's expenses. 2008 tax forms Then add this credit to the amount on line 9, and replace the amount on line 9 with the total. 2008 tax forms See Worksheet A. 2008 tax forms Example. 2008 tax forms In 2012, Sam and Kate had childcare expenses of $2,600 for their 12-year-old child. 2008 tax forms Of the $2,600, they paid $2,000 in 2012 and $600 in 2013. 2008 tax forms Their adjusted gross income for 2012 was $30,000. 2008 tax forms Sam's earned income of $14,000 was less than Kate's earned income. 2008 tax forms A credit for their 2012 expenses paid in 2013 is not allowed in 2012. 2008 tax forms It is allowed for the 2013 tax year, but they must use their adjusted gross income for 2012 to compute the amount. 2008 tax forms The filled-in Worksheet A they used to figure this credit is shown later. 2008 tax forms Sam and Kate add the $162 from line 13 of this worksheet to their 2013 credit and enter the total on their Form 2441, line 9. 2008 tax forms They enter “CPYE $162” and their child's name and SSN in the space to the left of line 9. 2008 tax forms Worksheet A. 2008 tax forms Worksheet for 2012 Expenses Paid in 2013 Use this worksheet to figure the credit you may claim for 2012 expenses paid in 2013. 2008 tax forms 1. 2008 tax forms   Enter your 2012 qualified expenses paid in 2012 1. 2008 tax forms     2. 2008 tax forms   Enter your 2012 qualified expenses paid in 2013 2. 2008 tax forms     3. 2008 tax forms   Add the amounts on lines 1 and 2 3. 2008 tax forms     4. 2008 tax forms   Enter $3,000 if care was for one qualifying person ($6,000 if for two or more) 4. 2008 tax forms     5. 2008 tax forms   Enter any dependent care benefits received for 2012 and excluded from your income (from your 2012 Form 2441, line 25) 5. 2008 tax forms     6. 2008 tax forms   Subtract the amount on line 5 from the amount on line 4 and enter the result 6. 2008 tax forms     7. 2008 tax forms   Compare your earned income for 2012 and your spouse's earned income for 2012 and enter the smaller amount 7. 2008 tax forms     8. 2008 tax forms   Compare the amounts on lines 3, 6, and 7 and enter the smallest amount 8. 2008 tax forms     9. 2008 tax forms   Enter the amount on which you figured the credit for 2012 (from your 2012 Form 2441, line 6) 9. 2008 tax forms     10. 2008 tax forms   Subtract the amount on line 9 from the amount on line 8 and enter the result. 2008 tax forms If zero or less, stop here. 2008 tax forms You cannot increase your 2013 credit by any previous year's expenses 10. 2008 tax forms     11. 2008 tax forms   Enter your 2012 adjusted gross income (from your 2012 Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37) 11. 2008 tax forms     12. 2008 tax forms   Find your 2012 adjusted gross income in the table below and enter the corresponding decimal amount here 12. 2008 tax forms             IF your 2012 adjusted gross income is:   THEN the decimal                 Over:   But not over:     amount is:                 $0 — $15,000     . 2008 tax forms 35                 15,000 — 17,000     . 2008 tax forms 34                 17,000 — 19,000     . 2008 tax forms 33                 19,000 — 21,000     . 2008 tax forms 32                 21,000 — 23,000     . 2008 tax forms 31                 23,000 — 25,000     . 2008 tax forms 30                 25,000 — 27,000     . 2008 tax forms 29                 27,000 — 29,000     . 2008 tax forms 28                 29,000 — 31,000     . 2008 tax forms 27                 31,000 — 33,000     . 2008 tax forms 26                 33,000 — 35,000     . 2008 tax forms 25                 35,000 — 37,000     . 2008 tax forms 24                 37,000 — 39,000     . 2008 tax forms 23                 39,000 — 41,000     . 2008 tax forms 22                 41,000 — 43,000     . 2008 tax forms 21                 43,000 — No limit     . 2008 tax forms 20           13. 2008 tax forms   Multiply line 10 by line 12. 2008 tax forms Add this amount to your 2013 credit and enter the total on your 2013 Form 2441, line 9. 2008 tax forms Enter the following on the dotted line next to line 9 of Form 2441: “CPYE” The amount of this credit for a prior year's expenses           Also, attach a statement to your tax return showing the name and taxpayer identification number of the person for whom you paid the prior year's expenses and how you figured the credit 13. 2008 tax forms       Worksheet A. 2008 tax forms Filled-in Worksheet for 2012 Expenses Paid in 2013 Use this worksheet to figure the credit you may claim for 2012 expenses paid in 2013. 2008 tax forms 1. 2008 tax forms   Enter your 2012 qualified expenses paid in 2012 1. 2008 tax forms   $2,000 2. 2008 tax forms   Enter your 2012 qualified expenses paid in 2013 2. 2008 tax forms   600 3. 2008 tax forms   Add the amounts on lines 1 and 2 3. 2008 tax forms   2,600 4. 2008 tax forms   Enter $3,000 if care was for one qualifying person ($6,000 if for two or more) 4. 2008 tax forms   3,000 5. 2008 tax forms   Enter any dependent care benefits received for 2012 and excluded from your income (from your 2012 Form 2441, line 25) 5. 2008 tax forms   0 6. 2008 tax forms   Subtract the amount on line 5 from the amount on line 4 and enter the result 6. 2008 tax forms   3,000 7. 2008 tax forms   Compare your earned income for 2012 and your spouse's earned income for 2012 and enter the smaller amount 7. 2008 tax forms   14,000 8. 2008 tax forms   Compare the amounts on lines 3, 6, and 7 and enter the smallest amount 8. 2008 tax forms   2,600 9. 2008 tax forms   Enter the amount on which you figured the credit for 2012 (from your 2012 Form 2441, line 6) 9. 2008 tax forms   2,000 10. 2008 tax forms   Subtract the amount on line 9 from the amount on line 8 and enter the result. 2008 tax forms If zero or less, stop here. 2008 tax forms You cannot increase your 2013 credit by any previous year's expenses 10. 2008 tax forms   600 11. 2008 tax forms   Enter your 2012 adjusted gross income (from your 2012 Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37) 11. 2008 tax forms   30,000 12. 2008 tax forms   Find your 2012 adjusted gross income in the table below and enter the corresponding decimal amount here 12. 2008 tax forms   . 2008 tax forms 27         IF your 2012 adjusted gross income is:   THEN the decimal                 Over   But not over     amount is:                 $0 — $15,000     . 2008 tax forms 35                 15,000 — 17,000     . 2008 tax forms 34                 17,000 — 19,000     . 2008 tax forms 33                 19,000 — 21,000     . 2008 tax forms 32                 21,000 — 23,000     . 2008 tax forms 31                 23,000 — 25,000     . 2008 tax forms 30                 25,000 — 27,000     . 2008 tax forms 29                 27,000 — 29,000     . 2008 tax forms 28                 29,000 — 31,000     . 2008 tax forms 27                 31,000 — 33,000     . 2008 tax forms 26                 33,000 — 35,000     . 2008 tax forms 25                 35,000 — 37,000     . 2008 tax forms 24                 37,000 — 39,000     . 2008 tax forms 23                 39,000 — 41,000     . 2008 tax forms 22                 41,000 — 43,000     . 2008 tax forms 21                 43,000 — No limit     . 2008 tax forms 20           13. 2008 tax forms   Multiply line 10 by line 12. 2008 tax forms Add this amount to your 2013 credit and enter the total on your 2013 Form 2441, line 9. 2008 tax forms Enter the following on the dotted line next to line 9 of Form 2441: “CPYE” The amount of this credit for a prior year's expenses             Also, attach a statement to your tax return showing the name and taxpayer identification number of the person for whom you paid the prior year's expenses and how you figured the credit 13. 2008 tax forms   $162   How To Claim the Credit To claim the credit, you can file Form 1040, Form 1040A, or Form 1040NR. 2008 tax forms You cannot claim the credit on Form 1040EZ or Form 1040NR-EZ. 2008 tax forms Form 1040, Form 1040A, or Form 1040NR. 2008 tax forms    You must complete Form 2441 and attach it to your Form 1040, Form 1040A, or Form 1040NR. 2008 tax forms Enter the credit on your Form 1040, line 48; Form 1040A, line 29; or Form 1040NR, line 46. 2008 tax forms Limit on credit. 2008 tax forms    The amount of credit you can claim is limited to your tax. 2008 tax forms For more information, see the Instructions for Form 2441. 2008 tax forms Tax credit not refundable. 2008 tax forms   You cannot get a refund for any part of the credit that is more than this limit. 2008 tax forms Recordkeeping. 2008 tax forms You should keep records of your work-related expenses. 2008 tax forms Also, if your dependent or spouse is not able to care for himself or herself, your records should show both the nature and length of the disability. 2008 tax forms Other records you should keep to support your claim for the credit are described under Provider Identification Test, earlier. 2008 tax forms 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. 2008 tax forms If you are a household employer, you will need an employer identification number (EIN) and you may have to pay employment taxes. 2008 tax forms If the individuals who work in your home are self-employed, you are not liable for any of the taxes discussed in this section. 2008 tax forms Self-employed persons who are in business for themselves are not household employees. 2008 tax forms 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. 2008 tax forms 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. 2008 tax forms This control could include providing rules of conduct and appearance and requiring regular reports. 2008 tax forms In this case, you do not have to pay employment taxes. 2008 tax forms 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. 2008 tax forms If you have a household employee, you may be subject to: Social security and Medicare taxes, Federal unemployment tax, and Federal income tax withholding. 2008 tax forms Social security and Medicare taxes are generally withheld from the employee's pay and matched by the employer. 2008 tax forms Federal unemployment (FUTA) tax is paid by the employer only and provides for payments of unemployment compensation to workers who have lost their jobs. 2008 tax forms Federal income tax is withheld from the employee's total pay if the employee asks you to do so and you agree. 2008 tax forms For more information on a household employer's tax responsibilities, see Publication 926 and Schedule H (Form 1040) and its instructions. 2008 tax forms State employment tax. 2008 tax forms   You may also have to pay state unemployment tax. 2008 tax forms Contact your state unemployment tax office for information. 2008 tax forms You should also find out whether you need to pay or collect other state employment taxes or carry worker's compensation insurance. 2008 tax forms For a list of state unemployment tax agencies, visit the U. 2008 tax forms S. 2008 tax forms Department of Labor's website. 2008 tax forms To find that website, use the link in Publication 926 or search online. 2008 tax forms How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. 2008 tax forms Free help with your tax return. 2008 tax forms   You can get free help preparing your return nationwide from IRS-certified volunteers. 2008 tax forms The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. 2008 tax forms The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 2008 tax forms Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 2008 tax forms In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. 2008 tax forms To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. 2008 tax forms gov, download the IRS2Go app, or call 1-800-906-9887. 2008 tax forms   As part of the TCE program, AARP offers the Tax-Aide counseling program. 2008 tax forms To find the nearest AARP Tax-Aide site, visit AARP's website at www. 2008 tax forms aarp. 2008 tax forms org/money/taxaide or call 1-888-227-7669. 2008 tax forms For more information on these programs, go to IRS. 2008 tax forms gov and enter “VITA” in the search box. 2008 tax forms Internet. 2008 tax forms    IRS. 2008 tax forms gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. 2008 tax forms Download the free IRS2Go app from the iTunes app store or from Google Play. 2008 tax forms Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 2008 tax forms Check the status of your 2013 refund with the Where's My Refund? application on IRS. 2008 tax forms gov or download the IRS2Go app and select the Refund Status option. 2008 tax forms The IRS issues more than 9 out of 10 refunds in less than 21 days. 2008 tax forms Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. 2008 tax forms You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. 2008 tax forms The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 2008 tax forms Use the Interactive Tax Assistant (ITA) to research your tax questions. 2008 tax forms No need to wait on the phone or stand in line. 2008 tax forms The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. 2008 tax forms When you reach the response screen, you can print the entire interview and the final response for your records. 2008 tax forms New subject areas are added on a regular basis. 2008 tax forms  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. 2008 tax forms gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. 2008 tax forms You can use the IRS Tax Map, to search publications and instructions by topic or keyword. 2008 tax forms The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. 2008 tax forms When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. 2008 tax forms Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. 2008 tax forms You can also ask the IRS to mail a return or an account transcript to you. 2008 tax forms Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. 2008 tax forms gov or by calling 1-800-908-9946. 2008 tax forms Tax return and tax account transcripts are generally available for the current year and the past three years. 2008 tax forms Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. 2008 tax forms Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. 2008 tax forms If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. 2008 tax forms Check the status of your amended return using Where's My Amended Return? Go to IRS. 2008 tax forms gov and enter Where's My Amended Return? in the search box. 2008 tax forms You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 2008 tax forms It can take up to 3 weeks from the date you mailed it to show up in our system. 2008 tax forms Make a payment using one of several safe and convenient electronic payment options available on IRS. 2008 tax forms gov. 2008 tax forms Select the Payment tab on the front page of IRS. 2008 tax forms gov for more information. 2008 tax forms Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. 2008 tax forms Figure your income tax withholding with the IRS Withholding Calculator on IRS. 2008 tax forms gov. 2008 tax forms Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 2008 tax forms Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 2008 tax forms gov. 2008 tax forms Request an Electronic Filing PIN by going to IRS. 2008 tax forms gov and entering Electronic Filing PIN in the search box. 2008 tax forms Download forms, instructions and publications, including accessible versions for people with disabilities. 2008 tax forms Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. 2008 tax forms gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. 2008 tax forms An employee can answer questions about your tax account or help you set up a payment plan. 2008 tax forms Before you visit, check the Office Locator on IRS. 2008 tax forms gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. 2008 tax forms If you have a special need, such as a disability, you can request an appointment. 2008 tax forms Call the local number listed in the Office Locator, or look in the phone book under Unit
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Small Business and Self-Employed Tax Center

 

SB/SE serves taxpayers who file Form 1040, Schedules C, E, F or Form 2106, as well as small businesses with assets under $10 million.

 

A-Z Index for Business
Find it Fast! Know what you're looking for and want to find it fast? Select business topics using our A-Z listing, or by business type such as sole proprietor, corporation, etc. We also provide links to major business subjects, such as Business Expenses, which provides a gateway to all related information on that subject.



 

A-Z Index for Business
Find it Fast! Know what you're looking for and want to find it fast? Select business topics using our A-Z listing, or by business type such as sole proprietor, corporation, etc. We also provide links to major business subjects, such as Business Expenses, which provides a gateway to all related information on that subject.

Affordable Care Act Tax Provisions
Health coverage legislation enacted this year and future changes.

Business Tax Credits
A list of forms for claiming business tax credits, and a complete explanation about when carryovers, credits and deductions cease.

Filing and Payments
The IRS is making it easier than ever for you to conduct business with us electronically.

Filing Past Due Tax Returns
Before you decide not to file your tax return on time or not pay all of your taxes when they are due, consider this.

Información y Recursos para Pequeñas Empresas
Información y recursos para dueños de pequeños negocios. Infórmese sobre sus obligaciones tributarias.

Rate Our Products and this Web site
Help us to help you! We want to know how our products fit your needs as a businessperson. In our efforts to make a better, more informative, and more &quotuser friendly&quot product or Web site, we need your input.

Report of Foreign Bank and Financial Accounts (FBAR)
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).

Small Business Taxes: The Virtual Workshop
This workshop helps business owners understand federal tax obligations.

State Government Websites
A collection of links to State government Web sites with useful information for businesses.

Struggling with Paying Your Taxes? Let IRS Help You Get a Fresh Start.
Help from the IRS for individuals and small businesses struggling to meet their tax obligations. On February 24, 2011, the Internal Revenue Service Commissioner announced an initiative to help people get a fresh start with their tax liabilities. The initiative centers on changes to IRS collection practices that will lessen the negative impact on taxpayers.

Page Last Reviewed or Updated: 06-Dec-2013

The 2008 Tax Forms

2008 tax forms 1. 2008 tax forms   Definitions You Need To Know Table of Contents Other options. 2008 tax forms Exception. 2008 tax forms Certain terms used in this publication are defined below. 2008 tax forms The same term used in another publication may have a slightly different meaning. 2008 tax forms Annual additions. 2008 tax forms   Annual additions are the total of all your contributions in a year, employee contributions (not including rollovers), and forfeitures allocated to a participant's account. 2008 tax forms Annual benefits. 2008 tax forms   Annual benefits are the benefits to be paid yearly in the form of a straight life annuity (with no extra benefits) under a plan to which employees do not contribute and under which no rollover contributions are made. 2008 tax forms Business. 2008 tax forms   A business is an activity in which a profit motive is present and economic activity is involved. 2008 tax forms Service as a newspaper carrier under age 18 or as a public official is not a business. 2008 tax forms Common-law employee. 2008 tax forms   A common-law employee is any individual who, under common law, would have the status of an employee. 2008 tax forms A leased employee can also be a common-law employee. 2008 tax forms   A common-law employee is a person who performs services for an employer who has the right to control and direct the results of the work and the way in which it is done. 2008 tax forms For example, the employer: Provides the employee's tools, materials, and workplace, and Can fire the employee. 2008 tax forms   Common-law employees are not self-employed and cannot set up retirement plans for income from their work, even if that income is self-employment income for social security tax purposes. 2008 tax forms For example, common-law employees who are ministers, members of religious orders, full-time insurance salespeople, and U. 2008 tax forms S. 2008 tax forms citizens employed in the United States by foreign governments cannot set up retirement plans for their earnings from those employments, even though their earnings are treated as self-employment income. 2008 tax forms   However, an individual may be a common-law employee and a self-employed person as well. 2008 tax forms For example, an attorney can be a corporate common-law employee during regular working hours and also practice law in the evening as a self-employed person. 2008 tax forms In another example, a minister employed by a congregation for a salary is a common-law employee even though the salary is treated as self-employment income for social security tax purposes. 2008 tax forms However, fees reported on Schedule C (Form 1040), Profit or Loss From Business, for performing marriages, baptisms, and other personal services are self-employment earnings for qualified plan purposes. 2008 tax forms Compensation. 2008 tax forms   Compensation for plan allocations is the pay a participant received from you for personal services for a year. 2008 tax forms You can generally define compensation as including all the following payments. 2008 tax forms Wages and salaries. 2008 tax forms Fees for professional services. 2008 tax forms Other amounts received (cash or noncash) for personal services actually rendered by an employee, including, but not limited to, the following items. 2008 tax forms Commissions and tips. 2008 tax forms Fringe benefits. 2008 tax forms Bonuses. 2008 tax forms   For a self-employed individual, compensation means the earned income, discussed later, of that individual. 2008 tax forms   Compensation generally includes amounts deferred in the following employee benefit plans. 2008 tax forms These amounts are elective deferrals. 2008 tax forms Qualified cash or deferred arrangement (section 401(k) plan). 2008 tax forms Salary reduction agreement to contribute to a tax-sheltered annuity (section 403(b) plan), a SIMPLE IRA plan, or a SARSEP. 2008 tax forms Section 457 nonqualified deferred compensation plan. 2008 tax forms Section 125 cafeteria plan. 2008 tax forms   However, an employer can choose to exclude elective deferrals under the above plans from the definition of compensation. 2008 tax forms The limit on elective deferrals is discussed in chapter 2 under Salary Reduction Simplified Employee Pension (SARSEP) and in chapter 4. 2008 tax forms Other options. 2008 tax forms   In figuring the compensation of a participant, you can treat any of the following amounts as the employee's compensation. 2008 tax forms The employee's wages as defined for income tax withholding purposes. 2008 tax forms The employee's wages you report in box 1 of Form W-2, Wage and Tax Statement. 2008 tax forms The employee's social security wages (including elective deferrals). 2008 tax forms   Compensation generally cannot include either of the following items. 2008 tax forms Nontaxable reimbursements or other expense allowances. 2008 tax forms Deferred compensation (other than elective deferrals). 2008 tax forms SIMPLE plans. 2008 tax forms   A special definition of compensation applies for SIMPLE plans. 2008 tax forms See chapter 3. 2008 tax forms Contribution. 2008 tax forms   A contribution is an amount you pay into a plan for all those participating in the plan, including self-employed individuals. 2008 tax forms Limits apply to how much, under the contribution formula of the plan, can be contributed each year for a participant. 2008 tax forms Deduction. 2008 tax forms   A deduction is the plan contributions you can subtract from gross income on your federal income tax return. 2008 tax forms Limits apply to the amount deductible. 2008 tax forms Earned income. 2008 tax forms   Earned income is net earnings from self-employment, discussed later, from a business in which your services materially helped to produce the income. 2008 tax forms   You can also have earned income from property your personal efforts helped create, such as royalties from your books or inventions. 2008 tax forms Earned income includes net earnings from selling or otherwise disposing of the property, but it does not include capital gains. 2008 tax forms It includes income from licensing the use of property other than goodwill. 2008 tax forms   Earned income includes amounts received for services by self-employed members of recognized religious sects opposed to social security benefits who are exempt from self-employment tax. 2008 tax forms   If you have more than one business, but only one has a retirement plan, only the earned income from that business is considered for that plan. 2008 tax forms Employer. 2008 tax forms   An employer is generally any person for whom an individual performs or did perform any service, of whatever nature, as an employee. 2008 tax forms A sole proprietor is treated as his or her own employer for retirement plan purposes. 2008 tax forms However, a partner is not an employer for retirement plan purposes. 2008 tax forms Instead, the partnership is treated as the employer of each partner. 2008 tax forms Highly compensated employee. 2008 tax forms   A highly compensated employee is an individual who: Owned more than 5% of the interest in your business at any time during the year or the preceding year, regardless of how much compensation that person earned or received, or For the preceding year, received compensation from you of more than $115,000 (if the preceding year is 2012, 2013, or 2014) and, if you so choose, was in the top 20% of employees when ranked by compensation. 2008 tax forms Leased employee. 2008 tax forms   A leased employee who is not your common-law employee must generally be treated as your employee for retirement plan purposes if he or she does all the following. 2008 tax forms Provides services to you under an agreement between you and a leasing organization. 2008 tax forms Has performed services for you (or for you and related persons) substantially full time for at least 1 year. 2008 tax forms Performs services under your primary direction or control. 2008 tax forms Exception. 2008 tax forms   A leased employee is not treated as your employee if all the following conditions are met. 2008 tax forms Leased employees are not more than 20% of your non-highly compensated work force. 2008 tax forms The employee is covered under the leasing organization's qualified pension plan. 2008 tax forms The leasing organization's plan is a money purchase pension plan that has all the following provisions. 2008 tax forms Immediate participation. 2008 tax forms (This requirement does not apply to any individual whose compensation from the leasing organization in each plan year during the 4-year period ending with the plan year is less than $1,000. 2008 tax forms ) Full and immediate vesting. 2008 tax forms A nonintegrated employer contribution rate of at least 10% of compensation for each participant. 2008 tax forms However, if the leased employee is your common-law employee, that employee will be your employee for all purposes, regardless of any pension plan of the leasing organization. 2008 tax forms Net earnings from self-employment. 2008 tax forms   For SEP and qualified plans, net earnings from self-employment is your gross income from your trade or business (provided your personal services are a material income-producing factor) minus allowable business deductions. 2008 tax forms Allowable deductions include contributions to SEP and qualified plans for common-law employees and the deduction allowed for the deductible part of your self-employment tax. 2008 tax forms   Net earnings from self-employment does not include items excluded from gross income (or their related deductions) other than foreign earned income and foreign housing cost amounts. 2008 tax forms   For the deduction limits, earned income is net earnings for personal services actually rendered to the business. 2008 tax forms You take into account the income tax deduction for the deductible part of self-employment tax and the deduction for contributions to the plan made on your behalf when figuring net earnings. 2008 tax forms   Net earnings include a partner's distributive share of partnership income or loss (other than separately stated items, such as capital gains and losses). 2008 tax forms It does not include income passed through to shareholders of S corporations. 2008 tax forms Guaranteed payments to limited partners are net earnings from self-employment if they are paid for services to or for the partnership. 2008 tax forms Distributions of other income or loss to limited partners are not net earnings from self-employment. 2008 tax forms   For SIMPLE plans, net earnings from self-employment is the amount on line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040), Self-Employment Tax, before subtracting any contributions made to the SIMPLE plan for yourself. 2008 tax forms Qualified plan. 2008 tax forms   A qualified plan is a retirement plan that offers a tax-favored way to save for retirement. 2008 tax forms You can deduct contributions made to the plan for your employees. 2008 tax forms Earnings on these contributions are generally tax free until distributed at retirement. 2008 tax forms Profit-sharing, money purchase, and defined benefit plans are qualified plans. 2008 tax forms A 401(k) plan is also a qualified plan. 2008 tax forms Participant. 2008 tax forms   A participant is an eligible employee who is covered by your retirement plan. 2008 tax forms See the discussions of the different types of plans for the definition of an employee eligible to participate in each type of plan. 2008 tax forms Partner. 2008 tax forms   A partner is an individual who shares ownership of an unincorporated trade or business with one or more persons. 2008 tax forms For retirement plans, a partner is treated as an employee of the partnership. 2008 tax forms Self-employed individual. 2008 tax forms   An individual in business for himself or herself, and whose business is not incorporated, is self-employed. 2008 tax forms Sole proprietors and partners are self-employed. 2008 tax forms Self-employment can include part-time work. 2008 tax forms   Not everyone who has net earnings from self-employment for social security tax purposes is self-employed for qualified plan purposes. 2008 tax forms See Common-law employee and Net earnings from self-employment , earlier. 2008 tax forms   In addition, certain fishermen may be considered self-employed for setting up a qualified plan. 2008 tax forms See Publication 595, Capital Construction Fund for Commercial Fishermen, for the special rules used to determine whether fishermen are self-employed. 2008 tax forms Sole proprietor. 2008 tax forms   A sole proprietor is an individual who owns an unincorporated business by himself or herself, including a single member limited liability company that is treated as a disregarded entity for tax purposes. 2008 tax forms For retirement plans, a sole proprietor is treated as both an employer and an employee. 2008 tax forms Prev  Up  Next   Home   More Online Publications