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Amended Returns

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Amended Returns

Amended returns Publication 519 - Additional Material Table of Contents Appendix A—Tax Treaty Exemption Procedure for StudentsBelgium Bulgaria China, People's Republic of Cyprus Czech Republic, Estonia, Latvia, Lithuania, and Slovak Republic Egypt France Germany Iceland Indonesia Israel, Philippines and Thailand Korea, Norway, Poland, and Romania Morocco Netherlands Pakistan Portugal and Spain Slovenia and Venezuela Trinidad and Tobago Tunisia Appendix B—Tax Treaty Exemption Procedure for Teachers and ResearchersBelgium Bulgaria China, People's Republic of Commonwealth of Independent States Czech Republic and Slovak Republic Egypt, Hungary, Korea, Philippines, Poland, and Romania France Germany Greece India Indonesia Israel Italy Jamaica Luxembourg Netherlands Norway Pakistan Portugal Slovenia and Venezuela Thailand Trinidad and Tobago United Kingdom Frequently Asked Questions This section answers tax-related questions commonly asked by aliens. Amended returns . Amended returns What is the difference between a resident alien and a nonresident alien for tax purposes? . Amended returns What is the difference between the taxation of income that is effectively connected with a trade or business in the United States and income that is not effectively connected with a trade or business in the United States? . Amended returns I am a student with an F-1 Visa. Amended returns I was told that I was an exempt individual. Amended returns Does this mean I am exempt from paying U. Amended returns S. Amended returns tax? . Amended returns I am a resident alien. Amended returns Can I claim any treaty benefits? . Amended returns I am a nonresident alien with no dependents. Amended returns I am working temporarily for a U. Amended returns S. Amended returns company. Amended returns What return do I file? . Amended returns I came to the United States on June 30th of last year. Amended returns I have an H-1B Visa. Amended returns What is my tax status, resident alien or nonresident alien? What tax return do I file? . Amended returns When is my Form 1040NR due? . Amended returns My spouse is a nonresident alien. Amended returns Does he need a social security number? . Amended returns I am a nonresident alien. Amended returns Can I file a joint return with my spouse? . Amended returns I have an H-1B Visa and my husband has an F-1 Visa. Amended returns We both lived in the United States all of last year and had income. Amended returns What kind of form should we file? Do we file separate returns or a joint return? . Amended returns Is a dual-resident taxpayer the same as a dual-status taxpayer? . Amended returns I am a nonresident alien and invested money in the U. Amended returns S. Amended returns stock market through a U. Amended returns S. Amended returns brokerage company. Amended returns Are the dividends and the capital gains taxable? If yes, how are they taxed? . Amended returns I am a nonresident alien. Amended returns I receive U. Amended returns S. Amended returns social security benefits. Amended returns Are my benefits taxable? . Amended returns Do I have to pay taxes on my scholarship? . Amended returns I am a nonresident alien. Amended returns Can I claim the standard deduction? . Amended returns I am a dual-status taxpayer. Amended returns Can I claim the standard deduction? . Amended returns I am filing Form 1040NR. Amended returns Can I claim itemized deductions? . Amended returns I am not a U. Amended returns S. Amended returns citizen. Amended returns What exemptions can I claim? . Amended returns What exemptions can I claim as a dual-status taxpayer? . Amended returns I am single with a dependent child. Amended returns I was a dual-status alien in 2013. Amended returns Can I claim the earned income credit on my 2013 tax return? . Amended returns I am a nonresident alien student. Amended returns Can I claim an education credit on my Form 1040NR? . Amended returns I am a nonresident alien, temporarily working in the U. Amended returns S. Amended returns under a J visa. Amended returns Am I subject to social security and Medicare taxes? . Amended returns I am a nonresident alien student. Amended returns Social security taxes were withheld from my pay in error. Amended returns How do I get a refund of these taxes? . Amended returns I am an alien who will be leaving the United States. Amended returns What forms do I have to file before I leave? . Amended returns I filed a Form 1040-C when I left the United States. Amended returns Do I still have to file an annual U. Amended returns S. Amended returns tax return? . Amended returns What is the difference between a resident alien and a nonresident alien for tax purposes? For tax purposes, an alien is an individual who is not a U. Amended returns S. Amended returns citizen. Amended returns Aliens are classified as resident aliens and nonresident aliens. Amended returns Resident aliens are taxed on their worldwide income, the same as U. Amended returns S. Amended returns citizens. Amended returns Nonresident aliens are taxed only on their U. Amended returns S. Amended returns source income and certain foreign source income that is effectively connected with a U. Amended returns S. Amended returns trade or business. Amended returns The difference between these two categories is that effectively connected income, after allowable deductions, is taxed at graduated rates. Amended returns These are the same rates that apply to U. Amended returns S. Amended returns citizens and residents. Amended returns Income that is not effectively connected is taxed at a flat 30% (or lower treaty) rate. Amended returns The term “exempt individual” does not refer to someone exempt from U. Amended returns S. Amended returns tax. Amended returns You were referred to as an exempt individual because as a student temporarily in the United States on an F Visa, you do not have to count the days you were present in the United States as a student during the first 5 years in determining if you are a resident alien under the substantial presence test. Amended returns See chapter 1 . Amended returns Generally, you cannot claim tax treaty benefits as a resident alien. Amended returns However, there are exceptions. Amended returns See Effect of Tax Treaties in chapter 1. Amended returns See also Resident Aliens under Some Typical Tax Treaty Benefits in chapter 9. Amended returns You must file Form 1040NR if you are engaged in a trade or business in the United States, or have any other U. Amended returns S. Amended returns source income on which tax was not fully paid by the amount withheld. Amended returns You can use Form 1040NR-EZ instead of Form 1040NR if you meet all 11 conditions listed under Form 1040NR-EZ in chapter 7. Amended returns You were a dual-status alien last year. Amended returns As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Amended returns However, for the part of the year that you were not present in the United States, you are a nonresident. Amended returns File Form 1040. Amended returns Print “Dual-Status Return” across the top. Amended returns Attach a statement showing your U. Amended returns S. Amended returns source income for the part of the year you were a nonresident. Amended returns You may use Form 1040NR as the statement. Amended returns Print “Dual-Status Statement” across the top. Amended returns See First Year of Residency in chapter 1 for rules on determining your residency starting date. Amended returns If you are an employee and you receive wages subject to U. Amended returns S. Amended returns income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Amended returns If you file for the 2013 calendar year, your return is due April 15, 2014. Amended returns If you are not an employee who receives wages subject to U. Amended returns S. Amended returns income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Amended returns For the 2013 calendar year, file your return by June 16, 2014. Amended returns For more information on when and where to file, see chapter 7 . Amended returns A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Amended returns If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Amended returns If you are a U. Amended returns S. Amended returns citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Amended returns Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Amended returns See Identification Number in chapter 5 for more information. Amended returns Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Amended returns However, nonresident aliens married to U. Amended returns S. Amended returns citizens or residents can choose to be treated as U. Amended returns S. Amended returns residents and file joint returns. Amended returns For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Assuming both of you had these visas for all of last year, you are a resident alien. Amended returns Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Amended returns You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Amended returns Your husband must file Form 1040NR or 1040NR-EZ. Amended returns No. Amended returns A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Amended returns See Effect of Tax Treaties in chapter 1. Amended returns You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Amended returns See chapter 6 . Amended returns The following rules apply if the dividends and capital gains are not effectively connected with a U. Amended returns S. Amended returns trade or business. Amended returns Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Amended returns See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Amended returns Dividends are generally taxed at a 30% (or lower treaty) rate. Amended returns The brokerage company or payor of the dividends should withhold this tax at source. Amended returns If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Amended returns If the capital gains and dividends are effectively connected with a U. Amended returns S. Amended returns trade or business, they are taxed according to the same rules and at the same rates that apply to U. Amended returns S. Amended returns citizens and residents. Amended returns If you are a nonresident alien, 85% of any U. Amended returns S. Amended returns social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Amended returns See The 30% Tax in chapter 4. Amended returns If you are a nonresident alien and the scholarship is not from U. Amended returns S. Amended returns sources, it is not subject to U. Amended returns S. Amended returns tax. Amended returns See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Amended returns S. Amended returns sources. Amended returns If your scholarship is from U. Amended returns S. Amended returns sources or you are a resident alien, your scholarship is subject to U. Amended returns S. Amended returns tax according to the following rules. Amended returns If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Amended returns However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Amended returns See Scholarships and Fellowship Grants in chapter 3 for more information. Amended returns If you are not a candidate for a degree, your scholarship is taxable. Amended returns Nonresident aliens cannot claim the standard deduction. Amended returns However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Amended returns You cannot claim the standard deduction allowed on Form 1040. Amended returns However, you can itemize any allowable deductions. Amended returns Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Amended returns However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Amended returns S. Amended returns trade or business. Amended returns See Itemized Deductions in chapter 5. Amended returns Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Amended returns S. Amended returns citizens. Amended returns However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Amended returns S. Amended returns tax return. Amended returns There are special rules for residents of Mexico, Canada, and South Korea; for U. Amended returns S. Amended returns nationals; and for students and business apprentices from India. Amended returns See Exemptions in chapter 5. Amended returns As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Amended returns Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Amended returns The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Amended returns You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Amended returns If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Amended returns See chapter 6 for more information on dual-status aliens. Amended returns If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Amended returns However, if you are married and choose to file a joint return with a U. Amended returns S. Amended returns citizen or resident spouse, you may be eligible for these credits. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Amended returns See Social Security and Medicare Taxes in chapter 8. Amended returns If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Amended returns If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Amended returns Do not use Form 843 to request a refund of Additional Medicare Tax. Amended returns See Refund of Taxes Withheld in Error in chapter 8. Amended returns Before leaving the United States, aliens generally must obtain a certificate of compliance. Amended returns This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Amended returns You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Amended returns These forms are discussed in chapter 11. Amended returns Form 1040-C is not an annual U. Amended returns S. Amended returns income tax return. Amended returns If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Amended returns Chapters 5 and 7 discuss filing an annual U. Amended returns S. Amended returns income tax return. Amended returns . Amended returns What is the difference between the taxation of income that is effectively connected with a trade or business in the United States and income that is not effectively connected with a trade or business in the United States? The difference between these two categories is that effectively connected income, after allowable deductions, is taxed at graduated rates. Amended returns These are the same rates that apply to U. Amended returns S. Amended returns citizens and residents. Amended returns Income that is not effectively connected is taxed at a flat 30% (or lower treaty) rate. Amended returns The term “exempt individual” does not refer to someone exempt from U. Amended returns S. Amended returns tax. Amended returns You were referred to as an exempt individual because as a student temporarily in the United States on an F Visa, you do not have to count the days you were present in the United States as a student during the first 5 years in determining if you are a resident alien under the substantial presence test. Amended returns See chapter 1 . Amended returns Generally, you cannot claim tax treaty benefits as a resident alien. Amended returns However, there are exceptions. Amended returns See Effect of Tax Treaties in chapter 1. Amended returns See also Resident Aliens under Some Typical Tax Treaty Benefits in chapter 9. Amended returns You must file Form 1040NR if you are engaged in a trade or business in the United States, or have any other U. Amended returns S. Amended returns source income on which tax was not fully paid by the amount withheld. Amended returns You can use Form 1040NR-EZ instead of Form 1040NR if you meet all 11 conditions listed under Form 1040NR-EZ in chapter 7. Amended returns You were a dual-status alien last year. Amended returns As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Amended returns However, for the part of the year that you were not present in the United States, you are a nonresident. Amended returns File Form 1040. Amended returns Print “Dual-Status Return” across the top. Amended returns Attach a statement showing your U. Amended returns S. Amended returns source income for the part of the year you were a nonresident. Amended returns You may use Form 1040NR as the statement. Amended returns Print “Dual-Status Statement” across the top. Amended returns See First Year of Residency in chapter 1 for rules on determining your residency starting date. Amended returns If you are an employee and you receive wages subject to U. Amended returns S. Amended returns income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Amended returns If you file for the 2013 calendar year, your return is due April 15, 2014. Amended returns If you are not an employee who receives wages subject to U. Amended returns S. Amended returns income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Amended returns For the 2013 calendar year, file your return by June 16, 2014. Amended returns For more information on when and where to file, see chapter 7 . Amended returns A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Amended returns If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Amended returns If you are a U. Amended returns S. Amended returns citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Amended returns Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Amended returns See Identification Number in chapter 5 for more information. Amended returns Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Amended returns However, nonresident aliens married to U. Amended returns S. Amended returns citizens or residents can choose to be treated as U. Amended returns S. Amended returns residents and file joint returns. Amended returns For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Assuming both of you had these visas for all of last year, you are a resident alien. Amended returns Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Amended returns You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Amended returns Your husband must file Form 1040NR or 1040NR-EZ. Amended returns No. Amended returns A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Amended returns See Effect of Tax Treaties in chapter 1. Amended returns You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Amended returns See chapter 6 . Amended returns The following rules apply if the dividends and capital gains are not effectively connected with a U. Amended returns S. Amended returns trade or business. Amended returns Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Amended returns See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Amended returns Dividends are generally taxed at a 30% (or lower treaty) rate. Amended returns The brokerage company or payor of the dividends should withhold this tax at source. Amended returns If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Amended returns If the capital gains and dividends are effectively connected with a U. Amended returns S. Amended returns trade or business, they are taxed according to the same rules and at the same rates that apply to U. Amended returns S. Amended returns citizens and residents. Amended returns If you are a nonresident alien, 85% of any U. Amended returns S. Amended returns social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Amended returns See The 30% Tax in chapter 4. Amended returns If you are a nonresident alien and the scholarship is not from U. Amended returns S. Amended returns sources, it is not subject to U. Amended returns S. Amended returns tax. Amended returns See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Amended returns S. Amended returns sources. Amended returns If your scholarship is from U. Amended returns S. Amended returns sources or you are a resident alien, your scholarship is subject to U. Amended returns S. Amended returns tax according to the following rules. Amended returns If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Amended returns However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Amended returns See Scholarships and Fellowship Grants in chapter 3 for more information. Amended returns If you are not a candidate for a degree, your scholarship is taxable. Amended returns Nonresident aliens cannot claim the standard deduction. Amended returns However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Amended returns You cannot claim the standard deduction allowed on Form 1040. Amended returns However, you can itemize any allowable deductions. Amended returns Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Amended returns However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Amended returns S. Amended returns trade or business. Amended returns See Itemized Deductions in chapter 5. Amended returns Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Amended returns S. Amended returns citizens. Amended returns However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Amended returns S. Amended returns tax return. Amended returns There are special rules for residents of Mexico, Canada, and South Korea; for U. Amended returns S. Amended returns nationals; and for students and business apprentices from India. Amended returns See Exemptions in chapter 5. Amended returns As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Amended returns Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Amended returns The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Amended returns You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Amended returns If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Amended returns See chapter 6 for more information on dual-status aliens. Amended returns If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Amended returns However, if you are married and choose to file a joint return with a U. Amended returns S. Amended returns citizen or resident spouse, you may be eligible for these credits. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Amended returns See Social Security and Medicare Taxes in chapter 8. Amended returns If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Amended returns If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Amended returns Do not use Form 843 to request a refund of Additional Medicare Tax. Amended returns See Refund of Taxes Withheld in Error in chapter 8. Amended returns Before leaving the United States, aliens generally must obtain a certificate of compliance. Amended returns This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Amended returns You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Amended returns These forms are discussed in chapter 11. Amended returns Form 1040-C is not an annual U. Amended returns S. Amended returns income tax return. Amended returns If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Amended returns Chapters 5 and 7 discuss filing an annual U. Amended returns S. Amended returns income tax return. Amended returns . Amended returns I am a student with an F-1 Visa. Amended returns I was told that I was an exempt individual. Amended returns Does this mean I am exempt from paying U. Amended returns S. Amended returns tax? The term “exempt individual” does not refer to someone exempt from U. Amended returns S. Amended returns tax. Amended returns You were referred to as an exempt individual because as a student temporarily in the United States on an F Visa, you do not have to count the days you were present in the United States as a student during the first 5 years in determining if you are a resident alien under the substantial presence test. Amended returns See chapter 1 . Amended returns Generally, you cannot claim tax treaty benefits as a resident alien. Amended returns However, there are exceptions. Amended returns See Effect of Tax Treaties in chapter 1. Amended returns See also Resident Aliens under Some Typical Tax Treaty Benefits in chapter 9. Amended returns You must file Form 1040NR if you are engaged in a trade or business in the United States, or have any other U. Amended returns S. Amended returns source income on which tax was not fully paid by the amount withheld. Amended returns You can use Form 1040NR-EZ instead of Form 1040NR if you meet all 11 conditions listed under Form 1040NR-EZ in chapter 7. Amended returns You were a dual-status alien last year. Amended returns As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Amended returns However, for the part of the year that you were not present in the United States, you are a nonresident. Amended returns File Form 1040. Amended returns Print “Dual-Status Return” across the top. Amended returns Attach a statement showing your U. Amended returns S. Amended returns source income for the part of the year you were a nonresident. Amended returns You may use Form 1040NR as the statement. Amended returns Print “Dual-Status Statement” across the top. Amended returns See First Year of Residency in chapter 1 for rules on determining your residency starting date. Amended returns If you are an employee and you receive wages subject to U. Amended returns S. Amended returns income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Amended returns If you file for the 2013 calendar year, your return is due April 15, 2014. Amended returns If you are not an employee who receives wages subject to U. Amended returns S. Amended returns income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Amended returns For the 2013 calendar year, file your return by June 16, 2014. Amended returns For more information on when and where to file, see chapter 7 . Amended returns A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Amended returns If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Amended returns If you are a U. Amended returns S. Amended returns citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Amended returns Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Amended returns See Identification Number in chapter 5 for more information. Amended returns Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Amended returns However, nonresident aliens married to U. Amended returns S. Amended returns citizens or residents can choose to be treated as U. Amended returns S. Amended returns residents and file joint returns. Amended returns For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Assuming both of you had these visas for all of last year, you are a resident alien. Amended returns Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Amended returns You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Amended returns Your husband must file Form 1040NR or 1040NR-EZ. Amended returns No. Amended returns A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Amended returns See Effect of Tax Treaties in chapter 1. Amended returns You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Amended returns See chapter 6 . Amended returns The following rules apply if the dividends and capital gains are not effectively connected with a U. Amended returns S. Amended returns trade or business. Amended returns Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Amended returns See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Amended returns Dividends are generally taxed at a 30% (or lower treaty) rate. Amended returns The brokerage company or payor of the dividends should withhold this tax at source. Amended returns If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Amended returns If the capital gains and dividends are effectively connected with a U. Amended returns S. Amended returns trade or business, they are taxed according to the same rules and at the same rates that apply to U. Amended returns S. Amended returns citizens and residents. Amended returns If you are a nonresident alien, 85% of any U. Amended returns S. Amended returns social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Amended returns See The 30% Tax in chapter 4. Amended returns If you are a nonresident alien and the scholarship is not from U. Amended returns S. Amended returns sources, it is not subject to U. Amended returns S. Amended returns tax. Amended returns See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Amended returns S. Amended returns sources. Amended returns If your scholarship is from U. Amended returns S. Amended returns sources or you are a resident alien, your scholarship is subject to U. Amended returns S. Amended returns tax according to the following rules. Amended returns If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Amended returns However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Amended returns See Scholarships and Fellowship Grants in chapter 3 for more information. Amended returns If you are not a candidate for a degree, your scholarship is taxable. Amended returns Nonresident aliens cannot claim the standard deduction. Amended returns However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Amended returns You cannot claim the standard deduction allowed on Form 1040. Amended returns However, you can itemize any allowable deductions. Amended returns Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Amended returns However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Amended returns S. Amended returns trade or business. Amended returns See Itemized Deductions in chapter 5. Amended returns Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Amended returns S. Amended returns citizens. Amended returns However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Amended returns S. Amended returns tax return. Amended returns There are special rules for residents of Mexico, Canada, and South Korea; for U. Amended returns S. Amended returns nationals; and for students and business apprentices from India. Amended returns See Exemptions in chapter 5. Amended returns As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Amended returns Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Amended returns The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Amended returns You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Amended returns If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Amended returns See chapter 6 for more information on dual-status aliens. Amended returns If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Amended returns However, if you are married and choose to file a joint return with a U. Amended returns S. Amended returns citizen or resident spouse, you may be eligible for these credits. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Amended returns See Social Security and Medicare Taxes in chapter 8. Amended returns If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Amended returns If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Amended returns Do not use Form 843 to request a refund of Additional Medicare Tax. Amended returns See Refund of Taxes Withheld in Error in chapter 8. Amended returns Before leaving the United States, aliens generally must obtain a certificate of compliance. Amended returns This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Amended returns You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Amended returns These forms are discussed in chapter 11. Amended returns Form 1040-C is not an annual U. Amended returns S. Amended returns income tax return. Amended returns If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Amended returns Chapters 5 and 7 discuss filing an annual U. Amended returns S. Amended returns income tax return. Amended returns . Amended returns I am a resident alien. Amended returns Can I claim any treaty benefits? Generally, you cannot claim tax treaty benefits as a resident alien. Amended returns However, there are exceptions. Amended returns See Effect of Tax Treaties in chapter 1. Amended returns See also Resident Aliens under Some Typical Tax Treaty Benefits in chapter 9. Amended returns You must file Form 1040NR if you are engaged in a trade or business in the United States, or have any other U. Amended returns S. Amended returns source income on which tax was not fully paid by the amount withheld. Amended returns You can use Form 1040NR-EZ instead of Form 1040NR if you meet all 11 conditions listed under Form 1040NR-EZ in chapter 7. Amended returns You were a dual-status alien last year. Amended returns As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Amended returns However, for the part of the year that you were not present in the United States, you are a nonresident. Amended returns File Form 1040. Amended returns Print “Dual-Status Return” across the top. Amended returns Attach a statement showing your U. Amended returns S. Amended returns source income for the part of the year you were a nonresident. Amended returns You may use Form 1040NR as the statement. Amended returns Print “Dual-Status Statement” across the top. Amended returns See First Year of Residency in chapter 1 for rules on determining your residency starting date. Amended returns If you are an employee and you receive wages subject to U. Amended returns S. Amended returns income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Amended returns If you file for the 2013 calendar year, your return is due April 15, 2014. Amended returns If you are not an employee who receives wages subject to U. Amended returns S. Amended returns income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Amended returns For the 2013 calendar year, file your return by June 16, 2014. Amended returns For more information on when and where to file, see chapter 7 . Amended returns A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Amended returns If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Amended returns If you are a U. Amended returns S. Amended returns citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Amended returns Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Amended returns See Identification Number in chapter 5 for more information. Amended returns Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Amended returns However, nonresident aliens married to U. Amended returns S. Amended returns citizens or residents can choose to be treated as U. Amended returns S. Amended returns residents and file joint returns. Amended returns For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Assuming both of you had these visas for all of last year, you are a resident alien. Amended returns Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Amended returns You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Amended returns Your husband must file Form 1040NR or 1040NR-EZ. Amended returns No. Amended returns A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Amended returns See Effect of Tax Treaties in chapter 1. Amended returns You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Amended returns See chapter 6 . Amended returns The following rules apply if the dividends and capital gains are not effectively connected with a U. Amended returns S. Amended returns trade or business. Amended returns Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Amended returns See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Amended returns Dividends are generally taxed at a 30% (or lower treaty) rate. Amended returns The brokerage company or payor of the dividends should withhold this tax at source. Amended returns If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Amended returns If the capital gains and dividends are effectively connected with a U. Amended returns S. Amended returns trade or business, they are taxed according to the same rules and at the same rates that apply to U. Amended returns S. Amended returns citizens and residents. Amended returns If you are a nonresident alien, 85% of any U. Amended returns S. Amended returns social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Amended returns See The 30% Tax in chapter 4. Amended returns If you are a nonresident alien and the scholarship is not from U. Amended returns S. Amended returns sources, it is not subject to U. Amended returns S. Amended returns tax. Amended returns See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Amended returns S. Amended returns sources. Amended returns If your scholarship is from U. Amended returns S. Amended returns sources or you are a resident alien, your scholarship is subject to U. Amended returns S. Amended returns tax according to the following rules. Amended returns If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Amended returns However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Amended returns See Scholarships and Fellowship Grants in chapter 3 for more information. Amended returns If you are not a candidate for a degree, your scholarship is taxable. Amended returns Nonresident aliens cannot claim the standard deduction. Amended returns However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Amended returns You cannot claim the standard deduction allowed on Form 1040. Amended returns However, you can itemize any allowable deductions. Amended returns Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Amended returns However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Amended returns S. Amended returns trade or business. Amended returns See Itemized Deductions in chapter 5. Amended returns Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Amended returns S. Amended returns citizens. Amended returns However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Amended returns S. Amended returns tax return. Amended returns There are special rules for residents of Mexico, Canada, and South Korea; for U. Amended returns S. Amended returns nationals; and for students and business apprentices from India. Amended returns See Exemptions in chapter 5. Amended returns As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Amended returns Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Amended returns The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Amended returns You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Amended returns If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Amended returns See chapter 6 for more information on dual-status aliens. Amended returns If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Amended returns However, if you are married and choose to file a joint return with a U. Amended returns S. Amended returns citizen or resident spouse, you may be eligible for these credits. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Amended returns See Social Security and Medicare Taxes in chapter 8. Amended returns If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Amended returns If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Amended returns Do not use Form 843 to request a refund of Additional Medicare Tax. Amended returns See Refund of Taxes Withheld in Error in chapter 8. Amended returns Before leaving the United States, aliens generally must obtain a certificate of compliance. Amended returns This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Amended returns You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Amended returns These forms are discussed in chapter 11. Amended returns Form 1040-C is not an annual U. Amended returns S. Amended returns income tax return. Amended returns If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Amended returns Chapters 5 and 7 discuss filing an annual U. Amended returns S. Amended returns income tax return. Amended returns . Amended returns I am a nonresident alien with no dependents. Amended returns I am working temporarily for a U. Amended returns S. Amended returns company. Amended returns What return do I file? You must file Form 1040NR if you are engaged in a trade or business in the United States, or have any other U. Amended returns S. Amended returns source income on which tax was not fully paid by the amount withheld. Amended returns You can use Form 1040NR-EZ instead of Form 1040NR if you meet all 11 conditions listed under Form 1040NR-EZ in chapter 7. Amended returns You were a dual-status alien last year. Amended returns As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Amended returns However, for the part of the year that you were not present in the United States, you are a nonresident. Amended returns File Form 1040. Amended returns Print “Dual-Status Return” across the top. Amended returns Attach a statement showing your U. Amended returns S. Amended returns source income for the part of the year you were a nonresident. Amended returns You may use Form 1040NR as the statement. Amended returns Print “Dual-Status Statement” across the top. Amended returns See First Year of Residency in chapter 1 for rules on determining your residency starting date. Amended returns If you are an employee and you receive wages subject to U. Amended returns S. Amended returns income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Amended returns If you file for the 2013 calendar year, your return is due April 15, 2014. Amended returns If you are not an employee who receives wages subject to U. Amended returns S. Amended returns income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Amended returns For the 2013 calendar year, file your return by June 16, 2014. Amended returns For more information on when and where to file, see chapter 7 . Amended returns A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Amended returns If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Amended returns If you are a U. Amended returns S. Amended returns citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Amended returns Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Amended returns See Identification Number in chapter 5 for more information. Amended returns Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Amended returns However, nonresident aliens married to U. Amended returns S. Amended returns citizens or residents can choose to be treated as U. Amended returns S. Amended returns residents and file joint returns. Amended returns For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Assuming both of you had these visas for all of last year, you are a resident alien. Amended returns Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Amended returns You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Amended returns Your husband must file Form 1040NR or 1040NR-EZ. Amended returns No. Amended returns A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Amended returns See Effect of Tax Treaties in chapter 1. Amended returns You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Amended returns See chapter 6 . Amended returns The following rules apply if the dividends and capital gains are not effectively connected with a U. Amended returns S. Amended returns trade or business. Amended returns Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Amended returns See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Amended returns Dividends are generally taxed at a 30% (or lower treaty) rate. Amended returns The brokerage company or payor of the dividends should withhold this tax at source. Amended returns If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Amended returns If the capital gains and dividends are effectively connected with a U. Amended returns S. Amended returns trade or business, they are taxed according to the same rules and at the same rates that apply to U. Amended returns S. Amended returns citizens and residents. Amended returns If you are a nonresident alien, 85% of any U. Amended returns S. Amended returns social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Amended returns See The 30% Tax in chapter 4. Amended returns If you are a nonresident alien and the scholarship is not from U. Amended returns S. Amended returns sources, it is not subject to U. Amended returns S. Amended returns tax. Amended returns See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Amended returns S. Amended returns sources. Amended returns If your scholarship is from U. Amended returns S. Amended returns sources or you are a resident alien, your scholarship is subject to U. Amended returns S. Amended returns tax according to the following rules. Amended returns If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Amended returns However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Amended returns See Scholarships and Fellowship Grants in chapter 3 for more information. Amended returns If you are not a candidate for a degree, your scholarship is taxable. Amended returns Nonresident aliens cannot claim the standard deduction. Amended returns However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Amended returns You cannot claim the standard deduction allowed on Form 1040. Amended returns However, you can itemize any allowable deductions. Amended returns Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Amended returns However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Amended returns S. Amended returns trade or business. Amended returns See Itemized Deductions in chapter 5. Amended returns Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Amended returns S. Amended returns citizens. Amended returns However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Amended returns S. Amended returns tax return. Amended returns There are special rules for residents of Mexico, Canada, and South Korea; for U. Amended returns S. Amended returns nationals; and for students and business apprentices from India. Amended returns See Exemptions in chapter 5. Amended returns As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Amended returns Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Amended returns The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Amended returns You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Amended returns If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Amended returns See chapter 6 for more information on dual-status aliens. Amended returns If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Amended returns However, if you are married and choose to file a joint return with a U. Amended returns S. Amended returns citizen or resident spouse, you may be eligible for these credits. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Amended returns See Social Security and Medicare Taxes in chapter 8. Amended returns If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Amended returns If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Amended returns Do not use Form 843 to request a refund of Additional Medicare Tax. Amended returns See Refund of Taxes Withheld in Error in chapter 8. Amended returns Before leaving the United States, aliens generally must obtain a certificate of compliance. Amended returns This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Amended returns You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Amended returns These forms are discussed in chapter 11. Amended returns Form 1040-C is not an annual U. Amended returns S. Amended returns income tax return. Amended returns If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Amended returns Chapters 5 and 7 discuss filing an annual U. Amended returns S. Amended returns income tax return. Amended returns . Amended returns I came to the United States on June 30th of last year. Amended returns I have an H-1B Visa. Amended returns What is my tax status, resident alien or nonresident alien? What tax return do I file? You were a dual-status alien last year. Amended returns As a general rule, because you were in the United States for 183 days or more, you have met the substantial presence test and you are taxed as a resident. Amended returns However, for the part of the year that you were not present in the United States, you are a nonresident. Amended returns File Form 1040. Amended returns Print “Dual-Status Return” across the top. Amended returns Attach a statement showing your U. Amended returns S. Amended returns source income for the part of the year you were a nonresident. Amended returns You may use Form 1040NR as the statement. Amended returns Print “Dual-Status Statement” across the top. Amended returns See First Year of Residency in chapter 1 for rules on determining your residency starting date. Amended returns If you are an employee and you receive wages subject to U. Amended returns S. Amended returns income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Amended returns If you file for the 2013 calendar year, your return is due April 15, 2014. Amended returns If you are not an employee who receives wages subject to U. Amended returns S. Amended returns income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Amended returns For the 2013 calendar year, file your return by June 16, 2014. Amended returns For more information on when and where to file, see chapter 7 . Amended returns A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Amended returns If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Amended returns If you are a U. Amended returns S. Amended returns citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Amended returns Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Amended returns See Identification Number in chapter 5 for more information. Amended returns Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Amended returns However, nonresident aliens married to U. Amended returns S. Amended returns citizens or residents can choose to be treated as U. Amended returns S. Amended returns residents and file joint returns. Amended returns For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Assuming both of you had these visas for all of last year, you are a resident alien. Amended returns Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Amended returns You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Amended returns Your husband must file Form 1040NR or 1040NR-EZ. Amended returns No. Amended returns A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Amended returns See Effect of Tax Treaties in chapter 1. Amended returns You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Amended returns See chapter 6 . Amended returns The following rules apply if the dividends and capital gains are not effectively connected with a U. Amended returns S. Amended returns trade or business. Amended returns Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Amended returns See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Amended returns Dividends are generally taxed at a 30% (or lower treaty) rate. Amended returns The brokerage company or payor of the dividends should withhold this tax at source. Amended returns If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Amended returns If the capital gains and dividends are effectively connected with a U. Amended returns S. Amended returns trade or business, they are taxed according to the same rules and at the same rates that apply to U. Amended returns S. Amended returns citizens and residents. Amended returns If you are a nonresident alien, 85% of any U. Amended returns S. Amended returns social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Amended returns See The 30% Tax in chapter 4. Amended returns If you are a nonresident alien and the scholarship is not from U. Amended returns S. Amended returns sources, it is not subject to U. Amended returns S. Amended returns tax. Amended returns See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Amended returns S. Amended returns sources. Amended returns If your scholarship is from U. Amended returns S. Amended returns sources or you are a resident alien, your scholarship is subject to U. Amended returns S. Amended returns tax according to the following rules. Amended returns If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Amended returns However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Amended returns See Scholarships and Fellowship Grants in chapter 3 for more information. Amended returns If you are not a candidate for a degree, your scholarship is taxable. Amended returns Nonresident aliens cannot claim the standard deduction. Amended returns However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Amended returns You cannot claim the standard deduction allowed on Form 1040. Amended returns However, you can itemize any allowable deductions. Amended returns Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Amended returns However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Amended returns S. Amended returns trade or business. Amended returns See Itemized Deductions in chapter 5. Amended returns Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Amended returns S. Amended returns citizens. Amended returns However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Amended returns S. Amended returns tax return. Amended returns There are special rules for residents of Mexico, Canada, and South Korea; for U. Amended returns S. Amended returns nationals; and for students and business apprentices from India. Amended returns See Exemptions in chapter 5. Amended returns As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Amended returns Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Amended returns The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Amended returns You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Amended returns If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Amended returns See chapter 6 for more information on dual-status aliens. Amended returns If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Amended returns However, if you are married and choose to file a joint return with a U. Amended returns S. Amended returns citizen or resident spouse, you may be eligible for these credits. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose for which you were admitted to the United States. Amended returns See Social Security and Medicare Taxes in chapter 8. Amended returns If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Amended returns If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Amended returns Do not use Form 843 to request a refund of Additional Medicare Tax. Amended returns See Refund of Taxes Withheld in Error in chapter 8. Amended returns Before leaving the United States, aliens generally must obtain a certificate of compliance. Amended returns This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Amended returns You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Amended returns These forms are discussed in chapter 11. Amended returns Form 1040-C is not an annual U. Amended returns S. Amended returns income tax return. Amended returns If an income tax return is required by law, you must file that return even though you already filed a Form 1040-C. Amended returns Chapters 5 and 7 discuss filing an annual U. Amended returns S. Amended returns income tax return. Amended returns . Amended returns When is my Form 1040NR due? If you are an employee and you receive wages subject to U. Amended returns S. Amended returns income tax withholding, you must generally file by the 15th day of the 4th month after your tax year ends. Amended returns If you file for the 2013 calendar year, your return is due April 15, 2014. Amended returns If you are not an employee who receives wages subject to U. Amended returns S. Amended returns income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Amended returns For the 2013 calendar year, file your return by June 16, 2014. Amended returns For more information on when and where to file, see chapter 7 . Amended returns A social security number (SSN) must be furnished on returns, statements, and other tax-related documents. Amended returns If your spouse does not have and is not eligible to get an SSN, he must apply for an individual taxpayer identification number (ITIN). Amended returns If you are a U. Amended returns S. Amended returns citizen or resident and you choose to treat your nonresident spouse as a resident and file a joint tax return, your nonresident spouse needs an SSN or an ITIN. Amended returns Alien spouses who are claimed as exemptions or dependents are also required to furnish an SSN or an ITIN. Amended returns See Identification Number in chapter 5 for more information. Amended returns Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. Amended returns However, nonresident aliens married to U. Amended returns S. Amended returns citizens or residents can choose to be treated as U. Amended returns S. Amended returns residents and file joint returns. Amended returns For more information on this choice, see Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Assuming both of you had these visas for all of last year, you are a resident alien. Amended returns Your husband is a nonresident alien if he has not been in the United States as a student for more than 5 years. Amended returns You and your husband can file a joint tax return on Form 1040, 1040A, or 1040EZ if he makes the choice to be treated as a resident for the entire year. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns If your husband does not make this choice, you must file a separate return on Form 1040 or Form 1040A. Amended returns Your husband must file Form 1040NR or 1040NR-EZ. Amended returns No. Amended returns A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Amended returns See Effect of Tax Treaties in chapter 1. Amended returns You are a dual-status taxpayer when you are both a resident alien and a nonresident alien in the same year. Amended returns See chapter 6 . Amended returns The following rules apply if the dividends and capital gains are not effectively connected with a U. Amended returns S. Amended returns trade or business. Amended returns Capital gains are generally not taxable if you were in the United States for less than 183 days during the year. Amended returns See Sales or Exchanges of Capital Assets in chapter 4 for more information and exceptions. Amended returns Dividends are generally taxed at a 30% (or lower treaty) rate. Amended returns The brokerage company or payor of the dividends should withhold this tax at source. Amended returns If tax is not withheld at the correct rate, you must file Form 1040NR to receive a refund or pay any additional tax due. Amended returns If the capital gains and dividends are effectively connected with a U. Amended returns S. Amended returns trade or business, they are taxed according to the same rules and at the same rates that apply to U. Amended returns S. Amended returns citizens and residents. Amended returns If you are a nonresident alien, 85% of any U. Amended returns S. Amended returns social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Amended returns See The 30% Tax in chapter 4. Amended returns If you are a nonresident alien and the scholarship is not from U. Amended returns S. Amended returns sources, it is not subject to U. Amended returns S. Amended returns tax. Amended returns See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your scholarship is from U. Amended returns S. Amended returns sources. Amended returns If your scholarship is from U. Amended returns S. Amended returns sources or you are a resident alien, your scholarship is subject to U. Amended returns S. Amended returns tax according to the following rules. Amended returns If you are a candidate for a degree, you may be able to exclude from your income the part of the scholarship you use to pay for tuition, fees, books, supplies, and equipment required by the educational institution. Amended returns However, the part of the scholarship you use to pay for other expenses, such as room and board, is taxable. Amended returns See Scholarships and Fellowship Grants in chapter 3 for more information. Amended returns If you are not a candidate for a degree, your scholarship is taxable. Amended returns Nonresident aliens cannot claim the standard deduction. Amended returns However, see Students and business apprentices from India , under Itemized Deductions in chapter 5 for an exception. Amended returns You cannot claim the standard deduction allowed on Form 1040. Amended returns However, you can itemize any allowable deductions. Amended returns Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Amended returns However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Amended returns S. Amended returns trade or business. Amended returns See Itemized Deductions in chapter 5. Amended returns Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Amended returns S. Amended returns citizens. Amended returns However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Amended returns S. Amended returns tax return. Amended returns There are special rules for residents of Mexico, Canada, and South Korea; for U. Amended returns S. Amended returns nationals; and for students and business apprentices from India. Amended returns See Exemptions in chapter 5. Amended returns As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Amended returns Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Amended returns The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Amended returns You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Amended returns If you are a nonresident alien for any part of the year, you cannot claim the earned income credit. Amended returns See chapter 6 for more information on dual-status aliens. Amended returns If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Amended returns However, if you are married and choose to file a joint return with a U. Amended returns S. Amended returns citizen or resident spouse, you may be eligible for these credits. Amended returns See Nonresident Spouse Treated as a Resident in chapter 1. Amended returns Generally, services you perform as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if you perform the services to carry out the purpose
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Page Last Reviewed or Updated: 11-Feb-2014

The Amended Returns

Amended returns 4. Amended returns   Qualified Plans Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Kinds of PlansDefined Contribution Plan Defined Benefit Plan Qualification RulesEarly retirement. Amended returns Loan secured by benefits. Amended returns Waiver of survivor benefits. Amended returns Waiver of 30-day waiting period before annuity starting date. Amended returns Involuntary cash-out of benefits not more than dollar limit. Amended returns Exception for certain loans. Amended returns Exception for QDRO. Amended returns SIMPLE and safe harbor 401(k) plan exception. Amended returns Setting Up a Qualified PlanAdopting a Written Plan Investing Plan Assets Minimum Funding RequirementDue dates. Amended returns Installment percentage. Amended returns Extended period for making contributions. Amended returns ContributionsEmployer Contributions Employee Contributions When Contributions Are Considered Made Employer DeductionDeduction Limits Deduction Limit for Self-Employed Individuals Where To Deduct Contributions Carryover of Excess Contributions Excise Tax for Nondeductible (Excess) Contributions Elective Deferrals (401(k) Plans)Limit on Elective Deferrals Automatic Enrollment Treatment of Excess Deferrals Qualified Roth Contribution ProgramElective Deferrals Qualified Distributions Reporting Requirements DistributionsRequired Distributions Distributions From 401(k) Plans Tax Treatment of Distributions Tax on Early Distributions Tax on Excess Benefits Excise Tax on Reversion of Plan Assets Notification of Significant Benefit Accrual Reduction Prohibited TransactionsTax on Prohibited Transactions Reporting RequirementsOne-participant plan. Amended returns Caution: Form 5500-EZ not required. Amended returns Form 5500. Amended returns Electronic filing of Forms 5500 and 5500-SF. Amended returns Topics - This chapter discusses: Kinds of plans Qualification rules Setting up a qualified plan Minimum funding requirement Contributions Employer deduction Elective deferrals (401(k) plans) Qualified Roth contribution program Distributions Prohibited transactions Reporting requirements Useful Items - You may want to see: Publications 575 Pension and Annuity Income 590 Individual Retirement Arrangements (IRAs) 3066 Have you had your Check-up this year? for Retirement Plans 3998 Choosing A Retirement Solution for Your Small Business 4222 401(k) Plans for Small Businesses 4530 Designated Roth Accounts under a 401(k), 403(b), or governmental 457(b) plans 4531 401(k) Plan Checklist 4674 Automatic Enrollment 401(k) Plans for Small Businesses 4806 Profit Sharing Plans for Small Businesses Forms (and Instructions) www. Amended returns dol. Amended returns gov/ebsa/pdf/2013-5500. Amended returns pdf www. Amended returns dol. Amended returns gov/ebsa/pdf/2013-5500-SF. Amended returns pdf W-2 Wage and Tax Statement Schedule K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. Amended returns 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Amended returns 1040 U. Amended returns S. Amended returns Individual Income Tax Return Schedule C (Form 1040) Profit or Loss From Business Schedule F (Form 1040) Profit or Loss From Farming 5300 Application for Determination for Employee Benefit Plan 5310 Application for Determination for Terminating Plan 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 5330 Return of Excise Taxes Related to Employee Benefit Plans 5500 Annual Return/Report of Employee Benefit Plan. Amended returns For copies of this form, go to: 5500-EZ Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan. Amended returns For copies of this form, go to: 8717 User Fee for Employee Plan Determination Letter Request 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs 8955-SSA Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits These qualified retirement plans set up by self-employed individuals are sometimes called Keogh or H. Amended returns R. Amended returns 10 plans. Amended returns A sole proprietor or a partnership can set up one of these plans. Amended returns A common-law employee or a partner cannot set up one of these plans. Amended returns The plans described here can also be set up and maintained by employers that are corporations. Amended returns All the rules discussed here apply to corporations except where specifically limited to the self-employed. Amended returns The plan must be for the exclusive benefit of employees or their beneficiaries. Amended returns These qualified plans can include coverage for a self-employed individual. Amended returns As an employer, you can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Amended returns The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Amended returns Kinds of Plans There are two basic kinds of qualified plans—defined contribution plans and defined benefit plans—and different rules apply to each. Amended returns You can have more than one qualified plan, but your contributions to all the plans must not total more than the overall limits discussed under Contributions and Employer Deduction, later. Amended returns Defined Contribution Plan A defined contribution plan provides an individual account for each participant in the plan. Amended returns It provides benefits to a participant largely based on the amount contributed to that participant's account. Amended returns Benefits are also affected by any income, expenses, gains, losses, and forfeitures of other accounts that may be allocated to an account. Amended returns A defined contribution plan can be either a profit-sharing plan or a money purchase pension plan. Amended returns Profit-sharing plan. Amended returns   Although it is called a “profit-sharing plan,” you do not actually have to make a business profit for the year in order to make a contribution (except for yourself if you are self-employed as discussed under Self-employed Individual, later). Amended returns A profit-sharing plan can be set up to allow for discretionary employer contributions, meaning the amount contributed each year to the plan is not fixed. Amended returns An employer may even make no contribution to the plan for a given year. Amended returns   The plan must provide a definite formula for allocating the contribution among the participants and for distributing the accumulated funds to the employees after they reach a certain age, after a fixed number of years, or upon certain other occurrences. Amended returns   In general, you can be more flexible in making contributions to a profit-sharing plan than to a money purchase pension plan (discussed next) or a defined benefit plan (discussed later). Amended returns Money purchase pension plan. Amended returns   Contributions to a money purchase pension plan are fixed and are not based on your business profits. Amended returns For example, if the plan requires that contributions be 10% of the participants' compensation without regard to whether you have profits (or the self-employed person has earned income), the plan is a money purchase pension plan. Amended returns This applies even though the compensation of a self-employed individual as a participant is based on earned income derived from business profits. Amended returns Defined Benefit Plan A defined benefit plan is any plan that is not a defined contribution plan. Amended returns Contributions to a defined benefit plan are based on what is needed to provide definitely determinable benefits to plan participants. Amended returns Actuarial assumptions and computations are required to figure these contributions. Amended returns Generally, you will need continuing professional help to have a defined benefit plan. Amended returns Qualification Rules To qualify for the tax benefits available to qualified plans, a plan must meet certain requirements (qualification rules) of the tax law. Amended returns Generally, unless you write your own plan, the financial institution that provided your plan will take the continuing responsibility for meeting qualification rules that are later changed. Amended returns The following is a brief overview of important qualification rules that generally have not yet been discussed. Amended returns It is not intended to be all-inclusive. Amended returns See Setting Up a Qualified Plan , later. Amended returns Generally, the following qualification rules also apply to a SIMPLE 401(k) retirement plan. Amended returns A SIMPLE 401(k) plan is, however, not subject to the top-heavy plan rules and nondiscrimination rules if the plan satisfies the provisions discussed in chapter 3 under SIMPLE 401(k) Plan. Amended returns Plan assets must not be diverted. Amended returns   Your plan must make it impossible for its assets to be used for, or diverted to, purposes other than the benefit of employees and their beneficiaries. Amended returns As a general rule, the assets cannot be diverted to the employer. Amended returns Minimum coverage requirement must be met. Amended returns   To be a qualified plan, a defined benefit plan must benefit at least the lesser of the following. Amended returns 50 employees, or The greater of: 40% of all employees, or Two employees. Amended returns If there is only one employee, the plan must benefit that employee. Amended returns Contributions or benefits must not discriminate. Amended returns   Under the plan, contributions or benefits to be provided must not discriminate in favor of highly compensated employees. Amended returns Contributions and benefits must not be more than certain limits. Amended returns   Your plan must not provide for contributions or benefits that are more than certain limits. Amended returns The limits apply to the annual contributions and other additions to the account of a participant in a defined contribution plan and to the annual benefit payable to a participant in a defined benefit plan. Amended returns These limits are discussed later in this chapter under Contributions. Amended returns Minimum vesting standard must be met. Amended returns   Your plan must satisfy certain requirements regarding when benefits vest. Amended returns A benefit is vested (you have a fixed right to it) when it becomes nonforfeitable. Amended returns A benefit is nonforfeitable if it cannot be lost upon the happening, or failure to happen, of any event. Amended returns Special rules apply to forfeited benefit amounts. Amended returns In defined contribution plans, forfeitures can be allocated to the accounts of remaining participants in a nondiscriminatory way, or they can be used to reduce your contributions. Amended returns   Forfeitures under a defined benefit plan cannot be used to increase the benefits any employee would otherwise receive under the plan. Amended returns Forfeitures must be used instead to reduce employer contributions. Amended returns Participation. Amended returns   In general, an employee must be allowed to participate in your plan if he or she meets both the following requirements. Amended returns Has reached age 21. Amended returns Has at least 1 year of service (2 years if the plan is not a 401(k) plan and provides that after not more than 2 years of service the employee has a nonforfeitable right to all his or her accrued benefit). Amended returns A plan cannot exclude an employee because he or she has reached a specified age. Amended returns Leased employee. Amended returns   A leased employee, defined in chapter 1, who performs services for you (recipient of the services) is treated as your employee for certain plan qualification rules. Amended returns These rules include those in all the following areas. Amended returns Nondiscrimination in coverage, contributions, and benefits. Amended returns Minimum age and service requirements. Amended returns Vesting. Amended returns Limits on contributions and benefits. Amended returns Top-heavy plan requirements. Amended returns Contributions or benefits provided by the leasing organization for services performed for you are treated as provided by you. Amended returns Benefit payment must begin when required. Amended returns   Your plan must provide that, unless the participant chooses otherwise, the payment of benefits to the participant must begin within 60 days after the close of the latest of the following periods. Amended returns The plan year in which the participant reaches the earlier of age 65 or the normal retirement age specified in the plan. Amended returns The plan year in which the 10th anniversary of the year in which the participant began participating in the plan occurs. Amended returns The plan year in which the participant separates from service. Amended returns Early retirement. Amended returns   Your plan can provide for payment of retirement benefits before the normal retirement age. Amended returns If your plan offers an early retirement benefit, a participant who separates from service before satisfying the early retirement age requirement is entitled to that benefit if he or she meets both the following requirements. Amended returns Satisfies the service requirement for the early retirement benefit. Amended returns Separates from service with a nonforfeitable right to an accrued benefit. Amended returns The benefit, which may be actuarially reduced, is payable when the early retirement age requirement is met. Amended returns Required minimum distributions. Amended returns   Special rules require minimum annual distributions from qualified plans, generally beginning after age  70½. Amended returns See Required Distributions , under Distributions, later. Amended returns Survivor benefits. Amended returns   Defined benefit and money purchase pension plans must provide automatic survivor benefits in both the following forms. Amended returns A qualified joint and survivor annuity for a vested participant who does not die before the annuity starting date. Amended returns A qualified pre-retirement survivor annuity for a vested participant who dies before the annuity starting date and who has a surviving spouse. Amended returns   The automatic survivor benefit also applies to any participant under a profit-sharing plan unless all the following conditions are met. Amended returns The participant does not choose benefits in the form of a life annuity. Amended returns The plan pays the full vested account balance to the participant's surviving spouse (or other beneficiary if the surviving spouse consents or if there is no surviving spouse) if the participant dies. Amended returns The plan is not a direct or indirect transferee of a plan that must provide automatic survivor benefits. Amended returns Loan secured by benefits. Amended returns   If automatic survivor benefits are required for a spouse under a plan, he or she must consent to a loan that uses as security the accrued benefits in the plan. Amended returns Waiver of survivor benefits. Amended returns   Each plan participant may be permitted to waive the joint and survivor annuity or the pre-retirement survivor annuity (or both), but only if the participant has the written consent of the spouse. Amended returns The plan also must allow the participant to withdraw the waiver. Amended returns The spouse's consent must be witnessed by a plan representative or notary public. Amended returns Waiver of 30-day waiting period before annuity starting date. Amended returns    A plan may permit a participant to waive (with spousal consent) the 30-day minimum waiting period after a written explanation of the terms and conditions of a joint and survivor annuity is provided to each participant. Amended returns   The waiver is allowed only if the distribution begins more than 7 days after the written explanation is provided. Amended returns Involuntary cash-out of benefits not more than dollar limit. Amended returns   A plan may provide for the immediate distribution of the participant's benefit under the plan if the present value of the benefit is not greater than $5,000. Amended returns   However, the distribution cannot be made after the annuity starting date unless the participant and the spouse or surviving spouse of a participant who died (if automatic survivor benefits are required for a spouse under the plan) consents in writing to the distribution. Amended returns If the present value is greater than $5,000, the plan must have the written consent of the participant and the spouse or surviving spouse (if automatic survivor benefits are required for a spouse under the plan) for any immediate distribution of the benefit. Amended returns   Benefits attributable to rollover contributions and earnings on them can be ignored in determining the present value of these benefits. Amended returns   A plan must provide for the automatic rollover of any cash-out distribution of more than $1,000 to an individual retirement account or annuity, unless the participant chooses otherwise. Amended returns A section 402(f) notice must be sent prior to an involuntary cash-out of an eligible rollover distribution. Amended returns See Section 402(f) Notice under Distributions, later, for more details. Amended returns Consolidation, merger, or transfer of assets or liabilities. Amended returns   Your plan must provide that, in the case of any merger or consolidation with, or transfer of assets or liabilities to, any other plan, each participant would (if the plan then terminated) receive a benefit equal to or more than the benefit he or she would have been entitled to just before the merger, etc. Amended returns (if the plan had then terminated). Amended returns Benefits must not be assigned or alienated. Amended returns   Your plan must provide that a participant's or beneficiary's benefits under the plan cannot be taken away by any legal or equitable proceeding except as provided below or pursuant to certain judgements or settlements against the participant for violations of plan rules. Amended returns Exception for certain loans. Amended returns   A loan from the plan (not from a third party) to a participant or beneficiary is not treated as an assignment or alienation if the loan is secured by the participant's accrued nonforfeitable benefit and is exempt from the tax on prohibited transactions under section 4975(d)(1) or would be exempt if the participant were a disqualified person. Amended returns A disqualified person is defined later in this chapter under Prohibited Transactions. Amended returns Exception for QDRO. Amended returns   Compliance with a QDRO (qualified domestic relations order) does not result in a prohibited assignment or alienation of benefits. Amended returns   Payments to an alternate payee under a QDRO before the participant attains age 59½ are not subject to the 10% additional tax that would otherwise apply under certain circumstances. Amended returns Benefits distributed to an alternate payee under a QDRO can be rolled over tax free to an individual retirement account or to an individual retirement annuity. Amended returns No benefit reduction for social security increases. Amended returns   Your plan must not permit a benefit reduction for a post-separation increase in the social security benefit level or wage base for any participant or beneficiary who is receiving benefits under your plan, or who is separated from service and has nonforfeitable rights to benefits. Amended returns This rule also applies to plans supplementing the benefits provided by other federal or state laws. Amended returns Elective deferrals must be limited. Amended returns   If your plan provides for elective deferrals, it must limit those deferrals to the amount in effect for that particular year. Amended returns See Limit on Elective Deferrals later in this chapter. Amended returns Top-heavy plan requirements. Amended returns   A top-heavy plan is one that mainly favors partners, sole proprietors, and other key employees. Amended returns   A plan is top-heavy for a plan year if, for the preceding plan year, the total value of accrued benefits or account balances of key employees is more than 60% of the total value of accrued benefits or account balances of all employees. Amended returns Additional requirements apply to a top-heavy plan primarily to provide minimum benefits or contributions for non-key employees covered by the plan. Amended returns   Most qualified plans, whether or not top-heavy, must contain provisions that meet the top-heavy requirements and will take effect in plan years in which the plans are top-heavy. Amended returns These qualification requirements for top-heavy plans are explained in section 416 and its regulations. Amended returns SIMPLE and safe harbor 401(k) plan exception. Amended returns   The top-heavy plan requirements do not apply to SIMPLE 401(k) plans, discussed earlier in chapter 3, or to safe harbor 401(k) plans that consist solely of safe harbor contributions, discussed later in this chapter. Amended returns QACAs (discussed later) also are not subject to top-heavy requirements. Amended returns Setting Up a Qualified Plan There are two basic steps in setting up a qualified plan. Amended returns First you adopt a written plan. Amended returns Then you invest the plan assets. Amended returns You, the employer, are responsible for setting up and maintaining the plan. Amended returns If you are self-employed, it is not necessary to have employees besides yourself to sponsor and set up a qualified plan. Amended returns If you have employees, see Participation, under Qualification Rules, earlier. Amended returns Set-up deadline. Amended returns   To take a deduction for contributions for a tax year, your plan must be set up (adopted) by the last day of that year (December 31 for calendar-year employers). Amended returns Credit for startup costs. Amended returns   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a qualified plan that first became effective in 2013. Amended returns For more information, see Credit for startup costs under Reminders, earlier. Amended returns Adopting a Written Plan You must adopt a written plan. Amended returns The plan can be an IRS-approved master or prototype plan offered by a sponsoring organization. Amended returns Or it can be an individually designed plan. Amended returns Written plan requirement. Amended returns   To qualify, the plan you set up must be in writing and must be communicated to your employees. Amended returns The plan's provisions must be stated in the plan. Amended returns It is not sufficient for the plan to merely refer to a requirement of the Internal Revenue Code. Amended returns Master or prototype plans. Amended returns   Most qualified plans follow a standard form of plan (a master or prototype plan) approved by the IRS. Amended returns Master and prototype plans are plans made available by plan providers for adoption by employers (including self-employed individuals). Amended returns Under a master plan, a single trust or custodial account is established, as part of the plan, for the joint use of all adopting employers. Amended returns Under a prototype plan, a separate trust or custodial account is established for each employer. Amended returns Plan providers. Amended returns   The following organizations generally can provide IRS-approved master or prototype plans. Amended returns Banks (including some savings and loan associations and federally insured credit unions). Amended returns Trade or professional organizations. Amended returns Insurance companies. Amended returns Mutual funds. Amended returns Individually designed plan. Amended returns   If you prefer, you can set up an individually designed plan to meet specific needs. Amended returns Although advance IRS approval is not required, you can apply for approval by paying a fee and requesting a determination letter. Amended returns You may need professional help for this. Amended returns See Rev. Amended returns Proc. Amended returns 2014-6, 2014-1 I. Amended returns R. Amended returns B. Amended returns 198, available at www. Amended returns irs. Amended returns gov/irb/2014-1_IRB/ar10. Amended returns html, as annually updated, that may help you decide whether to apply for approval. Amended returns Internal Revenue Bulletins are available on the IRS website at IRS. Amended returns gov They are also available at most IRS offices and at certain libraries. Amended returns User fee. Amended returns   The fee mentioned earlier for requesting a determination letter does not apply to employers who have 100 or fewer employees who received at least $5,000 of compensation from the employer for the preceding year. Amended returns At least one of them must be a non-highly compensated employee participating in the plan. Amended returns The fee does not apply to requests made by the later of the following dates. Amended returns The end of the 5th plan year the plan is in effect. Amended returns The end of any remedial amendment period for the plan that begins within the first 5 plan years. Amended returns The request cannot be made by the sponsor of a prototype or similar plan the sponsor intends to market to participating employers. Amended returns   For more information about whether the user fee applies, see Rev. Amended returns Proc. Amended returns 2014-8, 2014-1 I. Amended returns R. Amended returns B. Amended returns 242, available at www. Amended returns irs. Amended returns gov/irb/2014-1_IRB/ar12. Amended returns html, as may be annually updated; Notice 2003-49, 2003-32 I. Amended returns R. Amended returns B. Amended returns 294, available at www. Amended returns irs. Amended returns gov/irb/2003-32_IRB/ar13. Amended returns html; and Notice 2011-86, 2011-45 I. Amended returns R. Amended returns B. Amended returns 698, available at www. Amended returns irs. Amended returns gov/irb/2011-45_IRB/ar11. Amended returns html. Amended returns Investing Plan Assets In setting up a qualified plan, you arrange how the plan's funds will be used to build its assets. Amended returns You can establish a trust or custodial account to invest the funds. Amended returns You, the trust, or the custodial account can buy an annuity contract from an insurance company. Amended returns Life insurance can be included only if it is incidental to the retirement benefits. Amended returns You set up a trust by a legal instrument (written document). Amended returns You may need professional help to do this. Amended returns You can set up a custodial account with a bank, savings and loan association, credit union, or other person who can act as the plan trustee. Amended returns You do not need a trust or custodial account, although you can have one, to invest the plan's funds in annuity contracts or face-amount certificates. Amended returns If anyone other than a trustee holds them, however, the contracts or certificates must state they are not transferable. Amended returns Other plan requirements. Amended returns   For information on other important plan requirements, see Qualification Rules , earlier in this chapter. Amended returns Minimum Funding Requirement In general, if your plan is a money purchase pension plan or a defined benefit plan, you must actually pay enough into the plan to satisfy the minimum funding standard for each year. Amended returns Determining the amount needed to satisfy the minimum funding standard for a defined benefit plan is complicated, and you should seek professional help in order to meet these contribution requirements. Amended returns For information on this funding requirement, see section 412 and its regulations. Amended returns Quarterly installments of required contributions. Amended returns   If your plan is a defined benefit plan subject to the minimum funding requirements, you generally must make quarterly installment payments of the required contributions. Amended returns If you do not pay the full installments timely, you may have to pay interest on any underpayment for the period of the underpayment. Amended returns Due dates. Amended returns   The due dates for the installments are 15 days after the end of each quarter. Amended returns For a calendar-year plan, the installments are due April 15, July 15, October 15, and January 15 (of the following year). Amended returns Installment percentage. Amended returns   Each quarterly installment must be 25% of the required annual payment. Amended returns Extended period for making contributions. Amended returns   Additional contributions required to satisfy the minimum funding requirement for a plan year will be considered timely if made by 8½ months after the end of that year. Amended returns Contributions A qualified plan is generally funded by your contributions. Amended returns However, employees participating in the plan may be permitted to make contributions, and you may be permitted to make contributions on your own behalf. Amended returns See Employee Contributions and Elective Deferrals later. Amended returns Contributions deadline. Amended returns   You can make deductible contributions for a tax year up to the due date of your return (plus extensions) for that year. Amended returns Self-employed individual. Amended returns   You can make contributions on behalf of yourself only if you have net earnings (compensation) from self-employment in the trade or business for which the plan was set up. Amended returns Your net earnings must be from your personal services, not from your investments. Amended returns If you have a net loss from self-employment, you cannot make contributions for yourself for the year, even if you can contribute for common-law employees based on their compensation. Amended returns Employer Contributions There are certain limits on the contributions and other annual additions you can make each year for plan participants. Amended returns There are also limits on the amount you can deduct. Amended returns See Deduction Limits , later. Amended returns Limits on Contributions and Benefits Your plan must provide that contributions or benefits cannot exceed certain limits. Amended returns The limits differ depending on whether your plan is a defined contribution plan or a defined benefit plan. Amended returns Defined benefit plan. Amended returns   For 2013, the annual benefit for a participant under a defined benefit plan cannot exceed the lesser of the following amounts. Amended returns 100% of the participant's average compensation for his or her highest 3 consecutive calendar years. Amended returns $205,000 ($210,000 for 2014). Amended returns Defined contribution plan. Amended returns   For 2013, a defined contribution plan's annual contributions and other additions (excluding earnings) to the account of a participant cannot exceed the lesser of the following amounts. Amended returns 100% of the participant's compensation. Amended returns $51,000 ($52,000 for 2014). Amended returns   Catch-up contributions (discussed later under Limit on Elective Deferrals) are not subject to the above limit. Amended returns Employee Contributions Participants may be permitted to make nondeductible contributions to a plan in addition to your contributions. Amended returns Even though these employee contributions are not deductible, the earnings on them are tax free until distributed in later years. Amended returns Also, these contributions must satisfy the actual contribution percentage (ACP) test of section 401(m)(2), a nondiscrimination test that applies to employee contributions and matching contributions. Amended returns See Regulations sections 1. Amended returns 401(k)-2 and 1. Amended returns 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Amended returns When Contributions Are Considered Made You generally apply your plan contributions to the year in which you make them. Amended returns But you can apply them to the previous year if all the following requirements are met. Amended returns You make them by the due date of your tax return for the previous year (plus extensions). Amended returns The plan was established by the end of the previous year. Amended returns The plan treats the contributions as though it had received them on the last day of the previous year. Amended returns You do either of the following. Amended returns You specify in writing to the plan administrator or trustee that the contributions apply to the previous year. Amended returns You deduct the contributions on your tax return for the previous year. Amended returns A partnership shows contributions for partners on Form 1065. Amended returns Employer's promissory note. Amended returns   Your promissory note made out to the plan is not a payment that qualifies for the deduction. Amended returns Also, issuing this note is a prohibited transaction subject to tax. Amended returns See Prohibited Transactions , later. Amended returns Employer Deduction You can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Amended returns The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Amended returns Deduction Limits The deduction limit for your contributions to a qualified plan depends on the kind of plan you have. Amended returns Defined contribution plans. Amended returns   The deduction for contributions to a defined contribution plan (profit-sharing plan or money purchase pension plan) cannot be more than 25% of the compensation paid (or accrued) during the year to your eligible employees participating in the plan. Amended returns If you are self-employed, you must reduce this limit in figuring the deduction for contributions you make for your own account. Amended returns See Deduction Limit for Self-Employed Individuals , later. Amended returns   When figuring the deduction limit, the following rules apply. Amended returns Elective deferrals (discussed later) are not subject to the limit. Amended returns Compensation includes elective deferrals. Amended returns The maximum compensation that can be taken into account for each employee in 2013 is $255,000 ($260,000 for 2014). Amended returns Defined benefit plans. Amended returns   The deduction for contributions to a defined benefit plan is based on actuarial assumptions and computations. Amended returns Consequently, an actuary must figure your deduction limit. Amended returns    In figuring the deduction for contributions, you cannot take into account any contributions or benefits that are more than the limits discussed earlier under Limits on Contributions and Benefits, earlier. Amended returns Table 4–1. Amended returns Carryover of Excess Contributions Illustrated—Profit-Sharing Plan (000's omitted) Year Participants' compensation Participants' share of required contribution (10% of annual profit) Deductible  limit for current year (25% of compensation) Contribution Excess contribution carryover used1 Total  deduction including carryovers Excess contribution carryover available at end of year 2010 $1,000 $100 $250 $100 $ 0 $100 $ 0 2011 400 165 100 165 0 100 65 2012 500 100 125 100 25 125 40 2013 600 100 150 100 40 140 0  1There were no carryovers from years before 2010. Amended returns Deduction Limit for Self-Employed Individuals If you make contributions for yourself, you need to make a special computation to figure your maximum deduction for these contributions. Amended returns Compensation is your net earnings from self-employment, defined in chapter 1. Amended returns This definition takes into account both the following items. Amended returns The deduction for the deductible part of your self-employment tax. Amended returns The deduction for contributions on your behalf to the plan. Amended returns The deduction for your own contributions and your net earnings depend on each other. Amended returns For this reason, you determine the deduction for your own contributions indirectly by reducing the contribution rate called for in your plan. Amended returns To do this, use either the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed in chapter 5. Amended returns Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Amended returns Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Amended returns For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040); partnerships deduct them on Form 1065; and corporations deduct them on Form 1120, or Form 1120S. Amended returns Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Amended returns (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you get from the partnership. Amended returns ) Carryover of Excess Contributions If you contribute more to the plans than you can deduct for the year, you can carry over and deduct the difference in later years, combined with your contributions for those years. Amended returns Your combined deduction in a later year is limited to 25% of the participating employees' compensation for that year. Amended returns For purposes of this limit, a SEP is treated as a profit-sharing (defined contribution) plan. Amended returns However, this percentage limit must be reduced to figure your maximum deduction for contributions you make for yourself. Amended returns See Deduction Limit for Self-Employed Individuals, earlier. Amended returns The amount you carry over and deduct may be subject to the excise tax discussed next. Amended returns Table 4-1, earlier, illustrates the carryover of excess contributions to a profit-sharing plan. Amended returns Excise Tax for Nondeductible (Excess) Contributions If you contribute more than your deduction limit to a retirement plan, you have made nondeductible contributions and you may be liable for an excise tax. Amended returns In general, a 10% excise tax applies to nondeductible contributions made to qualified pension and profit-sharing plans and to SEPs. Amended returns Special rule for self-employed individuals. Amended returns   The 10% excise tax does not apply to any contribution made to meet the minimum funding requirements in a money purchase pension plan or a defined benefit plan. Amended returns Even if that contribution is more than your earned income from the trade or business for which the plan is set up, the difference is not subject to this excise tax. Amended returns See Minimum Funding Requirement , earlier. Amended returns Reporting the tax. Amended returns   You must report the tax on your nondeductible contributions on Form 5330. Amended returns Form 5330 includes a computation of the tax. Amended returns See the separate instructions for completing the form. Amended returns Elective Deferrals (401(k) Plans) Your qualified plan can include a cash or deferred arrangement under which participants can choose to have you contribute part of their before-tax compensation to the plan rather than receive the compensation in cash. Amended returns A plan with this type of arrangement is popularly known as a “401(k) plan. Amended returns ” (As a self-employed individual participating in the plan, you can contribute part of your before-tax net earnings from the business. Amended returns ) This contribution is called an “elective deferral” because participants choose (elect) to defer receipt of the money. Amended returns In general, a qualified plan can include a cash or deferred arrangement only if the qualified plan is one of the following plans. Amended returns A profit-sharing plan. Amended returns A money purchase pension plan in existence on June 27, 1974, that included a salary reduction arrangement on that date. Amended returns Partnership. Amended returns   A partnership can have a 401(k) plan. Amended returns Restriction on conditions of participation. Amended returns   The plan cannot require, as a condition of participation, that an employee complete more than 1 year of service. Amended returns Matching contributions. Amended returns   If your plan permits, you can make matching contributions for an employee who makes an elective deferral to your 401(k) plan. Amended returns For example, the plan might provide that you will contribute 50 cents for each dollar your participating employees choose to defer under your 401(k) plan. Amended returns Matching contributions are generally subject to the ACP test discussed earlier under Employee Contributions. Amended returns Nonelective contributions. Amended returns   You can also make contributions (other than matching contributions) for your participating employees without giving them the choice to take cash instead. Amended returns These are called nonelective contributions. Amended returns Employee compensation limit. Amended returns   No more than $255,000 of the employee's compensation can be taken into account when figuring contributions other than elective deferrals in 2013. Amended returns This limit is $260,000 in 2014. Amended returns SIMPLE 401(k) plan. Amended returns   If you had 100 or fewer employees who earned $5,000 or more in compensation during the preceding year, you may be able to set up a SIMPLE 401(k) plan. Amended returns A SIMPLE 401(k) plan is not subject to the nondiscrimination and top-heavy plan requirements discussed earlier under Qualification Rules. Amended returns For details about SIMPLE 401(k) plans, see SIMPLE 401(k) Plan in chapter 3. Amended returns Distributions. Amended returns   Certain rules apply to distributions from 401(k) plans. Amended returns See Distributions From 401(k) Plans , later. Amended returns Limit on Elective Deferrals There is a limit on the amount an employee can defer each year under these plans. Amended returns This limit applies without regard to community property laws. Amended returns Your plan must provide that your employees cannot defer more than the limit that applies for a particular year. Amended returns For 2013 and 2014, the basic limit on elective deferrals is $17,500. Amended returns This limit applies to all salary reduction contributions and elective deferrals. Amended returns If, in conjunction with other plans, the deferral limit is exceeded, the difference is included in the employee's gross income. Amended returns Catch-up contributions. Amended returns   A 401(k) plan can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Amended returns The catch-up contribution limit for 2013 and 2014 is $5,500. Amended returns Elective deferrals are not treated as catch-up contributions for 2013 until they exceed the $17,500 limit, the actual deferral percentage (ADP) test limit of section 401(k)(3), or the plan limit (if any). Amended returns However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Amended returns The catch-up contribution limit. Amended returns The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Amended returns Treatment of contributions. Amended returns   Your contributions to your own 401(k) plan are generally deductible by you for the year they are contributed to the plan. Amended returns Matching or nonelective contributions made to the plan are also deductible by you in the year of contribution. Amended returns Your employees' elective deferrals other than designated Roth contributions are tax free until distributed from the plan. Amended returns Elective deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Amended returns Forfeiture. Amended returns   Employees have a nonforfeitable right at all times to their accrued benefit attributable to elective deferrals. Amended returns Reporting on Form W-2. Amended returns   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Amended returns You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Amended returns You must also include them in box 12. Amended returns Mark the “Retirement plan” checkbox in box 13. Amended returns For more information, see the Form W-2 instructions. Amended returns Automatic Enrollment Your 401(k) plan can have an automatic enrollment feature. Amended returns Under this feature, you can automatically reduce an employee's pay by a fixed percentage and contribute that amount to the 401(k) plan on his or her behalf unless the employee affirmatively chooses not to have his or her pay reduced or chooses to have it reduced by a different percentage. Amended returns These contributions are elective deferrals. Amended returns An automatic enrollment feature will encourage employees' saving for retirement and will help your plan pass nondiscrimination testing (if applicable). Amended returns For more information, see Publication 4674, Automatic Enrollment 401(k) Plans for Small Businesses. Amended returns Eligible automatic contribution arrangement. Amended returns   Under an eligible automatic contribution arrangement (EACA), a participant is treated as having elected to have the employer make contributions in an amount equal to a uniform percentage of compensation. Amended returns This automatic election will remain in place until the participant specifically elects not to have such deferral percentage made (or elects a different percentage). Amended returns There is no required deferral percentage. Amended returns Withdrawals. Amended returns   Under an EACA, you may allow participants to withdraw their automatic contributions to the plan if certain conditions are met. Amended returns The participant must elect the withdrawal no later than 90 days after the date of the first elective contributions under the EACA. Amended returns The participant must withdraw the entire amount of EACA default contributions, including any earnings thereon. Amended returns   If the plan allows withdrawals under the EACA, the amount of the withdrawal other than the amount of any designated Roth contributions must be included in the employee's gross income for the tax year in which the distribution is made. Amended returns The additional 10% tax on early distributions will not apply to the distribution. Amended returns Notice requirement. Amended returns   Under an EACA, employees must be given written notice of the terms of the EACA within a reasonable period of time before each plan year. Amended returns The notice must be written in a manner calculated to be understood by the average employee and be sufficiently accurate and comprehensive in order to apprise the employee of his or her rights and obligations under the EACA. Amended returns The notice must include an explanation of the employee's right to elect not to have elective contributions made on his or her behalf, or to elect a different percentage, and the employee must be given a reasonable period of time after receipt of the notice before the first elective contribution is made. Amended returns The notice also must explain how contributions will be invested in the absence of an investment election by the employee. Amended returns Qualified automatic contribution arrangement. Amended returns    A qualified automatic contribution arrangement (QACA) is a type of safe harbor plan. Amended returns It contains an automatic enrollment feature, and mandatory employer contributions are required. Amended returns If your plan includes a QACA, it will not be subject to the ADP test (discussed later) nor the top-heavy requirements (discussed earlier). Amended returns Additionally, your plan will not be subject to the actual contribution percentage (ACP) test if certain additional requirements are met. Amended returns Under a QACA, each employee who is eligible to participate in the plan will be treated as having elected to make elective deferral contributions equal to a certain default percentage of compensation. Amended returns In order to not have default elective deferrals made, an employee must make an affirmative election specifying a deferral percentage (including zero, if desired). Amended returns If an employee does not make an affirmative election, the default deferral percentage must meet the following conditions. Amended returns It must be applied uniformly. Amended returns It must not exceed 10%. Amended returns It must be at least 3% in the first plan year it applies to an employee and through the end of the following year. Amended returns It must increase to at least 4% in the following plan year. Amended returns It must increase to at least 5% in the following plan year. Amended returns It must increase to at least 6% in subsequent plan years. Amended returns Matching or nonelective contributions. Amended returns   Under the terms of the QACA, you must make either matching or nonelective contributions according to the following terms. Amended returns Matching contributions. Amended returns You must make matching contributions on behalf of each non-highly compensated employee in the following amounts. Amended returns An amount equal to 100% of elective deferrals, up to 1% of compensation. Amended returns An amount equal to 50% of elective deferrals, from 1% up to 6% of compensation. Amended returns Other formulas may be used as long as they are at least as favorable to non-highly compensated employees. Amended returns The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Amended returns Nonelective contributions. Amended returns You must make nonelective contributions on behalf of every non-highly compensated employee eligible to participate in the plan, regardless of whether they elected to participate, in an amount equal to at least 3% of their compensation. Amended returns Vesting requirements. Amended returns   All accrued benefits attributed to matching or nonelective contributions under the QACA must be 100% vested for all employees who complete 2 years of service. Amended returns These contributions are subject to special withdrawal restrictions, discussed later. Amended returns Notice requirements. Amended returns   Each employee eligible to participate in the QACA must receive written notice of their rights and obligations under the QACA, within a reasonable period before each plan year. Amended returns The notice must be written in a manner calculated to be understood by the average employee, and it must be accurate and comprehensive. Amended returns The notice must explain their right to elect not to have elective contributions made on their behalf, or to have contributions made at a different percentage than the default percentage. Amended returns Additionally, the notice must explain how contributions will be invested in the absence of any investment election by the employee. Amended returns The employee must have a reasonable period of time after receiving the notice to make such contribution and investment elections prior to the first contributions under the QACA. Amended returns Treatment of Excess Deferrals If the total of an employee's deferrals is more than the limit for 2013, the employee can have the difference (called an excess deferral) paid out of any of the plans that permit these distributions. Amended returns He or she must notify the plan by April 15, 2014 (or an earlier date specified in the plan), of the amount to be paid from each plan. Amended returns The plan must then pay the employee that amount, plus earnings on the amount through the end of 2013, by April 15, 2014. Amended returns Excess withdrawn by April 15. Amended returns   If the employee takes out the excess deferral by April 15, 2014, it is not reported again by including it in the employee's gross income for 2014. Amended returns However, any income earned in 2013 on the excess deferral taken out is taxable in the tax year in which it is taken out. Amended returns The distribution is not subject to the additional 10% tax on early distributions. Amended returns   If the employee takes out part of the excess deferral and the income on it, the distribution is treated as made proportionately from the excess deferral and the income. Amended returns   Even if the employee takes out the excess deferral by April 15, the amount will be considered for purposes of nondiscrimination testing requirements of the plan, unless the distributed amount is for a non-highly compensated employee who participates in only one employer's 401(k) plan or plans. Amended returns Excess not withdrawn by April 15. Amended returns   If the employee does not take out the excess deferral by April 15, 2014, the excess, though taxable in 2013, is not included in the employee's cost basis in figuring the taxable amount of any eventual distributions under the plan. Amended returns In effect, an excess deferral left in the plan is taxed twice, once when contributed and again when distributed. Amended returns Also, if the employee's excess deferral is allowed to stay in the plan and the employee participates in no other employer's plan, the plan can be disqualified. Amended returns Reporting corrective distributions on Form 1099-R. Amended returns   Report corrective distributions of excess deferrals (including any earnings) on Form 1099-R. Amended returns For specific information about reporting corrective distributions, see the Instructions for Forms 1099-R and 5498. Amended returns Tax on excess contributions of highly compensated employees. Amended returns   The law provides tests to detect discrimination in a plan. Amended returns If tests, such as the actual deferral percentage test (ADP test) (see section 401(k)(3)) and the actual contribution percentage test (ACP test) (see section 401(m)(2)), show that contributions for highly compensated employees are more than the test limits for these contributions, the employer may have to pay a 10% excise tax. Amended returns Report the tax on Form 5330. Amended returns The ADP test does not apply to a safe harbor 401(k) plan (discussed next) nor to a QACA. Amended returns Also, the ACP test does not apply to these plans if certain additional requirements are met. Amended returns   The tax for the year is 10% of the excess contributions for the plan year ending in your tax year. Amended returns Excess contributions are elective deferrals, employee contributions, or employer matching or nonelective contributions that are more than the amount permitted under the ADP test or the ACP test. Amended returns   See Regulations sections 1. Amended returns 401(k)-2 and 1. Amended returns 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Amended returns    If the plan fails the ADP or ACP testing, and the failure is not corrected by the end of the next plan year, the plan can be disqualified. Amended returns Safe harbor 401(k) plan. Amended returns If you meet the requirements for a safe harbor 401(k) plan, you do not have to satisfy the ADP test, nor the ACP test, if certain additional requirements are met. Amended returns For your plan to be a safe harbor plan, you must meet the following conditions. Amended returns Matching or nonelective contributions. Amended returns You must make matching or nonelective contributions according to one of the following formulas. Amended returns Matching contributions. Amended returns You must make matching contributions according to the following rules. Amended returns You must contribute an amount equal to 100% of each non-highly compensated employee's elective deferrals, up to 3% of compensation. Amended returns You must contribute an amount equal to 50% of each non-highly compensated employee's elective deferrals, from 3% up to 5% of compensation. Amended returns The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Amended returns Nonelective contributions. Amended returns You must make nonelective contributions, without regard to whether the employee made elective deferrals, on behalf of all non-highly compensated employees eligible to participate in the plan, equal to at least 3% of the employee's compensation. Amended returns These mandatory matching and nonelective contributions must be immediately 100% vested and are subject to special withdrawal restrictions. Amended returns Notice requirement. Amended returns You must give eligible employees written notice of their rights and obligations with regard to contributions under the plan, within a reasonable period before the plan year. Amended returns The other requirements for a 401(k) plan, including withdrawal and vesting rules, must also be met for your plan to qualify as a safe harbor 401(k) plan. Amended returns Qualified Roth Contribution Program Under this program an eligible employee can designate all or a portion of his or her elective deferrals as after-tax Roth contributions. Amended returns Elective deferrals designated as Roth contributions must be maintained in a separate Roth account. Amended returns However, unlike other elective deferrals, designated Roth contributions are not excluded from employees' gross income, but qualified distributions from a Roth account are excluded from employees' gross income. Amended returns Elective Deferrals Under a qualified Roth contribution program, the amount of elective deferrals that an employee may designate as a Roth contribution is limited to the maximum amount of elective deferrals excludable from gross income for the year (for 2013 and 2014, $17,500 if under age 50 and $23,000 if age 50 or over) less the total amount of the employee's elective deferrals not designated as Roth contributions. Amended returns Designated Roth deferrals are treated the same as pre-tax elective deferrals for most purposes, including: The annual individual elective deferral limit (total of all designated Roth contributions and traditional, pre-tax elective deferrals) of $17,500 for 2013 and 2014, with an additional $5,500 if age 50 or over for 2013 and 2014, Determining the maximum employee and employer annual contributions of the lesser of 100% of compensation or $51,000 for 2013 ($52,000 for 2014), Nondiscrimination testing, Required distributions, and Elective deferrals not taken into account for purposes of deduction limits. Amended returns Qualified Distributions A qualified distribution is a distribution that is made after the employee's nonexclusion period and: On or after the employee attains age   59½, On account of the employee's being disabled, or On or after the employee's death. Amended returns An employee's nonexclusion period for a plan is the 5-tax-year period beginning with the earlier of the following tax years. Amended returns The first tax year in which the employee made a contribution to his or her Roth account in the plan, or If a rollover contribution was made to the employee's designated Roth account from a designated Roth account previously established for the employee under another plan, then the first tax year the employee made a designated Roth contribution to the previously established account. Amended returns Rollover. Amended returns   Beginning September 28, 2010, a rollover from another account can be made to a designated Roth account in the same plan. Amended returns For additional information on these in-plan Roth rollovers, see Notice 2010-84, 2010-51 I. Amended returns R. Amended returns B. Amended returns 872, available at www. Amended returns irs. Amended returns gov/irb/2010-51_IRB/ar11. Amended returns html, and Notice 2013-74. Amended returns A distribution from a designated Roth account can only be rolled over to another designated Roth account or a Roth IRA. Amended returns Rollover amounts do not apply toward the annual deferral limit. Amended returns Reporting Requirements You must report a contribution to a Roth account on Form W-2 and a distribution from a Roth account on Form 1099-R. Amended returns See the Form W-2 and 1099-R instructions for detailed information. Amended returns Distributions Amounts paid to plan participants from a qualified plan are called distributions. Amended returns Distributions may be nonperiodic, such as lump-sum distributions, or periodic, such as annuity payments. Amended returns Also, certain loans may be treated as distributions. Amended returns See Loans Treated as Distributions in Publication 575. Amended returns Required Distributions A qualified plan must provide that each participant will either: Receive his or her entire interest (benefits) in the plan by the required beginning date (defined later), or Begin receiving regular periodic distributions by the required beginning date in annual amounts calculated to distribute the participant's entire interest (benefits) over his or her life expectancy or over the joint life expectancy of the participant and the designated beneficiary (or over a shorter period). Amended returns These distribution rules apply individually to each qualified plan. Amended returns You cannot satisfy the requirement for one plan by taking a distribution from another. Amended returns The plan must provide that these rules override any inconsistent distribution options previously offered. Amended returns Minimum distribution. Amended returns   If the account balance of a qualified plan participant is to be distributed (other than as an annuity), the plan administrator must figure the minimum amount required to be distributed each distribution calendar year. Amended returns This minimum is figured by dividing the account balance by the applicable life expectancy. Amended returns The plan administrator can use the life expectancy tables in Appendix C of Publication 590 for this purpose. Amended returns For more information on figuring the minimum distribution, see Tax on Excess Accumulation in Publication 575. Amended returns Required beginning date. Amended returns   Generally, each participant must receive his or her entire benefits in the plan or begin to receive periodic distributions of benefits from the plan by the required beginning date. Amended returns   A participant must begin to receive distributions from his or her qualified retirement plan by April 1 of the first year after the later of the following years. Amended returns Calendar year in which he or she reaches age 70½. Amended returns Calendar year in which he or she retires from employment with the employer maintaining the plan. Amended returns However, the plan may require the participant to begin receiving distributions by April 1 of the year after the participant reaches age 70½ even if the participant has not retired. Amended returns   If the participant is a 5% owner of the employer maintaining the plan, the participant must begin receiving distributions by April 1 of the first year after the calendar year in which the participant reached age 70½. Amended returns For more information, see Tax on Excess Accumulation in Publication 575. Amended returns Distributions after the starting year. Amended returns   The distribution required to be made by April 1 is treated as a distribution for the starting year. Amended returns (The starting year is the year in which the participant meets (1) or (2) above, whichever applies. Amended returns ) After the starting year, the participant must receive the required distribution for each year by December 31 of that year. Amended returns If no distribution is made in the starting year, required distributions for 2 years must be made in the next year (one by April 1 and one by December 31). Amended returns Distributions after participant's death. Amended returns   See Publication 575 for the special rules covering distributions made after the death of a participant. Amended returns Distributions From 401(k) Plans Generally, distributions cannot be made until one of the following occurs. Amended returns The employee retires, dies, becomes disabled, or otherwise severs employment. Amended returns The plan ends and no other defined contribution plan is established or continued. Amended returns In the case of a 401(k) plan that is part of a profit-sharing plan, the employee reaches age 59½ or suffers financial hardship. Amended returns For the rules on hardship distributions, including the limits on them, see Regulations section 1. Amended returns 401(k)-1(d). Amended returns The employee becomes eligible for a qualified reservist distribution (defined next). Amended returns Certain distributions listed above may be subject to the tax on early distributions discussed later. Amended returns Qualified reservist distributions. Amended returns   A qualified reservist distribution is a distribution from an IRA or an elective deferral account made after September 11, 2001, to a military reservist or a member of the National Guard who has been called to active duty for at least 180 days or for an indefinite period. Amended returns All or part of a qualified reservist distribution can be recontributed to an IRA. Amended returns The additional 10% tax on early distributions does not apply to a qualified reservist distribution. Amended returns Tax Treatment of Distributions Distributions from a qualified plan minus a prorated part of any cost basis are subject to income tax in the year they are distributed. Amended returns Since most recipients have no cost basis, a distribution is generally fully taxable. Amended returns An exception is a distribution that is properly rolled over as discussed under Rollover, next. Amended returns The tax treatment of distributions depends on whether they are made periodically over several years or life (periodic distributions) or are nonperiodic distributions. Amended returns See Taxation of Periodic Payments and Taxation of Nonperiodic Payments in Publication 575 for a detailed description of how distributions are taxed, including the 10-year tax option or capital gain treatment of a lump-sum distribution. Amended returns Note. Amended returns A recipient of a distribution from a designated Roth account will have a cost basis since designated Roth contributions are made on an after-tax basis. Amended returns Also, a distribution from a designated Roth account is entirely tax-free if certain conditions are met. Amended returns See Qualified distributions under Qualified Roth Contribution Program, earlier. Amended returns Rollover. Amended returns   The recipient of an eligible rollover distribution from a qualified plan can defer the tax on it by rolling it over into a traditional IRA or another eligible retirement plan. Amended returns However, it may be subject to withholding as discussed under Withholding requirement, later. Amended returns A rollover can also be made to a Roth IRA, in which case, any previously untaxed amounts are includible in gross income unless the rollover is from a designated Roth account. Amended returns Eligible rollover distribution. Amended returns   This is a distribution of all or any part of an employee's balance in a qualified retirement plan that is not any of the following. Amended returns A required minimum distribution. Amended returns See Required Distributions , earlier. Amended returns Any of a series of substantially equal payments made at least once a year over any of the following periods. Amended returns The employee's life or life expectancy. Amended returns The joint lives or life expectancies of the employee and beneficiary. Amended returns A period of 10 years or longer. Amended returns A hardship distribution. Amended returns The portion of a distribution that represents the return of an employee's nondeductible contributions to the plan. Amended returns See Employee Contributions , earlier, and Rollover of nontaxable amounts, next. Amended returns Loans treated as distributions. Amended returns Dividends on employer securities. Amended returns The cost of any life insurance coverage provided under a qualified retirement plan. Amended returns Similar items designated by the IRS in published guidance. Amended returns See, for example, the Instructions for Forms 1099-R and 5498. Amended returns Rollover of nontaxable amounts. Amended returns   You may be able to roll over the nontaxable part of a distribution to another qualified retirement plan or a section 403(b) plan, or to an IRA. Amended returns If the rollover is to a qualified retirement plan or a section 403(b) plan that separately accounts for the taxable and nontaxable parts of the rollover, the transfer must be made through a direct (trustee-to-trustee) rollover. Amended returns If the rollover is to an IRA, the transfer can be made by any rollover method. Amended returns Note. Amended returns A distribution from a designated Roth account can be rolled over to another designated Roth account or to a Roth IRA. Amended returns If the rollover is to a Roth IRA, it can be rolled over by any rollover method, but if the rollover is to another designated Roth account, it must be rolled over directly (trustee-to-trustee). Amended returns More information. Amended returns   For more information about rollovers, see Rollovers in Pubs. Amended returns 575 and 590. Amended returns Withholding requirement. Amended returns   If, during a year, a qualified plan pays to a participant one or more eligible rollover distributions (defined earlier) that are reasonably expected to total $200 or more, the payor must withhold 20% of the taxable portion of each distribution for federal income tax. Amended returns Exceptions. Amended returns   If, instead of having the distribution paid to him or her, the participant chooses to have the plan pay it directly to an IRA or another eligible retirement plan (a direct rollover), no withholding is required. Amended returns   If the distribution is not an eligible rollover distribution, defined earlier, the 20% withholding requirement does not apply. Amended returns Other withholding rules apply to distributions that are not eligible rollover distributions, such as long-term periodic distributions and required distributions (periodic or nonperiodic). Amended returns However, the participant can choose not to have tax withheld from these distributions. Amended returns If the participant does not make this choice, the following withholding rules apply. Amended returns For periodic distributions, withholding is based on their treatment as wages. Amended returns For nonperiodic distributions, 10% of the taxable part is withheld. Amended returns Estimated tax payments. Amended returns   If no income tax is withheld or not enough tax is withheld, the recipient of a distribution may have to make estimated tax payments. Amended returns For more information, see Withholding Tax and Estimated Tax in Publication 575. Amended returns Section 402(f) Notice. Amended returns   If a distribution is an eligible rollover distribution, as defined earlier, you must provide a written notice to the recipient that explains the following rules regarding such distributions. Amended returns That the distribution may be directly transferred to an eligible retirement plan and information about which distributions are eligible for this direct transfer. Amended returns That tax will be withheld from the distribution if it is not directly transferred to an eligible retirement plan. Amended returns That the distribution will not be subject to tax if transferred to an eligible retirement plan within 60 days after the date the recipient receives the distribution. Amended returns Certain other rules that may be applicable. Amended returns   Notice 2009-68, 2009-39 I. Amended returns R. Amended returns B. Amended returns 423, available at www. Amended returns irs. Amended returns gov/irb/2009-39_IRB/ar14. Amended returns html, contains two updated safe harbor section 402(f) notices that plan administrators may provide recipients of eligible rollover distributions. Amended returns If the plan allows in-plan Roth rollovers, the 402(f) notice must be amended to reflect this. Amended returns Notice 2010-84 contains guidance on how to modify a 402(f) notice for in-plan Roth rollovers. Amended returns Timing of notice. Amended returns   The notice generally must be provided no less than 30 days and no more than 180 days before the date of a distribution. Amended returns Method of notice. Amended returns   The written notice must be provided individually to each distributee of an eligible rollover distribution. Amended returns Posting of the notice is not sufficient. Amended returns However, the written requirement may be satisfied through the use of electronic media if certain additional conditions are met. Amended returns See Regulations section 1. Amended returns 401(a)-21. Amended returns Tax on failure to give notice. Amended returns   Failure to give a 402(f) notice will result in a tax of $100 for each failure, with a total not exceeding $50,000 per calendar year. Amended returns The tax will not be imposed if it is shown that such failure is due to reasonable cause and not to willful neglect. Amended returns Tax on Early Distributions If a distribution is made to an employee under the plan before he or she reaches age 59½, the employee may have to pay a 10% additional tax on the distribution. Amended returns This tax applies to the amount received that the employee must include in income. Amended returns Exceptions. Amended returns   The 10% tax will not apply if distributions before age 59½ are made in any of the following circumstances. Amended returns Made to a beneficiary (or to the estate of the employee) on or after the death of the employee. Amended returns Made due to the employee having a qualifying disability. Amended returns Made as part of a series of substantially equal periodic payments beginning after separation from service and made at least annually for the life or life expectancy of the employee or the joint lives or life expectancies of the employee and his or her designated beneficiary. Amended returns (The payments under this exception, except in the case of death or disability, must continue for at least 5 years or until the employee reaches age 59½, whichever is the longer period. Amended returns ) Made to an employee after separation from service if the separation occurred during o