File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Amending 2012 Federal Tax Return

Amendment Tax ReturnTax Act 2012 FreeE File 2012 Taxes For FreeFree Irs Tax Filing OnlineFile State Taxes OnlyState Tax Return Free E-file2010 TaxEfile 2007 Tax Returns For Free1040ez 2014 FormHrblockonlineFree File 2012 Taxes OnlineAmend Federal Tax Return Free1040ez Form 2012Tax Software For 1040nrCan I Amend My Tax ReturnIrs 1040 Ez Online FilingCan You Efile A 1040xFree H And R Block OnlineBest Tax Preparation SoftwareH&r Block Free ReturnFree Military Taxes1040ezEfile FreeHow To File A Amended Tax ReturnWww.myfreetax.comTax Forms 1040 Ez1040 Ez Tax1040 Ez File OnlineHow Can I File State Taxes For FreeWwwh&rblock ComAmended TaxesLiberty TaxAmend 2013 Tax Return2012 Tax FileFederal Tax Return 2011Form 1040ezFree State Tax Filing 2012Ez Form 2010Free Income Tax ReturnState Income Tax Rate Comparisons

Amending 2012 Federal Tax Return

Amending 2012 federal tax return 36. Amending 2012 federal tax return   Earned Income Credit (EIC) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Do You Qualify for the Credit?If Improper Claim Made in Prior Year Part A. Amending 2012 federal tax return Rules for EveryoneRule 1. Amending 2012 federal tax return Your AGI Must Be Less Than: Rule 2. Amending 2012 federal tax return You Must Have a Valid Social Security Number (SSN) Rule 3. Amending 2012 federal tax return Your Filing Status Cannot Be Married Filing Separately Rule 4. Amending 2012 federal tax return You Must Be a U. Amending 2012 federal tax return S. Amending 2012 federal tax return Citizen or Resident Alien All Year Rule 5. Amending 2012 federal tax return You Cannot File Form 2555 or Form 2555-EZ Rule 6. Amending 2012 federal tax return Your Investment Income Must Be $3,300 or Less Rule 7. Amending 2012 federal tax return You Must Have Earned Income Part B. Amending 2012 federal tax return Rules If You Have a Qualifying ChildRule 8. Amending 2012 federal tax return Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9. Amending 2012 federal tax return Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Rule 10. Amending 2012 federal tax return You Cannot Be a Qualifying Child of Another Taxpayer Part C. Amending 2012 federal tax return Rules If You Do Not Have a Qualifying ChildRule 11. Amending 2012 federal tax return You Must Be at Least Age 25 but Under Age 65 Rule 12. Amending 2012 federal tax return You Cannot Be the Dependent of Another Person Rule 13. Amending 2012 federal tax return You Cannot Be a Qualifying Child of Another Taxpayer Rule 14. Amending 2012 federal tax return You Must Have Lived in the United States More Than Half of the Year Part D. Amending 2012 federal tax return Figuring and Claiming the EICRule 15. Amending 2012 federal tax return Your Earned Income Must Be Less Than: IRS Will Figure the EIC for You How To Figure the EIC Yourself ExamplesExample 1. Amending 2012 federal tax return John and Janet Smith (Form 1040A) Example 2. Amending 2012 federal tax return Kelly Green (Form 1040EZ) What's New Earned income amount is more. Amending 2012 federal tax return  The maximum amount of income you can earn and still get the credit has increased. Amending 2012 federal tax return You may be able to take the credit if: You have three or more qualifying children and you earned less than $46,227 ($51,567 if married filing jointly), You have two qualifying children and you earned less than $43,038 ($48,378 if married filing jointly), You have one qualifying child and you earned less than $37,870 ($43,210 if married filing jointly), or You do not have a qualifying child and you earned less than $14,340 ($19,680 if married filing jointly). Amending 2012 federal tax return Your adjusted gross income also must be less than the amount in the above list that applies to you. Amending 2012 federal tax return For details, see Rules 1 and 15. Amending 2012 federal tax return Investment income amount is more. Amending 2012 federal tax return  The maximum amount of investment income you can have and still get the credit has increased to $3,300. Amending 2012 federal tax return See Rule 6. Amending 2012 federal tax return Reminders Increased EIC on certain joint returns. Amending 2012 federal tax return  A married person filing a joint return may get more EIC than someone with the same income but a different filing status. Amending 2012 federal tax return As a result, the EIC table has different columns for married persons filing jointly than for everyone else. Amending 2012 federal tax return When you look up your EIC in the EIC Table, be sure to use the correct column for your filing status and the number of children you have. Amending 2012 federal tax return Online help. Amending 2012 federal tax return  You can use the EITC Assistant at www. Amending 2012 federal tax return irs. Amending 2012 federal tax return gov/eitc to find out if you are eligible for the credit. Amending 2012 federal tax return The EITC Assistant is available in English and Spanish. Amending 2012 federal tax return EIC questioned by IRS. Amending 2012 federal tax return  The IRS may ask you to provide documents to prove you are entitled to claim the EIC. Amending 2012 federal tax return We will tell you what documents to send us. Amending 2012 federal tax return These may include: birth certificates, school records, medical records, etc. Amending 2012 federal tax return The process of establishing your eligibility will delay your refund. Amending 2012 federal tax return Introduction The earned income credit (EIC) is a tax credit for certain people who work and have less than $51,567 of earned income. Amending 2012 federal tax return A tax credit usually means more money in your pocket. Amending 2012 federal tax return It reduces the amount of tax you owe. Amending 2012 federal tax return The EIC may also give you a refund. Amending 2012 federal tax return How do you get the earned income credit?   To claim the EIC, you must: Qualify by meeting certain rules, and File a tax return, even if you: Do not owe any tax, Did not earn enough money to file a return, or Did not have income taxes withheld from your pay. Amending 2012 federal tax return When you complete your return, you can figure your EIC by using a worksheet in the instructions for Form 1040, Form 1040A, or Form 1040EZ. Amending 2012 federal tax return Or, if you prefer, you can let the IRS figure the credit for you. Amending 2012 federal tax return How will this chapter help you?   This chapter will explain the following. Amending 2012 federal tax return The rules you must meet to qualify for the EIC. Amending 2012 federal tax return How to figure the EIC. Amending 2012 federal tax return Useful Items - You may want to see: Publication 596 Earned Income Credit (EIC) Form (and Instructions) Schedule EIC Earned Income Credit (Qualifying Child Information) 8862 Information To Claim Earned Income Credit After Disallowance Do You Qualify for the Credit? To qualify to claim the EIC, you must first meet all of the rules explained in Part A, Rules for Everyone . Amending 2012 federal tax return Then you must meet the rules in Part B, Rules If You Have a Qualifying Child , or Part C, Rules If You Do Not Have a Qualifying Child . Amending 2012 federal tax return There is one final rule you must meet in Part D, Figuring and Claiming the EIC . Amending 2012 federal tax return You qualify for the credit if you meet all the rules in each part that applies to you. Amending 2012 federal tax return If you have a qualifying child, the rules in Parts A, B, and D apply to you. Amending 2012 federal tax return If you do not have a qualifying child, the rules in Parts A, C, and D apply to you. Amending 2012 federal tax return Table 36-1, Earned Income Credit in a Nutshell. Amending 2012 federal tax return   Use Table 36–1 as a guide to Parts A, B, C, and D. Amending 2012 federal tax return The table is a summary of all the rules in each part. Amending 2012 federal tax return Do you have a qualifying child?   You have a qualifying child only if you have a child who meets the four tests described in Rule 8 and illustrated in Figure 36–1. Amending 2012 federal tax return If Improper Claim Made in Prior Year If your EIC for any year after 1996 was denied or reduced for any reason other than a math or clerical error, you must attach a completed Form 8862 to your next tax return to claim the EIC. Amending 2012 federal tax return You must also qualify to claim the EIC by meeting all the rules described in this chapter. Amending 2012 federal tax return However, if your EIC was denied or reduced as a result of a math or clerical error, do not attach Form 8862 to your next tax return. Amending 2012 federal tax return For example, if your arithmetic is incorrect, the IRS can correct it. Amending 2012 federal tax return If you do not provide a correct social security number, the IRS can deny the EIC. Amending 2012 federal tax return These kinds of errors are called math or clerical errors. Amending 2012 federal tax return If your EIC for any year after 1996 was denied and it was determined that your error was due to reckless or intentional disregard of the EIC rules, then you cannot claim the EIC for the next 2 years. Amending 2012 federal tax return If your error was due to fraud, then you cannot claim the EIC for the next 10 years. Amending 2012 federal tax return More information. Amending 2012 federal tax return   See chapter 5 in Publication 596 for more detailed information about the disallowance period and Form 8862. Amending 2012 federal tax return Part A. Amending 2012 federal tax return Rules for Everyone This part of the chapter discusses Rules 1 through 7. Amending 2012 federal tax return You must meet all seven rules to qualify for the earned income credit. Amending 2012 federal tax return If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the chapter. Amending 2012 federal tax return If you meet all seven rules in this part, then read either Part B or Part C (whichever applies) for more rules you must meet. Amending 2012 federal tax return Rule 1. Amending 2012 federal tax return Your AGI Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Amending 2012 federal tax return Adjusted gross income (AGI). Amending 2012 federal tax return   AGI is the amount on line 38 (Form 1040), line 22 (Form 1040A), or line 4 (Form 1040EZ). Amending 2012 federal tax return If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. Amending 2012 federal tax return Example. Amending 2012 federal tax return Your AGI is $38,550, you are single, and you have one qualifying child. Amending 2012 federal tax return You cannot claim the EIC because your AGI is not less than $37,870. Amending 2012 federal tax return However, if your filing status was married filing jointly, you might be able to claim the EIC because your AGI is less than $43,210. Amending 2012 federal tax return Community property. Amending 2012 federal tax return   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your AGI includes that portion of both your and your spouse's wages that you are required to include in gross income. Amending 2012 federal tax return This is different from the community property rules that apply under Rule 7 . Amending 2012 federal tax return Rule 2. Amending 2012 federal tax return You Must Have a Valid Social Security Number (SSN) To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). Amending 2012 federal tax return Any qualifying child listed on Schedule EIC also must have a valid SSN. Amending 2012 federal tax return (See Rule 8 if you have a qualifying child. Amending 2012 federal tax return ) If your social security card (or your spouse's, if filing a joint return) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. Amending 2012 federal tax return An example of a federally funded benefit is Medicaid. Amending 2012 federal tax return If you have a card with the legend “Not valid for employment” and your immigration status has changed so that you are now a U. Amending 2012 federal tax return S. Amending 2012 federal tax return citizen or permanent resident, ask the SSA for a new social security card without the legend. Amending 2012 federal tax return U. Amending 2012 federal tax return S. Amending 2012 federal tax return citizen. Amending 2012 federal tax return   If you were a U. Amending 2012 federal tax return S. Amending 2012 federal tax return citizen when you received your SSN, you have a valid SSN. Amending 2012 federal tax return Valid for work only with INS or DHS authorization. Amending 2012 federal tax return   If your social security card reads “Valid for work only with INS authorization” or “Valid for work only with DHS authorization,” you have a valid SSN, but only if that authorization is still valid. Amending 2012 federal tax return SSN missing or incorrect. Amending 2012 federal tax return   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. Amending 2012 federal tax return Other taxpayer identification number. Amending 2012 federal tax return   You cannot get the EIC if, instead of an SSN, you (or your spouse, if filing a joint return) have an individual taxpayer identification number (ITIN). Amending 2012 federal tax return ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. Amending 2012 federal tax return No SSN. Amending 2012 federal tax return   If you do not have a valid SSN, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Amending 2012 federal tax return You cannot claim the EIC. Amending 2012 federal tax return Getting an SSN. Amending 2012 federal tax return   If you (or your spouse, if filing a joint return) do not have an SSN, you can apply for one by filing Form SS-5, Application for a Social Security Card, with the SSA. Amending 2012 federal tax return You can get Form SS-5 online at www. Amending 2012 federal tax return socialsecurity. Amending 2012 federal tax return gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. Amending 2012 federal tax return Filing deadline approaching and still no SSN. Amending 2012 federal tax return   If the filing deadline is approaching and you still do not have an SSN, you have two choices. Amending 2012 federal tax return Request an automatic 6-month extension of time to file your return. Amending 2012 federal tax return You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Amending 2012 federal tax return S. Amending 2012 federal tax return Individual Income Tax Return. Amending 2012 federal tax return For more information, see chapter 1 . Amending 2012 federal tax return File the return on time without claiming the EIC. Amending 2012 federal tax return After receiving the SSN, file an amended return (Form 1040X, Amended U. Amending 2012 federal tax return S. Amending 2012 federal tax return Individual Income Tax Return) claiming the EIC. Amending 2012 federal tax return Attach a filled-in Schedule EIC if you have a qualifying child. Amending 2012 federal tax return Table 36-1. Amending 2012 federal tax return Earned Income Credit in a Nutshell First, you must meet all the rules in this column. Amending 2012 federal tax return Second, you must meet all the rules in one of these columns, whichever applies. Amending 2012 federal tax return Third, you must meet the rule in this column. Amending 2012 federal tax return Part A. Amending 2012 federal tax return  Rules for Everyone Part B. Amending 2012 federal tax return  Rules If You Have a Qualifying Child Part C. Amending 2012 federal tax return  Rules If You Do Not Have a Qualifying Child Part D. Amending 2012 federal tax return  Figuring and Claiming the EIC 1. Amending 2012 federal tax return Your adjusted gross income (AGI) must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Amending 2012 federal tax return 2. Amending 2012 federal tax return You must have a valid social security number. Amending 2012 federal tax return  3. Amending 2012 federal tax return Your filing status cannot be “Married filing separately. Amending 2012 federal tax return ” 4. Amending 2012 federal tax return You must be a U. Amending 2012 federal tax return S. Amending 2012 federal tax return citizen or resident alien all year. Amending 2012 federal tax return  5. Amending 2012 federal tax return You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income). Amending 2012 federal tax return  6. Amending 2012 federal tax return Your investment income must be $3,300 or less. Amending 2012 federal tax return  7. Amending 2012 federal tax return You must have earned income. Amending 2012 federal tax return 8. Amending 2012 federal tax return Your child must meet the relationship, age, residency, and joint return tests. Amending 2012 federal tax return  9. Amending 2012 federal tax return Your qualifying child cannot be used by more than one person to claim the EIC. Amending 2012 federal tax return  10. Amending 2012 federal tax return You cannot be a qualifying child of another person. Amending 2012 federal tax return 11. Amending 2012 federal tax return You must be at least age 25 but under age 65. Amending 2012 federal tax return  12. Amending 2012 federal tax return You cannot be the dependent of another person. Amending 2012 federal tax return  13. Amending 2012 federal tax return You cannot be a qualifying child of another person. Amending 2012 federal tax return  14. Amending 2012 federal tax return You must have lived in the United States more than half of the year. Amending 2012 federal tax return 15. Amending 2012 federal tax return Your earned income must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Amending 2012 federal tax return Rule 3. Amending 2012 federal tax return Your Filing Status Cannot Be Married Filing Separately If you are married, you usually must file a joint return to claim the EIC. Amending 2012 federal tax return Your filing status cannot be “Married filing separately. Amending 2012 federal tax return ” Spouse did not live with you. Amending 2012 federal tax return   If you are married and your spouse did not live in your home at any time during the last 6 months of the year, you may be able to file as head of household, instead of married filing separately. Amending 2012 federal tax return In that case, you may be able to claim the EIC. Amending 2012 federal tax return For detailed information about filing as head of household, see chapter 2 . Amending 2012 federal tax return Rule 4. Amending 2012 federal tax return You Must Be a U. Amending 2012 federal tax return S. Amending 2012 federal tax return Citizen or Resident Alien All Year If you (or your spouse, if married) were a nonresident alien for any part of the year, you cannot claim the earned income credit unless your filing status is married filing jointly. Amending 2012 federal tax return You can use that filing status only if one spouse is a U. Amending 2012 federal tax return S. Amending 2012 federal tax return citizen or resident alien and you choose to treat the nonresident spouse as a U. Amending 2012 federal tax return S. Amending 2012 federal tax return resident. Amending 2012 federal tax return If you make this choice, you and your spouse are taxed on your worldwide income. Amending 2012 federal tax return If you (or your spouse, if married) were a nonresident alien for any part of the year and your filing status is not married filing jointly, enter “No” on the dotted line next to line 64a (Form 1040) or in the space to the left of line 38a (Form 1040A). Amending 2012 federal tax return If you need more information on making this choice, get Publication 519, U. Amending 2012 federal tax return S. Amending 2012 federal tax return Tax Guide for Aliens. Amending 2012 federal tax return Rule 5. Amending 2012 federal tax return You Cannot File Form 2555 or Form 2555-EZ You cannot claim the earned income credit if you file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. Amending 2012 federal tax return You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. Amending 2012 federal tax return U. Amending 2012 federal tax return S. Amending 2012 federal tax return possessions are not foreign countries. Amending 2012 federal tax return See Publication 54, Tax Guide for U. Amending 2012 federal tax return S. Amending 2012 federal tax return Citizens and Resident Aliens Abroad, for more detailed information. Amending 2012 federal tax return Rule 6. Amending 2012 federal tax return Your Investment Income Must Be $3,300 or Less You cannot claim the earned income credit unless your investment income is $3,300 or less. Amending 2012 federal tax return If your investment income is more than $3,300, you cannot claim the credit. Amending 2012 federal tax return For most people, investment income is the total of the following amounts. Amending 2012 federal tax return Taxable interest (line 8a of Form 1040 or 1040A). Amending 2012 federal tax return Tax-exempt interest (line 8b of Form 1040 or 1040A). Amending 2012 federal tax return Dividend income (line 9a of Form 1040 or 1040A). Amending 2012 federal tax return Capital gain net income (line 13 of Form 1040, if more than zero, or line 10 of Form 1040A). Amending 2012 federal tax return If you file Form 1040EZ, your investment income is the total of the amount of line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. Amending 2012 federal tax return However, see Rule 6 in chapter 1 of Publication 596 if: You are filing Schedule E (Form 1040), Form 4797, or Form 8814, or You are reporting income from the rental of personal property on Form 1040, line 21. Amending 2012 federal tax return Rule 7. Amending 2012 federal tax return You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. Amending 2012 federal tax return If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. Amending 2012 federal tax return If you are an employee, earned income includes all the taxable income you get from your employer. Amending 2012 federal tax return If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the instructions for Form 1040. Amending 2012 federal tax return Earned Income Earned income includes all of the following types of income. Amending 2012 federal tax return Wages, salaries, tips, and other taxable employee pay. Amending 2012 federal tax return Employee pay is earned income only if it is taxable. Amending 2012 federal tax return Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Amending 2012 federal tax return But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained below. Amending 2012 federal tax return Net earnings from self-employment. Amending 2012 federal tax return Gross income received as a statutory employee. Amending 2012 federal tax return Wages, salaries, and tips. Amending 2012 federal tax return   Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. Amending 2012 federal tax return You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). Amending 2012 federal tax return Nontaxable combat pay election. Amending 2012 federal tax return   You can elect to include your nontaxable combat pay in earned income for the earned income credit. Amending 2012 federal tax return Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. Amending 2012 federal tax return Figure the credit with and without your nontaxable combat pay before making the election. Amending 2012 federal tax return   If you make the election, you must include in earned income all nontaxable combat pay you received. Amending 2012 federal tax return If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. Amending 2012 federal tax return In other words, if one of you makes the election, the other one can also make it but does not have to. Amending 2012 federal tax return   The amount of your nontaxable combat pay should be shown in box 12 of your Form W-2 with code “Q. Amending 2012 federal tax return ” Self-employed persons and statutory employees. Amending 2012 federal tax return   If you are self-employed or received income as a statutory employee, you must use the Form 1040 instructions to see if you qualify to get the EIC. Amending 2012 federal tax return Approved Form 4361 or Form 4029 This section is for persons who have an approved: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, or Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. Amending 2012 federal tax return Each approved form exempts certain income from social security taxes. Amending 2012 federal tax return Each form is discussed here in terms of what is or is not earned income for the EIC. Amending 2012 federal tax return Form 4361. Amending 2012 federal tax return   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. Amending 2012 federal tax return This includes wages, salaries, tips, and other taxable employee compensation. Amending 2012 federal tax return A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. Amending 2012 federal tax return Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. Amending 2012 federal tax return Examples include fees for performing marriages and honoraria for delivering speeches. Amending 2012 federal tax return Form 4029. Amending 2012 federal tax return   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. Amending 2012 federal tax return However, amounts you received as a self-employed individual do not count as earned income. Amending 2012 federal tax return Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. Amending 2012 federal tax return Disability Benefits If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Amending 2012 federal tax return Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. Amending 2012 federal tax return You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. Amending 2012 federal tax return Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Amending 2012 federal tax return Report taxable pension payments on Form 1040, lines 16a and 16b (or Form 1040A, lines 12a and 12b). Amending 2012 federal tax return Disability insurance payments. Amending 2012 federal tax return   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. Amending 2012 federal tax return It does not matter whether you have reached minimum retirement age. Amending 2012 federal tax return If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. Amending 2012 federal tax return ” Income That Is Not Earned Income Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. Amending 2012 federal tax return Do not include any of these items in your earned income. Amending 2012 federal tax return Earnings while an inmate. Amending 2012 federal tax return   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. Amending 2012 federal tax return This includes amounts for work performed while in a work release program or while in a halfway house. Amending 2012 federal tax return Workfare payments. Amending 2012 federal tax return   Nontaxable workfare payments are not earned income for the EIC. Amending 2012 federal tax return These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if private sector employment is not available, or (2) community service program activities. Amending 2012 federal tax return Community property. Amending 2012 federal tax return   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under those laws. Amending 2012 federal tax return That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. Amending 2012 federal tax return Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. Amending 2012 federal tax return Nevada, Washington, and California domestic partners. Amending 2012 federal tax return   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. Amending 2012 federal tax return Your earned income for the EIC does not include any amount earned by your partner. Amending 2012 federal tax return Your earned income includes the entire amount you earned. Amending 2012 federal tax return For details, see Publication 555. Amending 2012 federal tax return Conservation Reserve Program (CRP) payments. Amending 2012 federal tax return   If you were receiving social security retirement benefits or social security disability benefits at the time you received any CRP payments, your CRP payments are not earned income for the EIC. Amending 2012 federal tax return Nontaxable military pay. Amending 2012 federal tax return   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. Amending 2012 federal tax return Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). Amending 2012 federal tax return See Publication 3, Armed Forces' Tax Guide, for more information. Amending 2012 federal tax return    Combat pay. Amending 2012 federal tax return You can elect to include your nontaxable combat pay in earned income for the EIC. Amending 2012 federal tax return See Nontaxable combat pay election, earlier. Amending 2012 federal tax return Part B. Amending 2012 federal tax return Rules If You Have a Qualifying Child If you have met all of the rules in Part A , read Part B to see if you have a qualifying child. Amending 2012 federal tax return Part B discusses Rules 8 through 10. Amending 2012 federal tax return You must meet all three of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit with a qualifying child. Amending 2012 federal tax return You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. Amending 2012 federal tax return (You cannot file Form 1040EZ. Amending 2012 federal tax return ) You also must complete Schedule EIC and attach it to your return. Amending 2012 federal tax return If you meet all the rules in Part A and this part, read Part D to find out what to do next. Amending 2012 federal tax return If you do not meet Rule 8, you do not have a qualifying child. Amending 2012 federal tax return Read Part C to find out if you can get the earned income credit without a qualifying child. Amending 2012 federal tax return Rule 8. Amending 2012 federal tax return Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. Amending 2012 federal tax return The four tests are: Relationship, Age, Residency, and Joint return. Amending 2012 federal tax return The four tests are illustrated in Figure 36–1. Amending 2012 federal tax return The paragraphs that follow contain more information about each test. Amending 2012 federal tax return Relationship Test To be your qualifying child, a child must be your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), or Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew). Amending 2012 federal tax return The following definitions clarify the relationship test. Amending 2012 federal tax return Adopted child. Amending 2012 federal tax return   An adopted child is always treated as your own child. Amending 2012 federal tax return The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Amending 2012 federal tax return Foster child. Amending 2012 federal tax return   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgement, decree, or other order of any court of competent jurisdiction. Amending 2012 federal tax return An authorized placement agency includes a state or local government agency. Amending 2012 federal tax return It also includes a tax-exempt organization licensed by a state. Amending 2012 federal tax return In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. Amending 2012 federal tax return Example. Amending 2012 federal tax return Debbie, who is 12 years old, was placed in your care 2 years ago by an authorized agency responsible for placing children in foster homes. Amending 2012 federal tax return Debbie is your foster child. Amending 2012 federal tax return Age Test Your child must be: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a student, and younger than you (or your spouse, if filing jointly), or Permanently and totally disabled at any time during 2013, regardless of age. Amending 2012 federal tax return    The following examples and definitions clarify the age test. Amending 2012 federal tax return Example 1—child not under age 19. Amending 2012 federal tax return Your son turned 19 on December 10. Amending 2012 federal tax return Unless he was permanently and totally disabled or a student, he is not a qualifying child because, at the end of the year, he was not under age 19. Amending 2012 federal tax return Example 2—child not younger than you or your spouse. Amending 2012 federal tax return Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. Amending 2012 federal tax return He is not disabled. Amending 2012 federal tax return Both you and your spouse are 21 years old and you file a joint return. Amending 2012 federal tax return Your brother is not your qualifying child because he is not younger than you or your spouse. Amending 2012 federal tax return Example 3—child younger than your spouse but not younger than you. Amending 2012 federal tax return The facts are the same as in Example 2 except that your spouse is 25 years old. Amending 2012 federal tax return Because your brother is younger than your spouse, he is your qualifying child even though he is not younger than you. Amending 2012 federal tax return Student defined. Amending 2012 federal tax return   To qualify as a student, your child must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regular student body at the school, or A student taking a full-time, on-farm training course given by a school described in (1), or a state, county, or local government. Amending 2012 federal tax return The 5 calendar months need not be consecutive. Amending 2012 federal tax return   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. Amending 2012 federal tax return School defined. Amending 2012 federal tax return   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Amending 2012 federal tax return However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. Amending 2012 federal tax return Vocational high school students. Amending 2012 federal tax return   Students who work in co-op jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. Amending 2012 federal tax return Permanently and totally disabled. Amending 2012 federal tax return   Your child is permanently and totally disabled if both of the following apply. Amending 2012 federal tax return He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Amending 2012 federal tax return A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Amending 2012 federal tax return Residency Test Your child must have lived with you in the United States for more than half of 2013. Amending 2012 federal tax return The following definitions clarify the residency test. Amending 2012 federal tax return United States. Amending 2012 federal tax return   This means the 50 states and the District of Columbia. Amending 2012 federal tax return It does not include Puerto Rico or U. Amending 2012 federal tax return S. Amending 2012 federal tax return possessions such as Guam. Amending 2012 federal tax return Homeless shelter. Amending 2012 federal tax return   Your home can be any location where you regularly live. Amending 2012 federal tax return You do not need a traditional home. Amending 2012 federal tax return For example, if your child lived with you for more than half the year in one or more homeless shelters, your child meets the residency test. Amending 2012 federal tax return Military personnel stationed outside the United States. Amending 2012 federal tax return    U. Amending 2012 federal tax return S. Amending 2012 federal tax return military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. Amending 2012 federal tax return Figure 36-1. Amending 2012 federal tax return Tests for Qualifying Child Please click here for the text description of the image. Amending 2012 federal tax return Qualifying child Extended active duty. Amending 2012 federal tax return   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Amending 2012 federal tax return Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. Amending 2012 federal tax return Birth or death of a child. Amending 2012 federal tax return   A child who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the child's home for more than half the time he or she was alive in 2013. Amending 2012 federal tax return Temporary absences. Amending 2012 federal tax return   Count time that you or your child is away from home on a temporary absence due to a special circumstance as time the child lived with you. Amending 2012 federal tax return Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. Amending 2012 federal tax return Kidnapped child. Amending 2012 federal tax return    A kidnapped child is treated as living with you for more than half of the year if the child lived with you for more than half the part of the year before the date of the kidnapping. Amending 2012 federal tax return The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or your child's family. Amending 2012 federal tax return This treatment applies for all years until the child is returned. Amending 2012 federal tax return However, the last year this treatment can apply is the earlier of: The year there is a determination that the child is dead, or The year the child would have reached age 18. Amending 2012 federal tax return   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. Amending 2012 federal tax return Joint Return Test To meet this test, the child cannot file a joint return for the year. Amending 2012 federal tax return Exception. Amending 2012 federal tax return   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. Amending 2012 federal tax return Example 1—child files joint return. Amending 2012 federal tax return You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Amending 2012 federal tax return He earned $25,000 for the year. Amending 2012 federal tax return The couple files a joint return. Amending 2012 federal tax return Because your daughter and her husband filed a joint return, she is not your qualifying child. Amending 2012 federal tax return Example 2—child files joint return only to claim a refund of withheld tax. Amending 2012 federal tax return Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Amending 2012 federal tax return They do not have a child. Amending 2012 federal tax return Neither is required to file a tax return. Amending 2012 federal tax return Taxes were taken out of their pay, so they filed a joint return only to get a refund of the withheld taxes. Amending 2012 federal tax return The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Amending 2012 federal tax return Example 3—child files joint return to claim American opportunity credit. Amending 2012 federal tax return The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Amending 2012 federal tax return He and his wife are not required to file a tax return, but they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Amending 2012 federal tax return Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. Amending 2012 federal tax return The exception to the joint return test does not apply, so your son is not your qualifying child. Amending 2012 federal tax return Married child. Amending 2012 federal tax return   Even if your child does not file a joint return, if your child was married at the end of the year, he or she cannot be your qualifying child unless: You can claim an exemption for the child, or The reason you cannot claim an exemption for the child is that you let the child's other parent claim the exemption under the Special rule for divorced or separated parents (or parents who live apart) , described later. Amending 2012 federal tax return Social security number. Amending 2012 federal tax return   The qualifying child must have a valid social security number (SSN) unless the child was born and died in 2013 and you attach to your return a copy of the child's birth certificate, death certificate, or hospital records showing a live birth. Amending 2012 federal tax return You cannot claim the EIC on the basis of a qualifying child if: The qualifying child's SSN is missing from your tax return or is incorrect, The qualifying child's social security card says “Not valid for employment” and was issued for use in getting a federally funded benefit, or Instead of an SSN, the qualifying child has: An individual taxpayer identification number (ITIN), which is issued to a noncitizen who cannot get an SSN, or An adoption taxpayer identification number (ATIN), which is issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. Amending 2012 federal tax return   If you have more than one qualifying child and only one has a valid SSN, you can use only that child to claim the EIC. Amending 2012 federal tax return For more information about SSNs, see Rule 2 . Amending 2012 federal tax return Rule 9. Amending 2012 federal tax return Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Sometimes a child meets the tests to be a qualifying child of more than one person. Amending 2012 federal tax return However, only one of these persons can actually treat the child as a qualifying child. Amending 2012 federal tax return Only that person can use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). Amending 2012 federal tax return The exemption for the child. Amending 2012 federal tax return The child tax credit. Amending 2012 federal tax return Head of household filing status. Amending 2012 federal tax return The credit for child and dependent care expenses. Amending 2012 federal tax return The exclusion for dependent care benefits. Amending 2012 federal tax return The EIC. Amending 2012 federal tax return The other person cannot take any of these benefits based on this qualifying child. Amending 2012 federal tax return In other words, you and the other person cannot agree to divide these tax benefits between you. Amending 2012 federal tax return The other person cannot take any of these tax benefits unless he or she has a different qualifying child. Amending 2012 federal tax return The tiebreaker rules explained next explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. Amending 2012 federal tax return However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. Amending 2012 federal tax return Tiebreaker rules. Amending 2012 federal tax return   To determine which person can treat the child as a qualifying child to claim the six tax benefits just listed, the following tiebreaker rules apply. Amending 2012 federal tax return If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Amending 2012 federal tax return If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. Amending 2012 federal tax return If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. Amending 2012 federal tax return If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. Amending 2012 federal tax return If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. Amending 2012 federal tax return If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. Amending 2012 federal tax return If the child's parents file a joint return with each other, this rule can be applied by treating the parents' total AGI as divided evenly between them. Amending 2012 federal tax return See Example 8 . Amending 2012 federal tax return   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. Amending 2012 federal tax return See Examples 1 through 13 . Amending 2012 federal tax return   If you cannot claim the EIC because your qualifying child is treated under the tiebreaker rules as the qualifying child of another person for 2013, you may be able to take the EIC using a different qualifying child, but you cannot take the EIC using the rules in Part C for people who do not have a qualifying child. Amending 2012 federal tax return If the other person cannot claim the EIC. Amending 2012 federal tax return   If you and someone else have the same qualifying child but the other person cannot claim the EIC because he or she is not eligible or his or her earned income or AGI is too high, you may be able to treat the child as a qualifying child. Amending 2012 federal tax return See Examples 6 and 7 . Amending 2012 federal tax return But you cannot treat the child as a qualifying child to claim the EIC if the other person uses the child to claim any of the other six tax benefits listed earlier. Amending 2012 federal tax return Examples. Amending 2012 federal tax return The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. Amending 2012 federal tax return Example 1. Amending 2012 federal tax return You and your 2-year-old son Jimmy lived with your mother all year. Amending 2012 federal tax return You are 25 years old, unmarried, and your AGI is $9,000. Amending 2012 federal tax return Your only income was $9,000 from a part-time job. Amending 2012 federal tax return Your mother's only income was $20,000 from her job, and her AGI is $20,000. Amending 2012 federal tax return Jimmy's father did not live with you or Jimmy. Amending 2012 federal tax return The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. Amending 2012 federal tax return Jimmy is a qualifying child of both you and your mother because he meets the relationship, age, residency, and joint return tests for both you and your mother. Amending 2012 federal tax return However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier for which that person qualifies). Amending 2012 federal tax return He is not a qualifying child of anyone else, including his father. Amending 2012 federal tax return If you do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can treat him as a qualifying child to claim the EIC (and any of the other tax benefits listed earlier for which she qualifies). Amending 2012 federal tax return Example 2. Amending 2012 federal tax return The facts are the same as in Example 1 except your AGI is $25,000. Amending 2012 federal tax return Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. Amending 2012 federal tax return Only you can claim him. Amending 2012 federal tax return Example 3. Amending 2012 federal tax return The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. Amending 2012 federal tax return In this case, you as the child's parent will be the only one allowed to claim Jimmy as a qualifying child for the EIC and the other tax benefits listed earlier for which you qualify. Amending 2012 federal tax return The IRS will disallow your mother's claim to the EIC and any of the other tax benefits listed earlier unless she has another qualifying child. Amending 2012 federal tax return Example 4. Amending 2012 federal tax return The facts are the same as in Example 1 except that you also have two other young children who are qualifying children of both you and your mother. Amending 2012 federal tax return Only one of you can claim each child. Amending 2012 federal tax return However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Amending 2012 federal tax return For example, if you claim one child, your mother can claim the other two. Amending 2012 federal tax return Example 5. Amending 2012 federal tax return The facts are the same as in Example 1 except that you are only 18 years old. Amending 2012 federal tax return This means you are a qualifying child of your mother. Amending 2012 federal tax return Because of Rule 10 , discussed next, you cannot claim the EIC and cannot claim Jimmy as a qualifying child. Amending 2012 federal tax return Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. Amending 2012 federal tax return If your mother meets all the other requirements for claiming the EIC and you do not claim Jimmy as a qualifying child for any of the other tax benefits listed earlier, your mother can claim both you and Jimmy as qualifying children for the EIC. Amending 2012 federal tax return Example 6. Amending 2012 federal tax return The facts are the same as in Example 1 except that your mother earned $50,000 from her job. Amending 2012 federal tax return Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. Amending 2012 federal tax return Example 7. Amending 2012 federal tax return The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. Amending 2012 federal tax return Your earned income is too high for you to claim the EIC. Amending 2012 federal tax return But your mother cannot claim the EIC either, because her AGI is not higher than yours. Amending 2012 federal tax return Example 8. Amending 2012 federal tax return The facts are the same as in Example 1 except that you and Jimmy's father are married to each other, live with Jimmy and your mother, and have an AGI of $30,000 on a joint return. Amending 2012 federal tax return If you and your husband do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can claim him instead. Amending 2012 federal tax return Even though the AGI on your joint return, $30,000, is more than your mother's AGI of $20,000, for this purpose half of the joint AGI can be treated as yours and half as your husband's. Amending 2012 federal tax return In other words, each parent's AGI can be treated as $15,000. Amending 2012 federal tax return Example 9. Amending 2012 federal tax return You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. Amending 2012 federal tax return In August and September, Joey lived with you. Amending 2012 federal tax return For the rest of the year, Joey lived with your husband, who is Joey's father. Amending 2012 federal tax return Joey is a qualifying child of both you and your husband because he lived with each of you for more than half the year and because he met the relationship, age, and joint return tests for both of you. Amending 2012 federal tax return At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the special rule for divorced or separated parents (or parents who live apart) does not apply. Amending 2012 federal tax return You and your husband will file separate returns. Amending 2012 federal tax return Your husband agrees to let you treat Joey as a qualifying child. Amending 2012 federal tax return This means, if your husband does not claim Joey as a qualifying child for any of the tax benefits listed earlier, you can claim him as a qualifying child for any tax benefit listed earlier for which you qualify. Amending 2012 federal tax return However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. Amending 2012 federal tax return See Rule 3 . Amending 2012 federal tax return Example 10. Amending 2012 federal tax return The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. Amending 2012 federal tax return In this case, only your husband will be allowed to treat Joey as a qualifying child. Amending 2012 federal tax return This is because, during 2013, the boy lived with him longer than with you. Amending 2012 federal tax return You cannot claim the EIC (either with or without a qualifying child). Amending 2012 federal tax return However, your husband's filing status is married filing separately, so he cannot claim the EIC or the credit for child and dependent care expenses. Amending 2012 federal tax return See Rule 3 . Amending 2012 federal tax return Example 11. Amending 2012 federal tax return You, your 5-year-old son and your son's father lived together all year. Amending 2012 federal tax return You and your son's father are not married. Amending 2012 federal tax return Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, and joint return tests for both you and his father. Amending 2012 federal tax return Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. Amending 2012 federal tax return Neither of you had any other income. Amending 2012 federal tax return Your son's father agrees to let you treat the child as a qualifying child. Amending 2012 federal tax return This means, if your son's father does not claim your son as a qualifying child for the EIC or any of the other tax benefits listed earlier, you can claim him as a qualifying child for the EIC and any of the other tax benefits listed earlier for which you qualify. Amending 2012 federal tax return Example 12. Amending 2012 federal tax return The facts are the same as in Example 11 except that you and your son's father both claim your son as a qualifying child. Amending 2012 federal tax return In this case, only your son's father will be allowed to treat your son as a qualifying child. Amending 2012 federal tax return This is because his AGI, $14,000, is more than your AGI, $12,000. Amending 2012 federal tax return You cannot claim the EIC (either with or without a qualifying child). Amending 2012 federal tax return Example 13. Amending 2012 federal tax return You and your 7-year-old niece, your sister's child, lived with your mother all year. Amending 2012 federal tax return You are 25 years old, and your AGI is $9,300. Amending 2012 federal tax return Your only income was from a part-time job. Amending 2012 federal tax return Your mother's AGI is $15,000. Amending 2012 federal tax return Her only income was from her job. Amending 2012 federal tax return Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Amending 2012 federal tax return Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, and joint return tests for both you and your mother. Amending 2012 federal tax return However, only your mother can treat her as a qualifying child. Amending 2012 federal tax return This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Amending 2012 federal tax return Special rule for divorced or separated parents (or parents who live apart). Amending 2012 federal tax return   A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following statements are true. Amending 2012 federal tax return The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of 2013, whether or not they are or were married. Amending 2012 federal tax return The child received over half of his or her support for the year from the parents. Amending 2012 federal tax return The child is in the custody of one or both parents for more than half of 2013. Amending 2012 federal tax return Either of the following statements is true. Amending 2012 federal tax return The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return. Amending 2012 federal tax return If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Amending 2012 federal tax return A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 provides that the noncustodial parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during 2013. Amending 2012 federal tax return  For details, see chapter 3. Amending 2012 federal tax return Also see Applying Rule 9 to divorced or separated parents (or parents who live apart) , next. Amending 2012 federal tax return Applying Rule 9 to divorced or separated parents (or parents who live apart). Amending 2012 federal tax return   If a child is treated as the qualifying child of the noncustodial parent under the special rule just described for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. Amending 2012 federal tax return However, the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for the EIC and other tax benefits listed earlier in this chapter. Amending 2012 federal tax return If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine which person can treat the child as a qualifying child. Amending 2012 federal tax return Example 1. Amending 2012 federal tax return You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Amending 2012 federal tax return Your AGI is $10,000. Amending 2012 federal tax return Your mother’s AGI is $25,000. Amending 2012 federal tax return Your son's father did not live with you or your son. Amending 2012 federal tax return Under the special rule for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child. Amending 2012 federal tax return However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the EIC. Amending 2012 federal tax return You and your mother did not have any child care expenses or dependent care benefits. Amending 2012 federal tax return If you do not claim your son as a qualifying child, your mother can claim him as a qualifying child for the EIC and head of household filing status, if she qualifies for these tax benefits. Amending 2012 federal tax return Example 2. Amending 2012 federal tax return The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. Amending 2012 federal tax return Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Amending 2012 federal tax return Example 3. Amending 2012 federal tax return The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the EIC. Amending 2012 federal tax return Your mother also claims him as a qualifying child for head of household filing status. Amending 2012 federal tax return You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. Amending 2012 federal tax return The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. Amending 2012 federal tax return Rule 10. Amending 2012 federal tax return You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Amending 2012 federal tax return ) if all of the following statements are true. Amending 2012 federal tax return You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Amending 2012 federal tax return Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Amending 2012 federal tax return You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Amending 2012 federal tax return You lived with that person in the United States for more than half of the year. Amending 2012 federal tax return You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Amending 2012 federal tax return For more details about the tests to be a qualifying child, see Rule 8 . Amending 2012 federal tax return If you are a qualifying child of another taxpayer, you cannot claim the EIC. Amending 2012 federal tax return This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Amending 2012 federal tax return Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). Amending 2012 federal tax return Example. Amending 2012 federal tax return You and your daughter lived with your mother all year. Amending 2012 federal tax return You are 22 years old, unmarried, and attended a trade school full time. Amending 2012 federal tax return You had a part-time job and earned $5,700. Amending 2012 federal tax return You had no other income. Amending 2012 federal tax return Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. Amending 2012 federal tax return She can claim the EIC if she meets all the other requirements. Amending 2012 federal tax return Because you are your mother's qualifying child, you cannot claim the EIC. Amending 2012 federal tax return This is so even if your mother cannot or does not claim the EIC. Amending 2012 federal tax return Child of person not required to file a return. Amending 2012 federal tax return   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Amending 2012 federal tax return Example. Amending 2012 federal tax return The facts are the same as in the last example except your mother had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Amending 2012 federal tax return As a result, you are not your mother's qualifying child. Amending 2012 federal tax return You can claim the EIC if you meet all the other requirements to do so. Amending 2012 federal tax return   See Rule 10 in Publication 596 for additional examples. Amending 2012 federal tax return Part C. Amending 2012 federal tax return Rules If You Do Not Have a Qualifying Child Read this part if you: Do not have a qualifying child, and Have met all the rules in Part A . Amending 2012 federal tax return  Part C discusses Rules 11 through 14. Amending 2012 federal tax return You must meet all four of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit without a qualifying child. Amending 2012 federal tax return If you have a qualifying child, the rules in this part do not apply to you. Amending 2012 federal tax return You can claim the credit only if you meet all the rules in Parts A, B, and D. Amending 2012 federal tax return See Rule 8 to find out if you have a qualifying child. Amending 2012 federal tax return Rule 11. Amending 2012 federal tax return You Must Be at Least Age 25 but Under Age 65 You must be at least age 25 but under age 65 at the end of 2013. Amending 2012 federal tax return If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65 at the end of 2013. Amending 2012 federal tax return It does not matter which spouse meets the age test, as long as one of the spouses does. Amending 2012 federal tax return You meet the age test if you were born after December 31, 1948, and before January 2, 1989. Amending 2012 federal tax return If you are married filing a joint return, you meet the age test if either you or your spouse was born after December 31, 1948, and before January 2, 1989. Amending 2012 federal tax return If neither you nor your spouse meets the age test, you cannot claim the EIC. Amending 2012 federal tax return Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Amending 2012 federal tax return Death of spouse. Amending 2012 federal tax return   If you are filing a joint return with your spouse who died in 2013, you meet the age test if your spouse was at least age 25 but under age 65 at the time of death. Amending 2012 federal tax return Example 1. Amending 2012 federal tax return You are age 28 and unmarried. Amending 2012 federal tax return You meet the age test. Amending 2012 federal tax return Example 2—spouse meets age test. Amending 2012 federal tax return You are married and filing a joint return. Amending 2012 federal tax return You are age 23 and your spouse is age 27. Amending 2012 federal tax return You meet the age test because your spouse is at least age 25 but under age 65. Amending 2012 federal tax return Example 3—spouse dies in 2013. Amending 2012 federal tax return You are married and filing a joint return with your spouse who died in August 2013. Amending 2012 federal tax return You are age 67. Amending 2012 federal tax return Your spouse would have become age 65 in November 2013. Amending 2012 federal tax return Because your spouse was under age 65 when she died, you meet the age test. Amending 2012 federal tax return Rule 12. Amending 2012 federal tax return You Cannot Be the Dependent of Another Person If you are not filing a joint return, you meet this rule if: You checked box 6a on Form 1040 or 1040A, or You did not check the “You” box on line 5 of Form 1040EZ, and you entered $10,000 on that line. Amending 2012 federal tax return If you are filing a joint return, you meet this rule if: You checked both box 6a and box 6b on Form 1040 or 1040A, or You and your spouse did not check either the “You” box or the “Spouse” box on line 5 of Form 1040EZ, and you entered $20,000 on that line. Amending 2012 federal tax return If you are not sure whether someone else can claim you (or your spouse, if filing a joint return) as a dependent, read the rules for claiming a dependent in chapter 3. Amending 2012 federal tax return If someone else can claim you (or your spouse, if filing a joint return) as a dependent on his or her return, but does not, you still cannot claim the credit. Amending 2012 federal tax return Example 1. Amending 2012 federal tax return In 2013, you were age 25, single, and living at home with your parents. Amending 2012 federal tax return You worked and were not a student. Amending 2012 federal tax return You earned $7,500. Amending 2012 federal tax return Your parents cannot claim you as a dependent. Amending 2012 federal tax return When you file your return, you claim an exemption for yourself by not checking the “You” box on line 5 of your Form 1040EZ and by entering $10,000 on that line. Amending 2012 federal tax return You meet this rule. Amending 2012 federal tax return You can claim the EIC if you meet all the other requirements. Amending 2012 federal tax return Example 2. Amending 2012 federal tax return The facts are the same as in Example 1 , except that you earned $2,000. Amending 2012 federal tax return Your parents can claim you as a dependent but decide not to. Amending 2012 federal tax return You do not meet this rule. Amending 2012 federal tax return You cannot claim the credit because your parents could have claimed you as a dependent. Amending 2012 federal tax return Joint returns. Amending 2012 federal tax return   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. Amending 2012 federal tax return   However, another person may be able to claim you as a dependent if you and your spouse file a joint return only to get a refund of income tax withheld or estimated tax paid. Amending 2012 federal tax return But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. Amending 2012 federal tax return Example 1. Amending 2012 federal tax return You are 26 years old. Amending 2012 federal tax return You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. Amending 2012 federal tax return Neither you nor your wife is required to file a tax return. Amending 2012 federal tax return You do not have a child. Amending 2012 federal tax return Taxes were taken out of your pay, so you file a joint return only to get a refund of the withheld taxes. Amending 2012 federal tax return Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. Amending 2012 federal tax return They can claim exemptions for you and your wife if all the other tests to do so are met. Amending 2012 federal tax return Example 2. Amending 2012 federal tax return The facts are the same as in Example 1 except no taxes were taken out of your pay. Amending 2012 federal tax return Also, you and your wife are not required to file a tax return, but you file a joint return to claim an EIC of $63 and get a refund of that amount. Amending 2012 federal tax return Because claiming the EIC is your reason for filing the return, you are not filing it only to get a refund of income tax withheld or estimated tax paid. Amending 2012 federal tax return Your parents cannot claim an exemption for either you or your wife. Amending 2012 federal tax return Rule 13. Amending 2012 federal tax return You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Amending 2012 federal tax return ) if all of the following statements are true. Amending 2012 federal tax return You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Amending 2012 federal tax return Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Amending 2012 federal tax return You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student (as defined in Rule 8 ), and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Amending 2012 federal tax return You lived with that person in the United States for more than half of the year. Amending 2012 federal tax return You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Amending 2012 federal tax return For more details about the tests to be a qualifying child, see Rule 8 . Amending 2012 federal tax return If you are a qualifying child of another taxpayer, you cannot claim the EIC. Amending 2012 federal tax return This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Amending 2012 federal tax return Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Amending 2012 federal tax return Example. Amending 2012 federal tax return You lived with your mother all year. Amending 2012 federal tax return You are age 26, unmarried, and permanently and totally disabled. Amending 2012 federal tax return Your only income was from a community center where you went three days a week to answer telephones. Amending 2012 federal tax return You earned $5,000 for the year and provided more than half of your own support. Amending 2012 federal tax return Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. Amending 2012 federal tax return She can claim the EIC if she meets all the other requirements. Amending 2012 federal tax return Because you are a qualifying child of your mother, you cannot claim the EIC. Amending 2012 federal tax return This is so even if your mother cannot or does not claim the EIC. Amending 2012 federal tax return Joint returns. Amending 2012 federal tax return   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. Amending 2012 federal tax return   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return for the year only to get a refund of income tax withheld or estimated tax paid. Amending 2012 federal tax return But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. Amending 2012 federal tax return Child of person not required to file a return. Amending 2012 federal tax return   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Amending 2012 federal tax return Example. Amending 2012 federal tax return You lived all year with your father. Amending 2012 federal tax return You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. Amending 2012 federal tax return You have no other income, no children, and provided more than half of your own support. Amending 2012 federal tax return Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Amending 2012 federal tax return As a result, you are not your father's qualifying child. Amending 2012 federal tax return You can claim the EIC if you meet all the other requirements to do so. Amending 2012 federal tax return   See Rule 13 in Publication 596 for additional examples. Amending 2012 federal tax return Rule 14. Amending 2012 federal tax return You Must Have Lived in the United States More Than Half of the Year Your home (and your spouse's, if filing a joint return) must have been in the United States for more than half the year. Amending 2012 federal tax return If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Amending 2012 federal tax return United States. Amending 2012 federal tax return   This means the 50 states and the District of Columbia. Amending 2012 federal tax return It does not include Puerto Rico or U. Amending 2012 federal tax return S. Amending 2012 federal tax return possessions such as Guam. Amending 2012 federal tax return Homeless shelter. Amending 2012 federal tax return   Your home can be any location where you regularly live. Amending 2012 federal tax return You do not need a traditional home. Amending 2012 federal tax return If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. Amending 2012 federal tax return Military personnel stationed outside the United States. Amending 2012 federal tax return   U. Amending 2012 federal tax return S. Amending 2012 federal tax return military personnel stationed outside the United States on extended active duty (defined in Rule 8 ) are considered to live in the United States during that duty period for purposes of the EIC. Amending 2012 federal tax return Part D. Amending 2012 federal tax return Figuring and Claiming the EIC Read this part if you have met all the rules in Parts A and B, or all the rules in Parts A and C. Amending 2012 federal tax return Part D discusses Rule 15 . Amending 2012 federal tax return You must meet this rule, in addition to the rules in Parts A and B , or Parts A and C , to qualify for the earned income credit. Amending 2012 federal tax return This part of the chapter also explains how to figure the amount of your credit. Amending 2012 federal tax return You have two choices. Amending 2012 federal tax return Have the IRS figure the EIC for you. Amending 2012 federal tax return If you want to do this, see IRS Will Figure the EIC for You . Amending 2012 federal tax return Figure the EIC yourself. Amending 2012 federal tax return If you want to do this, see How To Figure the EIC Yourself . Amending 2012 federal tax return Rule 15. Amending 2012 federal tax return Your Earned Income Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Amending 2012 federal tax return Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Amending 2012 federal tax return Employee pay is earned income only if it is taxable. Amending 2012 federal tax return Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Amending 2012 federal tax return But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Amending 2012 federal tax return Earned income is explained in detail in Rule 7 . Amending 2012 federal tax return Figuring earned income. Amending 2012 federal tax return   If you are self-employed, a statutory employee, or a member of the clergy or a church employee who files Schedule SE (Form 1040), you will figure your earned income when you fill out Part 4 of EIC Worksheet B in the Form 1040 instructions. Amending 2012 federal tax return   Otherwise, figure your earned income by using the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b or the Form 1040A instructions for lines 38a and 38b, or the worksheet in Step 2 of the Form 1040EZ instructions for lines 8a and 8b. Amending 2012 federal tax return   When using one of those worksheets to figure your earned income, you will start with the amount on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). Amending 2012 federal tax return You will then reduce that amount by any amount included on that line and described in the following list: Scholarship or fellowship grants not reported on a Form W-2, Inmate's income, and Pension or annuity from deferred compensation plans. Amending 2012 federal tax return Scholarship or fellowship grants not reported on a Form W-2. Amending 2012 federal tax return   A scholarship or fellowship grant that was not reported to you on a Form W-2 is not considered earned income for the earned income credit. Amending 2012 federal tax return Inmate's income. Amending 2012 federal tax return   Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. Amending 2012 federal tax return This includes amounts received for work performed while in a work release program or while in a halfway house. Amending 2012 federal tax return If you received any amount for work done while an inmate in a penal institution and that amount is included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “PRI” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Amending 2012 federal tax return Pension or annuity from deferred compensation plans. Amending 2012 federal tax return   A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan is not considered earned income for the earned income credit. Amending 2012 federal tax return If you received such an amount and it was included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “DFC” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Amending 2012 federal tax return This amount may be reported in box 11 of your Form W-2. Amending 2012 federal tax return If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. Amending 2012 federal tax return Clergy. Amending 2012 federal tax return   If you are a member of the clergy who files Schedule SE and the amount on line 2 of that schedule includes an amount that was also reported on line 7 (Form 1040), subtract that amount from the amount on line 7 (Form 1040) and enter the result in the first space of the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b. Amending 2012 federal tax return Put “Clergy” on the dotted line next to line 64a (Form 1040). Amending 2012 federal tax return Church employees. Amending 2012 federal tax return    A church employee means an employee (other than a minister or member of a religious order) of a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes. Amending 2012 federal tax return If you received wages as a
Print - Click this link to Print this page

SOI Tax Stats - Individual Income Tax Return (Form 1040) Statistics

Return to the Tax Stats home page

Featured Areas

 

Publications

Statistical Tables

Other Information for Individuals

Individual Data by Geographic Areas

Other IRS Data and Related Links

Return to Tax Stats home page

Page Last Reviewed or Updated: 07-Feb-2014

The Amending 2012 Federal Tax Return

Amending 2012 federal tax return 28. Amending 2012 federal tax return   Miscellaneous Deductions Table of Contents What's New Introduction Useful Items - You may want to see: Deductions Subject to the 2% LimitUnreimbursed Employee Expenses (Line 21) Tax Preparation Fees (Line 22) Other Expenses (Line 23) Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses What's New Standard mileage rate. Amending 2012 federal tax return  The 2013 rate for business use of a vehicle is 56½ cents per mile. Amending 2012 federal tax return Introduction This chapter explains which expenses you can claim as miscellaneous itemized deductions on Schedule A (Form 1040). Amending 2012 federal tax return You must reduce the total of most miscellaneous itemized deductions by 2% of your adjusted gross income. Amending 2012 federal tax return This chapter covers the following topics. Amending 2012 federal tax return Deductions subject to the 2% limit. Amending 2012 federal tax return Deductions not subject to the 2% limit. Amending 2012 federal tax return Expenses you cannot deduct. Amending 2012 federal tax return You must keep records to verify your deductions. Amending 2012 federal tax return You should keep receipts, canceled checks, substitute checks, financial account statements, and other documentary evidence. Amending 2012 federal tax return For more information on recordkeeping, get Publication 552, Record- keeping for Individuals. Amending 2012 federal tax return Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 529 Miscellaneous Deductions 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) 946 How To Depreciate Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses Deductions Subject to the 2% Limit You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040). Amending 2012 federal tax return You can claim the amount of expenses that is more than 2% of your adjusted gross income. Amending 2012 federal tax return You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. Amending 2012 federal tax return Your adjusted gross income is the amount on Form 1040, line 38. Amending 2012 federal tax return Generally, you apply the 2% limit after you apply any other deduction limit. Amending 2012 federal tax return For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed in chapter 26) before you apply the 2% limit. Amending 2012 federal tax return Deductions subject to the 2% limit are discussed in the three categories in which you report them on Schedule A (Form 1040). Amending 2012 federal tax return Unreimbursed employee expenses (line 21). Amending 2012 federal tax return Tax preparation fees (line 22). Amending 2012 federal tax return Other expenses (line 23). Amending 2012 federal tax return Unreimbursed Employee Expenses (Line 21) Generally, you can deduct on Schedule A (Form 1040), line 21, unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. Amending 2012 federal tax return An expense is ordinary if it is common and accepted in your trade, business, or profession. Amending 2012 federal tax return An expense is necessary if it is appropriate and helpful to your business. Amending 2012 federal tax return An expense does not have to be required to be considered necessary. Amending 2012 federal tax return Examples of unreimbursed employee expenses are listed next. Amending 2012 federal tax return The list is followed by discussions of additional unreimbursed employee expenses. Amending 2012 federal tax return Business bad debt of an employee. Amending 2012 federal tax return Education that is work related. Amending 2012 federal tax return (See chapter 27. Amending 2012 federal tax return ) Legal fees related to your job. Amending 2012 federal tax return Licenses and regulatory fees. Amending 2012 federal tax return Malpractice insurance premiums. Amending 2012 federal tax return Medical examinations required by an employer. Amending 2012 federal tax return Occupational taxes. Amending 2012 federal tax return Passport for a business trip. Amending 2012 federal tax return Subscriptions to professional journals and trade magazines related to your work. Amending 2012 federal tax return Travel, transportation, entertainment, and gifts related to your work. Amending 2012 federal tax return (See chapter 26. Amending 2012 federal tax return ) Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. Amending 2012 federal tax return Damages for Breach of Employment Contract If you break an employment contract, you can deduct damages you pay your former employer that are attributable to the pay you received from that employer. Amending 2012 federal tax return Depreciation on Computers You can claim a depreciation deduction for a computer that you use in your work as an employee if its use is: For the convenience of your employer, and Required as a condition of your employment. Amending 2012 federal tax return For more information about the rules and exceptions to the rules affecting the allowable deductions for a home computer, see Publication 529. Amending 2012 federal tax return Dues to Chambers of Commerce and Professional Societies You may be able to deduct dues paid to professional organizations (such as bar associations and medical associations) and to chambers of commerce and similar organizations, if membership helps you carry out the duties of your job. Amending 2012 federal tax return Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. Amending 2012 federal tax return Lobbying and political activities. Amending 2012 federal tax return   You may not be able to deduct that part of your dues that is for certain lobbying and political activities. Amending 2012 federal tax return See Dues used for lobbying under Nondeductible Expenses, later. Amending 2012 federal tax return Educator Expenses If you were an eligible educator in 2013, you can deduct up to $250 of qualified expenses you paid in 2013 as an adjustment to gross income on Form 1040, line 23, rather than as a miscellaneous itemized deduction. Amending 2012 federal tax return If you file Form 1040A, you can deduct these expenses on line 16. Amending 2012 federal tax return If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. Amending 2012 federal tax return However, neither spouse can deduct more than $250 of his or her qualified expenses. Amending 2012 federal tax return Home Office If you use a part of your home regularly and exclusively for business purposes, you may be able to deduct a part of the operating expenses and depreciation of your home. Amending 2012 federal tax return You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively: As your principal place of business for any trade or business, As a place to meet or deal with your patients, clients, or customers in the normal course of your trade or business, or In the case of a separate structure not attached to your home, in connection with your trade or business. Amending 2012 federal tax return The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. Amending 2012 federal tax return See Publication 587 for more detailed information and a worksheet. Amending 2012 federal tax return Job Search Expenses You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. Amending 2012 federal tax return You cannot deduct these expenses if: You are looking for a job in a new occupation, There was a substantial break between the ending of your last job and your looking for a new one, or You are looking for a job for the first time. Amending 2012 federal tax return Employment and outplacement agency fees. Amending 2012 federal tax return   You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. Amending 2012 federal tax return Employer pays you back. Amending 2012 federal tax return   If, in a later year, your employer pays you back for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year. Amending 2012 federal tax return (See Recoveries in chapter 12. Amending 2012 federal tax return ) Employer pays the employment agency. Amending 2012 federal tax return   If your employer pays the fees directly to the employment agency and you are not responsible for them, you do not include them in your gross income. Amending 2012 federal tax return Résumé. Amending 2012 federal tax return   You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation. Amending 2012 federal tax return Travel and transportation expenses. Amending 2012 federal tax return   If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. Amending 2012 federal tax return You can deduct the travel expenses if the trip is primarily to look for a new job. Amending 2012 federal tax return The amount of time you spend on personal activity compared to the amount of time you spend in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job. Amending 2012 federal tax return   Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your present occupation while in the area. Amending 2012 federal tax return   You can choose to use the standard mileage rate to figure your car expenses. Amending 2012 federal tax return The 2013 rate for business use of a vehicle is 56½ cents per mile. Amending 2012 federal tax return See chapter 26 for more information. Amending 2012 federal tax return Licenses and Regulatory Fees You can deduct the amount you pay each year to state or local governments for licenses and regulatory fees for your trade, business, or profession. Amending 2012 federal tax return Occupational Taxes You can deduct an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. Amending 2012 federal tax return If you are an employee, you can claim occupational taxes only as a miscellaneous deduction subject to the 2% limit; you cannot claim them as a deduction for taxes elsewhere on your return. Amending 2012 federal tax return Repayment of Income Aid Payment An “income aid payment” is one that is received under an employer's plan to aid employees who lose their jobs because of lack of work. Amending 2012 federal tax return If you repay a lump-sum income aid payment that you received and included in income in an earlier year, you can deduct the repayment. Amending 2012 federal tax return Research Expenses of a College Professor If you are a college professor, you can deduct research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to your teaching duties. Amending 2012 federal tax return You must have undertaken the research as a means of carrying out the duties expected of a professor and without expectation of profit apart from salary. Amending 2012 federal tax return However, you cannot deduct the cost of travel as a form of education. Amending 2012 federal tax return Tools Used in Your Work Generally, you can deduct amounts you spend for tools used in your work if the tools wear out and are thrown away within 1 year from the date of purchase. Amending 2012 federal tax return You can depreciate the cost of tools that have a useful life substantially beyond the tax year. Amending 2012 federal tax return For more information about depreciation, see Publication 946. Amending 2012 federal tax return Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. Amending 2012 federal tax return You can also deduct assessments for benefit payments to unemployed union members. Amending 2012 federal tax return However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. Amending 2012 federal tax return Also, you cannot deduct contributions to a pension fund, even if the union requires you to make the contributions. Amending 2012 federal tax return You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. Amending 2012 federal tax return See Lobbying Expenses under Nondeductible Expenses, later. Amending 2012 federal tax return Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. Amending 2012 federal tax return You must wear them as a condition of your employment. Amending 2012 federal tax return The clothes are not suitable for everyday wear. Amending 2012 federal tax return It is not enough that you wear distinctive clothing. Amending 2012 federal tax return The clothing must be specifically required by your employer. Amending 2012 federal tax return Nor is it enough that you do not, in fact, wear your work clothes away from work. Amending 2012 federal tax return The clothing must not be suitable for taking the place of your regular clothing. Amending 2012 federal tax return Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc. Amending 2012 federal tax return ). Amending 2012 federal tax return Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. Amending 2012 federal tax return However, work clothing consisting of white cap, white shirt or white jacket, white bib overalls, and standard work shoes, which a painter is required by his union to wear on the job, is not distinctive in character or in the nature of a uniform. Amending 2012 federal tax return Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. Amending 2012 federal tax return Protective clothing. Amending 2012 federal tax return   You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves. Amending 2012 federal tax return   Examples of workers who may be required to wear safety items are: carpenters, cement workers, chemical workers, electricians, fishing boat crew members, machinists, oil field workers, pipe fitters, steamfitters, and truck drivers. Amending 2012 federal tax return Military uniforms. Amending 2012 federal tax return   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. Amending 2012 federal tax return However, if you are an armed forces reservist, you can deduct the unreimbursed cost of your uniform if military regulations restrict you from wearing it except while on duty as a reservist. Amending 2012 federal tax return In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. Amending 2012 federal tax return   If local military rules do not allow you to wear fatigue uniforms when you are off duty, you can deduct the amount by which the cost of buying and keeping up these uniforms is more than the uniform allowance you receive. Amending 2012 federal tax return   You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. Amending 2012 federal tax return Tax Preparation Fees (Line 22) You can usually deduct tax preparation fees in the year you pay them. Amending 2012 federal tax return Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. Amending 2012 federal tax return These fees include the cost of tax preparation software programs and tax publications. Amending 2012 federal tax return They also include any fee you paid for electronic filing of your return. Amending 2012 federal tax return Other Expenses (Line 23) You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2% limit. Amending 2012 federal tax return On Schedule A (Form 1040), line 23, you can deduct expenses that you pay: To produce or collect income that must be included in your gross income, To manage, conserve, or maintain property held for producing such income, or To determine, contest, pay, or claim a refund of any tax. Amending 2012 federal tax return You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonably and closely related to these purposes. Amending 2012 federal tax return Some of these other expenses are explained in the following discussions. Amending 2012 federal tax return If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses , later, under Nondeductible Expenses. Amending 2012 federal tax return Appraisal Fees You can deduct appraisal fees if you pay them to figure a casualty loss or the fair market value of donated property. Amending 2012 federal tax return Casualty and Theft Losses You can deduct a casualty or theft loss as a miscellaneous itemized deduction subject to the 2% limit if you used the damaged or stolen property in performing services as an employee. Amending 2012 federal tax return First report the loss in Section B of Form 4684, Casualties and Thefts. Amending 2012 federal tax return You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Amending 2012 federal tax return To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Amending 2012 federal tax return For other casualty and theft losses, see chapter 25. Amending 2012 federal tax return Clerical Help and Office Rent You can deduct office expenses, such as rent and clerical help, that you have in connection with your investments and collecting the taxable income on them. Amending 2012 federal tax return Credit or Debit Card Convenience Fees You can deduct the convenience fee charged by the card processor for paying your income tax (including estimated tax payments) by credit or debit card. Amending 2012 federal tax return The fees are deductible in the year paid. Amending 2012 federal tax return Depreciation on Home Computer You can deduct depreciation on your home computer if you use it to produce income (for example, to manage your investments that produce taxable income). Amending 2012 federal tax return You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. Amending 2012 federal tax return But if you work as an employee and also use the computer in that work, see Publication 946. Amending 2012 federal tax return Excess Deductions of an Estate If an estate's total deductions in its last tax year are more than its gross income for that year, the beneficiaries succeeding to the estate's property can deduct the excess. Amending 2012 federal tax return Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. Amending 2012 federal tax return The beneficiaries can claim the deduction only for the tax year in which, or with which, the estate terminates, whether the year of termination is a normal year or a short tax year. Amending 2012 federal tax return For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. Amending 2012 federal tax return Fees to Collect Interest and Dividends You can deduct fees you pay to a broker, bank, trustee, or similar agent to collect your taxable bond interest or dividends on shares of stock. Amending 2012 federal tax return But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. Amending 2012 federal tax return You must add the fee to the cost of the property. Amending 2012 federal tax return You cannot deduct the fee you pay to a broker to sell securities. Amending 2012 federal tax return You can use the fee only to figure gain or loss from the sale. Amending 2012 federal tax return See the Instructions for Form 8949 for information on how to report the fee. Amending 2012 federal tax return Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. Amending 2012 federal tax return A hobby is not a business because it is not carried on to make a profit. Amending 2012 federal tax return See Activity not for profit in chapter 12 under Other Income. Amending 2012 federal tax return Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. Amending 2012 federal tax return Deductions of pass-through entities are passed through to the partners or shareholders. Amending 2012 federal tax return The partners or shareholders can deduct their share of passed-through deductions for investment expenses as miscellaneous itemized deductions subject to the 2% limit. Amending 2012 federal tax return Example. Amending 2012 federal tax return You are a member of an investment club that is formed solely to invest in securities. Amending 2012 federal tax return The club is treated as a partnership. Amending 2012 federal tax return The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. Amending 2012 federal tax return In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. Amending 2012 federal tax return However, if the investment club partnership has investments that also produce nontaxable income, you cannot deduct your share of the partnership's expenses that produce the nontaxable income. Amending 2012 federal tax return Publicly offered mutual funds. Amending 2012 federal tax return   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. Amending 2012 federal tax return A mutual fund is “publicly offered” if it is: Continuously offered pursuant to a public offering, Regularly traded on an established securities market, or Held by or for at least 500 persons at all times during the tax year. Amending 2012 federal tax return   A publicly offered mutual fund will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing the net amount of dividend income (gross dividends minus investment expenses). Amending 2012 federal tax return This net figure is the amount you report on your return as income. Amending 2012 federal tax return You cannot further deduct investment expenses related to publicly offered mutual funds because they are already included as part of the net income amount. Amending 2012 federal tax return Information returns. Amending 2012 federal tax return   You should receive information returns from pass-through entities. Amending 2012 federal tax return Partnerships and S corporations. Amending 2012 federal tax return   These entities issue Schedule K-1, which lists the items and amounts you must report and identifies the tax return schedules and lines to use. Amending 2012 federal tax return Nonpublicly offered mutual funds. Amending 2012 federal tax return   These funds will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing your share of gross income and investment expenses. Amending 2012 federal tax return You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. Amending 2012 federal tax return Investment Fees and Expenses You can deduct investment fees, custodial fees, trust administration fees, and other expenses you paid for managing your investments that produce taxable income. Amending 2012 federal tax return Legal Expenses You can usually deduct legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax. Amending 2012 federal tax return You can also deduct legal expenses that are: Related to either doing or keeping your job, such as those you paid to defend yourself against criminal charges arising out of your trade or business, For tax advice related to a divorce, if the bill specifies how much is for tax advice and it is determined in a reasonable way, or To collect taxable alimony. Amending 2012 federal tax return You can deduct expenses of resolving tax issues relating to profit or loss from business (Schedule C or C-EZ), rentals or royalties (Schedule E), or farm income and expenses (Schedule F), on the appropriate schedule. Amending 2012 federal tax return You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040). Amending 2012 federal tax return See Tax Preparation Fees , earlier. Amending 2012 federal tax return Loss on Deposits For information on whether, and if so, how, you may deduct a loss on your deposit in a qualified financial institution, see Loss on Deposits in chapter 25. Amending 2012 federal tax return Repayments of Income If you had to repay an amount that you included in income in an earlier year, you may be able to deduct the amount you repaid. Amending 2012 federal tax return If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. Amending 2012 federal tax return If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. Amending 2012 federal tax return Repayments of Social Security Benefits For information on how to deduct your repayments of certain social security benefits, see Repayments More Than Gross Benefits in chapter 11. Amending 2012 federal tax return Safe Deposit Box Rent You can deduct safe deposit box rent if you use the box to store taxable income-producing stocks, bonds, or investment-related papers and documents. Amending 2012 federal tax return You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. Amending 2012 federal tax return Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. Amending 2012 federal tax return These service charges include payments for: Holding shares acquired through a plan, Collecting and reinvesting cash dividends, and Keeping individual records and providing detailed statements of accounts. Amending 2012 federal tax return Trustee's Administrative Fees for IRA Trustee's administrative fees that are billed separately and paid by you in connection with your individual retirement arrangement (IRA) are deductible (if they are ordinary and necessary) as a miscellaneous itemized deduction subject to the 2% limit. Amending 2012 federal tax return For more information about IRAs, see chapter 17. Amending 2012 federal tax return Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. Amending 2012 federal tax return They are not subject to the 2% limit. Amending 2012 federal tax return Report these items on Schedule A (Form 1040), line 28. Amending 2012 federal tax return List of Deductions Each of the following items is discussed in detail after the list (except where indicated). Amending 2012 federal tax return Amortizable premium on taxable bonds. Amending 2012 federal tax return Casualty and theft losses from income- producing property. Amending 2012 federal tax return Federal estate tax on income in respect of a decedent. Amending 2012 federal tax return Gambling losses up to the amount of gambling winnings. Amending 2012 federal tax return Impairment-related work expenses of persons with disabilities. Amending 2012 federal tax return Loss from other activities from Schedule K-1 (Form 1065-B), box 2. Amending 2012 federal tax return Losses from Ponzi-type investment schemes. Amending 2012 federal tax return See Losses from Ponzi-type investment schemes under Theft in chapter 25. Amending 2012 federal tax return Repayments of more than $3,000 under a claim of right. Amending 2012 federal tax return Unrecovered investment in an annuity. Amending 2012 federal tax return Amortizable Premium on Taxable Bonds In general, if the amount you pay for a bond is greater than its stated principal amount, the excess is bond premium. Amending 2012 federal tax return You can elect to amortize the premium on taxable bonds. Amending 2012 federal tax return The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. Amending 2012 federal tax return Part of the premium on some bonds may be a miscellaneous deduction not subject to the 2% limit. Amending 2012 federal tax return For more information, see Amortizable Premium on Taxable Bonds in Publication 529, and Bond Premium Amortization in chapter 3 of Publication 550, Investment Income and Expenses. Amending 2012 federal tax return Casualty and Theft Losses of Income-Producing Property You can deduct a casualty or theft loss as a miscellaneous itemized deduction not subject to the 2% limit if the damaged or stolen property was income-producing property (property held for investment, such as stocks, notes, bonds, gold, silver, vacant lots, and works of art). Amending 2012 federal tax return First, report the loss in Form 4684, Section B. Amending 2012 federal tax return You may also have to include the loss on Form 4797, Sales of Business Property if you are otherwise required to file that form. Amending 2012 federal tax return To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Amending 2012 federal tax return For more information on casualty and theft losses, see chapter 25. Amending 2012 federal tax return Federal Estate Tax on Income in Respect of a Decedent You can deduct the federal estate tax attributable to income in respect of a decedent that you as a beneficiary include in your gross income. Amending 2012 federal tax return Income in respect of the decedent is gross income that the decedent would have received had death not occurred and that was not properly includible in the decedent's final income tax return. Amending 2012 federal tax return See Publication 559 for more information. Amending 2012 federal tax return Gambling Losses Up to the Amount of Gambling Winnings You must report the full amount of your gambling winnings for the year on Form 1040, line 21. Amending 2012 federal tax return You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. Amending 2012 federal tax return You cannot deduct gambling losses that are more than your winnings. Amending 2012 federal tax return You cannot reduce your gambling winnings by your gambling losses and report the difference. Amending 2012 federal tax return You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Amending 2012 federal tax return Therefore, your records should show your winnings separately from your losses. Amending 2012 federal tax return Diary of winnings and losses. Amending 2012 federal tax return You must keep an accurate diary or similar record of your losses and winnings. Amending 2012 federal tax return Your diary should contain at least the following information. Amending 2012 federal tax return The date and type of your specific wager or wagering activity. Amending 2012 federal tax return The name and address or location of the gambling establishment. Amending 2012 federal tax return The names of other persons present with you at the gambling establishment. Amending 2012 federal tax return The amount(s) you won or lost. Amending 2012 federal tax return See Publication 529 for more information. Amending 2012 federal tax return Impairment-Related Work Expenses If you have a physical or mental disability that limits your being employed, or substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, and working, you can deduct your impairment-related work expenses. Amending 2012 federal tax return Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and for other expenses in connection with your place of work that are necessary for you to be able to work. Amending 2012 federal tax return Self-employed. Amending 2012 federal tax return   If you are self-employed, enter your impairment-related work expenses on the appropriate form (Schedule C, C-EZ, E, or F) used to report your business income and expenses. Amending 2012 federal tax return Loss From Other Activities From Schedule K-1 (Form 1065-B), Box 2 If the amount reported in Schedule K-1 (Form 1065-B), box 2, is a loss, report it on Schedule A (Form 1040), line 28. Amending 2012 federal tax return It is not subject to the passive activity limitations. Amending 2012 federal tax return Repayments Under Claim of Right If you had to repay more than $3,000 that you included in your income in an earlier year because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount you repaid or take a credit against your tax. Amending 2012 federal tax return See Repayments in chapter 12 for more information. Amending 2012 federal tax return Unrecovered Investment in Annuity A retiree who contributed to the cost of an annuity can exclude from income a part of each payment received as a tax-free return of the retiree's investment. Amending 2012 federal tax return If the retiree dies before the entire investment is recovered tax free, any unrecovered investment can be deducted on the retiree's final income tax return. Amending 2012 federal tax return See chapter 10 for more information about the tax treatment of pensions and annuities. Amending 2012 federal tax return Nondeductible Expenses Examples of nondeductible expenses are listed next. Amending 2012 federal tax return The list is followed by discussions of additional nondeductible expenses. Amending 2012 federal tax return List of Nondeductible Expenses Broker's commissions that you paid in connection with your IRA or other investment property. Amending 2012 federal tax return Burial or funeral expenses, including the cost of a cemetery lot. Amending 2012 federal tax return Capital expenses. Amending 2012 federal tax return Fees and licenses, such as car licenses, marriage licenses, and dog tags. Amending 2012 federal tax return Hobby losses, but see Hobby Expenses , earlier. Amending 2012 federal tax return Home repairs, insurance, and rent. Amending 2012 federal tax return Illegal bribes and kickbacks. Amending 2012 federal tax return See Bribes and kickbacks in chapter 11 of Publication 535. Amending 2012 federal tax return Losses from the sale of your home, furniture, personal car, etc. Amending 2012 federal tax return Personal disability insurance premiums. Amending 2012 federal tax return Personal, living, or family expenses. Amending 2012 federal tax return The value of wages never received or lost vacation time. Amending 2012 federal tax return Adoption Expenses You cannot deduct the expenses of adopting a child, but you may be able to take a credit for those expenses. Amending 2012 federal tax return See chapter 37. Amending 2012 federal tax return Campaign Expenses You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. Amending 2012 federal tax return These include qualification and registration fees for primary elections. Amending 2012 federal tax return Legal fees. Amending 2012 federal tax return   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. Amending 2012 federal tax return Check-Writing Fees on Personal Account If you have a personal checking account, you cannot deduct fees charged by the bank for the privilege of writing checks, even if the account pays interest. Amending 2012 federal tax return Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. Amending 2012 federal tax return This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. Amending 2012 federal tax return You cannot deduct dues paid to an organization if one of its main purposes is to: Conduct entertainment activities for members or their guests, or Provide members or their guests with access to entertainment facilities. Amending 2012 federal tax return Dues paid to airline, hotel, and luncheon clubs are not deductible. Amending 2012 federal tax return Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). Amending 2012 federal tax return If you haul tools, instruments, or other items, in your car to and from work, you can deduct only the additional cost of hauling the items such as the rent on a trailer to carry the items. Amending 2012 federal tax return Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. Amending 2012 federal tax return This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). Amending 2012 federal tax return Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. Amending 2012 federal tax return Health Spa Expenses You cannot deduct health spa expenses, even if there is a job requirement to stay in excellent physical condition, such as might be required of a law enforcement officer. Amending 2012 federal tax return Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. Amending 2012 federal tax return However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. Amending 2012 federal tax return See Home Office under Unreimbursed Employee Expenses, earlier, and Security System under Deducting Expenses in Publication 587. Amending 2012 federal tax return Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. Amending 2012 federal tax return Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. Amending 2012 federal tax return You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. Amending 2012 federal tax return See chapter 18 for information on alimony. Amending 2012 federal tax return Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. Amending 2012 federal tax return These include expenses to: Influence legislation, Participate or intervene in any political campaign for, or against, any candidate for public office, Attempt to influence the general public, or segments of the public, about elections, legislative matters, or referendums, or Communicate directly with covered executive branch officials in any attempt to influence the official actions or positions of those officials. Amending 2012 federal tax return Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. Amending 2012 federal tax return Dues used for lobbying. Amending 2012 federal tax return   If a tax-exempt organization notifies you that part of the dues or other amounts you pay to the organization are used to pay nondeductible lobbying expenses, you cannot deduct that part. Amending 2012 federal tax return See Lobbying Expenses in Publication 529 for information on exceptions. Amending 2012 federal tax return Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. Amending 2012 federal tax return However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Amending 2012 federal tax return See chapter 25. Amending 2012 federal tax return Example. Amending 2012 federal tax return A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Amending 2012 federal tax return The diamond falls from the ring and is never found. Amending 2012 federal tax return The loss of the diamond is a casualty. Amending 2012 federal tax return Lunches with Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. Amending 2012 federal tax return See chapter 26 for information on deductible expenses while traveling away from home. Amending 2012 federal tax return Meals While Working Late You cannot deduct the cost of meals while working late. Amending 2012 federal tax return However, you may be able to claim a deduction if the cost of meals is a deductible entertainment expense, or if you are traveling away from home. Amending 2012 federal tax return See chapter 26 for information on deductible entertainment expenses and expenses while traveling away from home. Amending 2012 federal tax return Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. Amending 2012 federal tax return Custody of children. Amending 2012 federal tax return Breach of promise to marry suit. Amending 2012 federal tax return Civil or criminal charges resulting from a personal relationship. Amending 2012 federal tax return Damages for personal injury, except for certain unlawful discrimination and whistleblower claims. Amending 2012 federal tax return Preparation of a title (or defense or perfection of a title). Amending 2012 federal tax return Preparation of a will. Amending 2012 federal tax return Property claims or property settlement in a divorce. Amending 2012 federal tax return You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. Amending 2012 federal tax return Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Amending 2012 federal tax return Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. Amending 2012 federal tax return Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. Amending 2012 federal tax return Accounting certificate fees paid for the initial right to practice accounting. Amending 2012 federal tax return Bar exam fees and incidental expenses in securing initial admission to the bar. Amending 2012 federal tax return Medical and dental license fees paid to get initial licensing. Amending 2012 federal tax return Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. Amending 2012 federal tax return Relief Fund Contributions You cannot deduct contributions paid to a private plan that pays benefits to any covered employee who cannot work because of any injury or illness not related to the job. Amending 2012 federal tax return Residential Telephone Service You cannot deduct any charge (including taxes) for basic local telephone service for the first telephone line to your residence, even if it is used in a trade or business. Amending 2012 federal tax return Stockholders' Meetings You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you own stock but have no other interest. Amending 2012 federal tax return You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. Amending 2012 federal tax return Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. Amending 2012 federal tax return You cannot deduct interest on a debt incurred or continued to buy or carry  tax-exempt securities. Amending 2012 federal tax return If you have expenses to produce both taxable and tax-exempt income, but you cannot identify the expenses that produce each type of income, you must divide the expenses based on the amount of each type of income to determine the amount that you can deduct. Amending 2012 federal tax return Example. Amending 2012 federal tax return During the year, you received taxable interest of $4,800 and tax-exempt interest of $1,200. Amending 2012 federal tax return In earning this income, you had total expenses of $500 during the year. Amending 2012 federal tax return You cannot identify the amount of each expense item that is for each income item. Amending 2012 federal tax return Therefore, 80% ($4,800/$6,000) of the expense is for the taxable interest and 20% ($1,200/$6,000) is for the tax-exempt interest. Amending 2012 federal tax return You can deduct, subject to the 2% limit, expenses of $400 (80% of $500). Amending 2012 federal tax return Travel Expenses for Another Individual You generally cannot deduct travel expenses you pay or incur for a spouse, dependent, or other individual who accompanies you (or your employee) on business or personal travel unless the spouse, dependent, or other individual is an employee of the taxpayer, the travel is for a bona fide business purpose, and such expenses would otherwise be deductible by the spouse, dependent, or other individual. Amending 2012 federal tax return See chapter 26 for more information on deductible travel expenses. Amending 2012 federal tax return Voluntary Unemployment Benefit Fund Contributions You cannot deduct voluntary unemployment benefit fund contributions you make to a union fund or a private fund. Amending 2012 federal tax return However, you can deduct contributions as taxes if state law requires you to make them to a state unemployment fund that covers you for the loss of wages from unemployment caused by business conditions. Amending 2012 federal tax return Wristwatches You cannot deduct the cost of a wristwatch, even if there is a job requirement that you know the correct time to properly perform your duties. Amending 2012 federal tax return Prev  Up  Next   Home   More Online Publications