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Federal Income Tax Rates 2012

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Federal Income Tax Rates 2012

Federal income tax rates 2012 Index A Additional Medicare Tax, Reminders, Additional Medicare Tax withholding. Federal income tax rates 2012 Adjustments, Reporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Agricultural labor, Deposits. Federal income tax rates 2012 Aliens, nonresidents, Deposits. Federal income tax rates 2012 Assistance (see Tax help) C Calendar, Calendar Comments on publication, Comments and suggestions. Federal income tax rates 2012 Common-law employee, Employee status under common law. Federal income tax rates 2012 Corrected wage and tax statement, Correcting Forms W-2AS, W-2CM, W-2GU, W-2VI, and Form W-3SS. Federal income tax rates 2012 Crew leaders, Farm Crew Leaders Current period adjustments, Current Period Adjustments D Deposit How to deposit, How To Deposit Penalties, Deposit Penalties Period, Deposit Period Requirements, 8. Federal income tax rates 2012 Depositing Taxes Rules $100,000 next-day deposit, $100,000 Next-Day Deposit Rule Accuracy of deposits, Accuracy of Deposits Rule Schedules Monthly, Monthly Deposit Schedule Semiweekly, Semiweekly Deposit Schedule When to deposit, When To Deposit E Electronic deposits, Electronic deposit requirement. Federal income tax rates 2012 Electronic filing and payment, Reminders Employee, 2. Federal income tax rates 2012 Who Are Employees? Employer identification number (EIN), 1. Federal income tax rates 2012 Employer Identification Number (EIN) F Family employees, Deposits. Federal income tax rates 2012 Farm crew leaders, Farm Crew Leaders Farmworkers, 6. Federal income tax rates 2012 Social Security and Medicare Taxes for Farmworkers, Employers of farmworkers. Federal income tax rates 2012 Federal employees, Deposits. Federal income tax rates 2012 Fishing, Deposits. Federal income tax rates 2012 Form, Calendar, Lookback period for employers of nonfarm workers. Federal income tax rates 2012 4070, 5. Federal income tax rates 2012 Tips 4070A, 5. Federal income tax rates 2012 Tips 8274, Deposits. Federal income tax rates 2012 940, Calendar 941-SS, Calendar, Current Period Adjustments 941-X, Adjustments to lookback period taxes. Federal income tax rates 2012 943, Calendar 943-X, Adjustments to lookback period taxes. Federal income tax rates 2012 944-X, Adjustments to lookback period taxes. Federal income tax rates 2012 Schedule H (Form 1040), Household employers reporting social security and Medicare taxes. Federal income tax rates 2012 SS-4, 1. Federal income tax rates 2012 Employer Identification Number (EIN) SS-5, Reminders, Employee's social security card. Federal income tax rates 2012 SS-8, IRS help. Federal income tax rates 2012 W-2c, Employee's social security card. Federal income tax rates 2012 , Correcting Forms W-2AS, W-2CM, W-2GU, W-2VI, and Form W-3SS. Federal income tax rates 2012 Fringe benefits, Fringe Benefits, Deposits. Federal income tax rates 2012 FUTA tax, 11. Federal income tax rates 2012 Federal Unemployment (FUTA) Tax—U. Federal income tax rates 2012 S. Federal income tax rates 2012 Virgin Islands Employers Only G Government employees, nonfederal, Deposits. Federal income tax rates 2012 Group-term life insurance, Deposits. Federal income tax rates 2012 H Help (see Tax help) Hiring new employees, Reminders Homeworkers, Deposits. Federal income tax rates 2012 Hospital interns, Deposits. Federal income tax rates 2012 Household employers, Household employers reporting social security and Medicare taxes. Federal income tax rates 2012 Household workers, Household employers reporting social security and Medicare taxes. Federal income tax rates 2012 , Deposits. Federal income tax rates 2012 How to deposit, How To Deposit I Insurance agents, Deposits. Federal income tax rates 2012 IRS help (employee v. Federal income tax rates 2012 subcontractor), IRS help. Federal income tax rates 2012 L Lookback period Farmworkers, Lookback period for employers of farmworkers. Federal income tax rates 2012 Nonfarm workers, Lookback period for employers of nonfarm workers. Federal income tax rates 2012 M Meals and lodging, Deposits. Federal income tax rates 2012 Ministers, Deposits. Federal income tax rates 2012 Monthly deposit schedule, Monthly Deposit Schedule Moving expenses, Deposits. Federal income tax rates 2012 N Newspaper delivery, Deposits. Federal income tax rates 2012 Noncash payments, Deposits. Federal income tax rates 2012 Nonprofit organizations, Deposits. Federal income tax rates 2012 P Partners, Deposits. Federal income tax rates 2012 Penalties, Deposit Penalties Pension plans, Deposits. Federal income tax rates 2012 Prior period adjustments, Prior Period Adjustments Private delivery services, Reminders Publications (see Tax help) R Recordkeeping, Reminders Religious orders, Deposits. Federal income tax rates 2012 Retirement and pension plans, Deposits. Federal income tax rates 2012 S Salespersons, Deposits. Federal income tax rates 2012 Scholarships and fellowships, Deposits. Federal income tax rates 2012 Semiweekly deposit schedule, Semiweekly Deposit Schedule Severance pay, Deposits. Federal income tax rates 2012 Sick pay, Sick pay. Federal income tax rates 2012 , Sick pay payments. Federal income tax rates 2012 , Deposits. Federal income tax rates 2012 Social security number (SSN), 3. Federal income tax rates 2012 Employee's Social Security Number (SSN) Statutory employee, Statutory employees. Federal income tax rates 2012 Statutory nonemployee, Statutory nonemployees. Federal income tax rates 2012 Students, Deposits. Federal income tax rates 2012 Suggestions for publication, Comments and suggestions. Federal income tax rates 2012 Supplemental unemployment compensation benefits, Deposits. Federal income tax rates 2012 T Tax help, How To Get Tax Help Tax Help, Tax help. Federal income tax rates 2012 Taxes paid by employer, Employee's portion of taxes paid by employer. Federal income tax rates 2012 Tips, 5. Federal income tax rates 2012 Tips, Deposits. Federal income tax rates 2012 Travel and business expenses, Travel and business expenses. Federal income tax rates 2012 Trust fund recovery penalty, Trust fund recovery penalty. Federal income tax rates 2012 W Wage and Tax Statement, 10. Federal income tax rates 2012 Wage and Tax Statements Prev  Up     Home   More Online Publications

Topic 515 - Casualty, Disaster, and Theft Losses (Including Federally Declared Disaster Areas)

Generally, you may deduct casualty and theft losses relating to your home, household items and vehicles on your federal income tax return. You may not deduct casualty and theft losses covered by insurance unless you file a timely claim for reimbursement, and you reduce the loss by the amount of any reimbursement or expected reimbursement.

A casualty loss can result from the damage, destruction or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption. A casualty does not include normal wear and tear or progressive deterioration.

A theft is the taking and removing of money or property with the intent to deprive the owner of it. The taking must be illegal under the law of the state where it occurred and it must have been done with criminal intent.

If your property is personal-use property or is not completely destroyed, the amount of your casualty loss is the lesser of:

  • The adjusted basis of your property, or
  • The decrease in fair market value of your property as a result of the casualty

The amount of your theft loss is generally the adjusted basis of your property because the fair market value of your property immediately after the theft is considered to be zero.

If your property is business or income-producing property, such as rental property, and is completely destroyed, then the amount of your loss is your adjusted basis.

The loss, regardless of whether it is a casualty or theft loss, must be reduced by any salvage value and by any insurance or other reimbursement you receive or expect to receive. The adjusted basis of your property is usually your cost, increased or decreased by certain events such as improvements or depreciation. For more information about the basis of property, refer to Topic 703, Publication 547, Casualties, Disasters, and Thefts, and Publication 551, Basis of Assets. You may determine the decrease in fair market value by appraisal, or if certain conditions are met, by the cost of repairing the property. For more information, refer to Publication 547.

Individuals are required to claim their casualty and theft losses as an itemized deduction on Form 1040, Schedule A (PDF) (or Form 1040NR, Schedule A (PDF), if you are a nonresident alien). For property held by you for personal use, once you have subtracted any salvage value and any insurance or other reimbursement, you must subtract $100 from each casualty or theft event that occurred during the year. Then add up all those amounts and subtract 10% of your adjusted gross income from that total to calculate your allowable casualty and theft losses for the year.

Casualty and theft losses are reported on Form 4684 (PDF), Casualties and Thefts. Section A is used for personal-use property, and Section B is used for business or income-producing property. If personal-use property was damaged, destroyed or stolen, you may wish to refer to Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property). For losses involving business-use property, refer to Publication 584-B (PDF), Business Casualty, Disaster, and Theft Loss Workbook.

Casualty losses are generally deductible in the year the casualty occurred. However, if you have a casualty loss from a federally declared disaster that occurred in an area warranting public or individual assistance (or both), you can choose to treat the loss as having occurred in the year immediately preceding the tax year in which the disaster happened, and you can deduct the loss on your return or amended return for that preceding tax year. Review Disaster Assistance and Emergency Relief for Individuals and Businesses on IRS.gov, for information regarding timeframes and additional information to your specific qualifying event.

Theft losses are generally deductible in the year you discover the property was stolen unless you have a reasonable prospect of recovery through a claim for reimbursement. In that case, no deduction is available until the taxable year in which it can be determined with reasonable certainty whether or not such reimbursement will be received.

Special rules may apply to theft losses from Ponzi-type investment schemes. For more information, see the Form 4684 (PDF) and the Form 4684 Instructions (PDF), Casualties and Thefts. Additionally, review Help for Victims of Ponzi Investment Schemes on IRS.gov.

If your loss deduction is more than your income, you may have a net operating loss. You do not have to be in business to have a net operating loss from a casualty. For more information, refer to Publication 536, Net Operating Losses for Individuals, Estates, and Trusts.

Page Last Reviewed or Updated: December 12, 2013

The Federal Income Tax Rates 2012

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