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Filing Previous Years Taxes

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Filing Previous Years Taxes

Filing previous years taxes 2. Filing previous years taxes   Taxable and Nontaxable Income Table of Contents Compensation for Services Retirement Plan DistributionsIndividual Retirement Arrangements (IRAs) Pensions and Annuities Social Security and Equivalent Railroad Retirement BenefitsAre Any of Your Benefits Taxable? How Much Is Taxable? How To Report Your Benefits Lump-Sum Election Repayments More Than Gross Benefits Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Life Insurance ProceedsInstallments for life. Filing previous years taxes Surviving spouse. Filing previous years taxes Endowment Contract Proceeds Accelerated Death Benefits Sale of HomeMaximum Amount of Exclusion Ownership and Use Tests Married Persons Business Use or Rental of Home Reporting the Sale Reverse Mortgages Other ItemsWelfare benefits. Filing previous years taxes Payments from a state fund for victims of crime. Filing previous years taxes Home Affordable Modification Program (HAMP). Filing previous years taxes Mortgage assistance payments. Filing previous years taxes Payments to reduce cost of winter energy use. Filing previous years taxes Nutrition Program for the Elderly. Filing previous years taxes Reemployment Trade Adjustment Assistance (RTAA). Filing previous years taxes Generally, income is taxable unless it is specifically exempt (not taxed) by law. Filing previous years taxes Your taxable income may include compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income, gain from sales or exchanges of property, and business income of all kinds. Filing previous years taxes Under special provisions of the law, certain items are partially or fully exempt from tax. Filing previous years taxes Provisions that are of special interest to older taxpayers are discussed in this chapter. Filing previous years taxes Compensation for Services Generally, you must include in gross income everything you receive in payment for personal services. Filing previous years taxes In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. Filing previous years taxes You need not receive the compensation in cash for it to be taxable. Filing previous years taxes Payments you receive in the form of goods or services generally must be included in gross income at their fair market value. Filing previous years taxes Volunteer work. Filing previous years taxes   Do not include in your gross income amounts you receive for supportive services or reimbursements for out-of-pocket expenses under any of the following volunteer programs. Filing previous years taxes Retired Senior Volunteer Program (RSVP). Filing previous years taxes Foster Grandparent Program. Filing previous years taxes Senior Companion Program. Filing previous years taxes Service Corps of Retired Executives (SCORE). Filing previous years taxes Unemployment compensation. Filing previous years taxes   You must include in income all unemployment compensation you or your spouse (if married filing jointly) received. Filing previous years taxes More information. Filing previous years taxes   See Publication 525, Taxable and Nontaxable Income, for more detailed information on specific types of income. Filing previous years taxes Retirement Plan Distributions This section summarizes the tax treatment of amounts you receive from traditional individual retirement arrangements (IRA), employee pensions or annuities, and disability pensions or annuities. Filing previous years taxes A traditional IRA is any IRA that is not a Roth or SIMPLE IRA. Filing previous years taxes A Roth IRA is an individual retirement plan that can be either an account or an annuity and features nondeductible contributions and tax-free distributions. Filing previous years taxes A SIMPLE IRA is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. Filing previous years taxes More detailed information can be found in Publication 590, Individual Retirement Arrangements (IRAs), and Publication 575, Pension and Annuity Income. Filing previous years taxes Individual Retirement Arrangements (IRAs) In general, distributions from a traditional IRA are taxable in the year you receive them. Filing previous years taxes Exceptions to the general rule are rollovers, tax-free withdrawals of contributions, and the return of nondeductible contributions. Filing previous years taxes These are discussed in Publication 590. Filing previous years taxes If you made nondeductible contributions to a traditional IRA, you must file Form 8606, Nondeductible IRAs. Filing previous years taxes If you do not file Form 8606 with your return, you may have to pay a $50 penalty. Filing previous years taxes Also, when you receive distributions from your traditional IRA, the amounts will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Filing previous years taxes Early distributions. Filing previous years taxes   Generally, early distributions are amounts distributed from your traditional IRA account or annuity before you are age 59½, or amounts you receive when you cash in retirement bonds before you are age  59½. Filing previous years taxes You must include early distributions of taxable amounts in your gross income. Filing previous years taxes These taxable amounts are also subject to an additional 10% tax unless the distribution qualifies for an exception. Filing previous years taxes For purposes of the additional 10% tax, an IRA is a qualified retirement plan. Filing previous years taxes For more information about this tax, see Tax on Early Distributions under Pensions and Annuities, later. Filing previous years taxes After age 59½ and before age 70½. Filing previous years taxes   After you reach age 59½, you can receive distributions from your traditional IRA without having to pay the 10% additional tax. Filing previous years taxes Even though you can receive distributions after you reach age 59½, distributions are not required until you reach  age 70½. Filing previous years taxes Required distributions. Filing previous years taxes   If you are the owner of a traditional IRA, you generally must receive the entire balance in your IRA or start receiving periodic distributions from your IRA by April 1 of the year following the year in which you reach age 70½. Filing previous years taxes See When Must You Withdraw Assets? (Required Minimum Distributions) in Publication 590. Filing previous years taxes If distributions from your traditional IRA(s) are less than the required minimum distribution for the year, you may have to pay a 50% excise tax for that year on the amount not distributed as required. Filing previous years taxes For purposes of the 50% excise tax, an IRA is a qualified retirement plan. Filing previous years taxes For more information about this tax, see Tax on Excess Accumulation under Pensions and Annuities, later. Filing previous years taxes See also Excess Accumulations (Insufficient Distributions) in Publication 590. Filing previous years taxes Pensions and Annuities Generally, if you did not pay any part of the cost of your employee pension or annuity, and your employer did not withhold part of the cost of the contract from your pay while you worked, the amounts you receive each year are fully taxable. Filing previous years taxes However, see Insurance Premiums for Retired Public Safety Officers , later. Filing previous years taxes If you paid part of the cost of your pension or annuity plan (see Cost , later), you can exclude part of each annuity payment from income as a recovery of your cost (investment in the contract). Filing previous years taxes This tax-free part of the payment is figured when your annuity starts and remains the same each year, even if the amount of the payment changes. Filing previous years taxes The rest of each payment is taxable. Filing previous years taxes However, see Insurance Premiums for Retired Public Safety Officers , later. Filing previous years taxes You figure the tax-free part of the payment using one of the following methods. Filing previous years taxes Simplified Method. Filing previous years taxes You generally must use this method if your annuity is paid under a qualified plan (a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity plan or contract). Filing previous years taxes You cannot use this method if your annuity is paid under a nonqualified plan. Filing previous years taxes General Rule. Filing previous years taxes You must use this method if your annuity is paid under a nonqualified plan. Filing previous years taxes You generally cannot use this method if your annuity is paid under a qualified plan. Filing previous years taxes Contact your employer or plan administrator to find out if your pension or annuity is paid under a qualified or nonqualified plan. Filing previous years taxes You determine which method to use when you first begin receiving your annuity, and you continue using it each year that you recover part of your cost. Filing previous years taxes Exclusion limit. Filing previous years taxes   If your annuity starting date is after 1986, the total amount of annuity income you can exclude over the years as a recovery of the cost cannot exceed your total cost. Filing previous years taxes Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. Filing previous years taxes This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. Filing previous years taxes   If you contributed to your pension or annuity and your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. Filing previous years taxes If you chose a joint and survivor annuity, your survivor can continue to take the survivor's exclusion figured as of the annuity starting date. Filing previous years taxes The total exclusion may be more than your cost. Filing previous years taxes Cost. Filing previous years taxes   Before you can figure how much, if any, of your pension or annuity benefits are taxable, you must determine your cost in the plan (your investment in the contract). Filing previous years taxes Your total cost in the plan includes everything that you paid. Filing previous years taxes It also includes amounts your employer contributed that were taxable to you when paid. Filing previous years taxes However, see Foreign employment contributions , later. Filing previous years taxes   From this total cost, subtract any refunded premiums, rebates, dividends, unrepaid loans, or other tax-free amounts you received by the later of the annuity starting date or the date on which you received your first payment. Filing previous years taxes   The annuity starting date is the later of the first day of the first period for which you received a payment from the plan or the date on which the plan's obligations became fixed. Filing previous years taxes    The amount of your contributions to the plan may be shown in box 9b of any Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Filing previous years taxes , that you receive. Filing previous years taxes Foreign employment contributions. Filing previous years taxes   If you worked abroad, certain amounts your employer paid into your retirement plan that were not includible in your gross income may be considered part of your cost. Filing previous years taxes For details, see Foreign employment contributions in Publication 575. Filing previous years taxes Withholding. Filing previous years taxes   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable part of amounts paid to you. Filing previous years taxes However, you can choose not to have tax withheld on the payments you receive, unless they are eligible rollover distributions. Filing previous years taxes (These are distributions that are eligible for rollover treatment but are not paid directly to another qualified retirement plan or to a traditional IRA. Filing previous years taxes ) See Withholding Tax and Estimated Tax and Rollovers in Publication 575 for more information. Filing previous years taxes   For payments other than eligible rollover distributions, you can tell the payer how much to withhold by filing a Form W-4P, Withholding Certificate for Pension or Annuity Payments. Filing previous years taxes Simplified Method. Filing previous years taxes   Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. Filing previous years taxes For an annuity that is payable over the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. Filing previous years taxes For any other annuity, this number is the number of monthly annuity payments under the contract. Filing previous years taxes Who must use the Simplified Method. Filing previous years taxes   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you receive your pension or annuity payments from a qualified plan or annuity, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments (defined next). Filing previous years taxes   In addition, if your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use the Simplified Method for payments from a qualified plan, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments. Filing previous years taxes If you chose to use the Simplified Method, you must continue to use it each year that you recover part of your cost. Filing previous years taxes Guaranteed payments. Filing previous years taxes   Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of your investment) is payable even if you and any survivor annuitant do not live to receive the minimum. Filing previous years taxes If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5 years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments. Filing previous years taxes Who cannot use the Simplified Method. Filing previous years taxes   You cannot use the Simplified Method and must use the General Rule if you receive pension or annuity payments from: A nonqualified plan, such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan, or A qualified plan if you are age 75 or older on your annuity starting date and you are entitled to at least 5 years of guaranteed payments (defined above). Filing previous years taxes   In addition, you had to use the General Rule for either circumstance described above if your annuity starting date is after July 1, 1986, and before November 19, 1996. Filing previous years taxes If you did not have to use the General Rule, you could have chosen to use it. Filing previous years taxes You also had to use the General Rule for payments from a qualified plan if your annuity starting date is before July 2, 1986, and you did not qualify to use the Three-Year Rule. Filing previous years taxes   If you had to use the General Rule (or chose to use it), you must continue to use it each year that you recover your cost. Filing previous years taxes   Unless your annuity starting date was before 1987, once you have recovered all of your non-taxable investment, all of each remaining payment you receive is fully taxable. Filing previous years taxes Once your remaining payments are fully taxable, there is no longer a concern with the General Rule or Simplified Method. Filing previous years taxes   Complete information on the General Rule, including the actuarial tables you need, is contained in Publication 939, General Rule for Pensions and Annuities. Filing previous years taxes How to use the Simplified Method. Filing previous years taxes   Complete the Simplified Method Worksheet in the Form 1040, Form 1040A, or Form 1040NR instructions or in Publication 575 to figure your taxable annuity for 2013. Filing previous years taxes Be sure to keep the completed worksheet; it will help you figure your taxable annuity next year. Filing previous years taxes   To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for your annuity. Filing previous years taxes How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. Filing previous years taxes For this purpose, treat an annuity that is payable over the life of an annuitant as payable for that annuitant's life even if the annuity has a fixed-period feature or also provides a temporary annuity payable to the annuitant's child under age 25. Filing previous years taxes    You do not need to complete line 3 of the worksheet or make the computation on line 4 if you received annuity payments last year and used last year's worksheet to figure your taxable annuity. Filing previous years taxes Instead, enter the amount from line 4 of last year's worksheet on line 4 of this year's worksheet. Filing previous years taxes Single-life annuity. Filing previous years taxes   If your annuity is payable for your life alone, use Table 1 at the bottom of the worksheet to determine the total number of expected monthly payments. Filing previous years taxes Enter on line 3 the number shown for your age on your annuity starting date. Filing previous years taxes This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Filing previous years taxes Multiple-lives annuity. Filing previous years taxes   If your annuity is payable for the lives of more than one annuitant, use Table 2 at the bottom of the worksheet to determine the total number of expected monthly payments. Filing previous years taxes Enter on line 3 the number shown for the annuitants' combined ages on the annuity starting date. Filing previous years taxes For an annuity payable to you as the primary annuitant and to more than one survivor annuitant, combine your age and the age of the youngest survivor annuitant. Filing previous years taxes For an annuity that has no primary annuitant and is payable to you and others as survivor annuitants, combine the ages of the oldest and youngest annuitants. Filing previous years taxes Do not treat as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death. Filing previous years taxes   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. Filing previous years taxes Instead, you must use Table 1 at the bottom of the worksheet and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. Filing previous years taxes This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Filing previous years taxes Fixed-period annuities. Filing previous years taxes   If your annuity does not depend in whole or in part on anyone's life expectancy, the total number of expected monthly payments to enter on line 3 of the worksheet is the number of monthly annuity payments under the contract. Filing previous years taxes Line 6. Filing previous years taxes   The amount on line 6 should include all amounts that could have been recovered in prior years. Filing previous years taxes If you did not recover an amount in a prior year, you may be able to amend your returns for the affected years. Filing previous years taxes    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity in later years. Filing previous years taxes Example. Filing previous years taxes Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. Filing previous years taxes Bill's annuity starting date is January 1, 2013. Filing previous years taxes The benefits are to be paid over the joint lives of Bill and his wife, Kathy, age 65. Filing previous years taxes Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. Filing previous years taxes Bill is to receive a retirement benefit of $1,200 a month, and Kathy is to receive a monthly survivor benefit of $600 upon Bill's death. Filing previous years taxes Bill must use the Simplified Method to figure his taxable annuity because his payments are from a qualified plan and he is under age 75. Filing previous years taxes See the illustrated Worksheet 2-A, Simplified Method Worksheet, later. Filing previous years taxes You can find a blank version of this worksheet in Publication 575. Filing previous years taxes (The references in the illustrated worksheet are to sections in Publication 575). Filing previous years taxes His annuity is payable over the lives of more than one annuitant, so Bill uses his and Kathy's combined ages, 130 (65 + 65), and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet and finds the line 3 amount to be 310. Filing previous years taxes Bill's tax-free monthly amount is $100 ($31,000 ÷ 310 as shown on line 4 of the worksheet). Filing previous years taxes Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. Filing previous years taxes The full amount of any annuity payments received after 310 payments are paid must generally be included in gross income. Filing previous years taxes If Bill and Kathy die before 310 payments are made, a miscellaneous itemized deduction will be allowed for the unrecovered cost on the final income tax return of the last to die. Filing previous years taxes This deduction is not subject to the 2%-of-adjusted-gross-income limit. Filing previous years taxes Worksheet 2-A. Filing previous years taxes Simplified Method Worksheet—Illustrated 1. Filing previous years taxes Enter the total pension or annuity payments received this year. Filing previous years taxes Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Filing previous years taxes $ 14,400 2. Filing previous years taxes Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion* See Cost (Investment in the Contract), earlier 2. Filing previous years taxes 31,000   Note. Filing previous years taxes If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Filing previous years taxes Otherwise, go to line 3. Filing previous years taxes     3. Filing previous years taxes Enter the appropriate number from Table 1 below. Filing previous years taxes But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below 3. Filing previous years taxes 310 4. Filing previous years taxes Divide line 2 by the number on line 3 4. Filing previous years taxes 100 5. Filing previous years taxes Multiply line 4 by the number of months for which this year's payments were made. Filing previous years taxes If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Filing previous years taxes Otherwise, go to line 6 5. Filing previous years taxes 1,200 6. Filing previous years taxes Enter any amount previously recovered tax free in years after 1986. Filing previous years taxes This is the amount shown on line 10 of your worksheet for last year 6. Filing previous years taxes 0 7. Filing previous years taxes Subtract line 6 from line 2 7. Filing previous years taxes 31,000 8. Filing previous years taxes Enter the smaller of line 5 or line 7 8. Filing previous years taxes 1,200 9. Filing previous years taxes Taxable amount for year. Filing previous years taxes Subtract line 8 from line 1. Filing previous years taxes Enter the result, but not less than zero. Filing previous years taxes Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Filing previous years taxes Note. Filing previous years taxes If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. Filing previous years taxes If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers, earlier, before entering an amount on your tax return. Filing previous years taxes 9. Filing previous years taxes $ 13,200 10. Filing previous years taxes Was your annuity starting date before 1987? □ Yes. Filing previous years taxes STOP. Filing previous years taxes Do not complete the rest of this worksheet. Filing previous years taxes  ☑ No. Filing previous years taxes Add lines 6 and 8. Filing previous years taxes This is the amount you have recovered tax free through 2013. Filing previous years taxes You will need this number if you need to fill out this worksheet next year. Filing previous years taxes 10. Filing previous years taxes 1,200 11. Filing previous years taxes Balance of cost to be recovered. Filing previous years taxes Subtract line 10 from line 2. Filing previous years taxes If zero, you will not have to complete this worksheet next year. Filing previous years taxes The payments you receive next year will generally be fully taxable 11. Filing previous years taxes $ 29,800 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. Filing previous years taxes   Table 1 for Line 3 Above       AND your annuity starting date was—   IF your age on your annuity starting date was . Filing previous years taxes . Filing previous years taxes . Filing previous years taxes   BEFORE November 19, 1996, enter on line 3 . Filing previous years taxes . Filing previous years taxes . Filing previous years taxes AFTER November 18, 1996, enter on line 3 . Filing previous years taxes . Filing previous years taxes . Filing previous years taxes   55 or under 300 360   56-60 260 310   61-65 240 260   66-70 170 210   71 or over 120 160 Table 2 for Line 3 Above   IF the annuitants' combined ages on your annuity starting date were . Filing previous years taxes . Filing previous years taxes . Filing previous years taxes   THEN enter on line 3 . Filing previous years taxes . Filing previous years taxes . Filing previous years taxes         110 or under   410         111-120   360         121-130   310         131-140   260         141 or over   210       Survivors of retirees. Filing previous years taxes   Benefits paid to you as a survivor under a joint and survivor annuity must be included in your gross income in the same way the retiree would have included them in gross income. Filing previous years taxes   If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule, include the total received in your income. Filing previous years taxes The retiree's cost has already been recovered tax free. Filing previous years taxes   If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage the retiree used to your initial payment called for in the contract. Filing previous years taxes The resulting tax-free amount will then remain fixed. Filing previous years taxes Any increases in the survivor annuity are fully taxable. Filing previous years taxes   If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. Filing previous years taxes See Simplified Method , earlier. Filing previous years taxes How to report. Filing previous years taxes   If you file Form 1040, report your total annuity on line 16a, and the taxable part on line 16b. Filing previous years taxes If your pension or annuity is fully taxable, enter it on line 16b. Filing previous years taxes Do not make an entry on line 16a. Filing previous years taxes   If you file Form 1040A, report your total annuity on line 12a, and the taxable part on line 12b. Filing previous years taxes If your pension or annuity is fully taxable, enter it on line 12b. Filing previous years taxes Do not make an entry on line 12a. Filing previous years taxes   If you file Form 1040NR, report your total annuity on line 17a, and the taxable part on line 17b. Filing previous years taxes If your pension or annuity is fully taxable, enter it on line 17b. Filing previous years taxes Do not make an entry on line 17a. Filing previous years taxes Example. Filing previous years taxes You are a Form 1040 filer and you received monthly payments totaling $1,200 (12 months x $100) during 2013 from a pension plan that was completely financed by your employer. Filing previous years taxes You had paid no tax on the payments that your employer made to the plan, and the payments were not used to pay for accident, health, or long-term care insurance premiums (as discussed later under Insurance Premiums for Retired Public Safety Officers ). Filing previous years taxes The entire $1,200 is taxable. Filing previous years taxes You include $1,200 only on Form 1040, line 16b. Filing previous years taxes Joint return. Filing previous years taxes   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on line 16a of Form 1040, line 12a of Form 1040A, or line 17a of Form 1040NR. Filing previous years taxes Report the total of the taxable parts on line 16b of Form 1040, line 12b of Form 1040A, or line 17b of Form 1040NR. Filing previous years taxes Form 1099-R. Filing previous years taxes   You should receive a Form 1099-R for your pension or annuity. Filing previous years taxes Form 1099-R shows your pension or annuity for the year and any income tax withheld. Filing previous years taxes You should receive a Form W-2 if you receive distributions from certain nonqualified plans. Filing previous years taxes You must attach Forms 1099-R or Forms W-2 to your 2013 tax return if federal income tax was withheld. Filing previous years taxes Generally, you should be sent these forms by January 31, 2014. Filing previous years taxes Nonperiodic Distributions If you receive a nonperiodic distribution from your retirement plan, you may be able to exclude all or part of it from your income as a recovery of your cost. Filing previous years taxes Nonperiodic distributions include cash withdrawals, distributions of current earnings (dividends) on your investment, and certain loans. Filing previous years taxes For information on how to figure the taxable amount of a nonperiodic distribution, see Taxation of Nonperiodic Payments in Publication 575. Filing previous years taxes The taxable part of a nonperiodic distribution may be subject to an additional 10% tax. Filing previous years taxes See Tax on Early Distributions, later. Filing previous years taxes Lump-sum distributions. Filing previous years taxes   If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. Filing previous years taxes The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. Filing previous years taxes The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. Filing previous years taxes You may be able to use the 10-year tax option to figure tax on the ordinary income part. Filing previous years taxes Form 1099-R. Filing previous years taxes   If you receive a total distribution from a plan, you should receive a Form 1099-R. Filing previous years taxes If the distribution qualifies as a lump-sum distribution, box 3 shows the capital gain part of the distribution. Filing previous years taxes The amount in box 2a, Taxable amount, minus the amount in box 3, Capital gain, is the ordinary income part. Filing previous years taxes More information. Filing previous years taxes   For more detailed information on lump-sum distributions, see Publication 575 or Form 4972, Tax on Lump-Sum Distributions. Filing previous years taxes Tax on Early Distributions Most distributions you receive from your qualified retirement plan and nonqualified annuity contracts before you reach age 59½ are subject to an additional tax of 10%. Filing previous years taxes The tax applies to the taxable part of the distribution. Filing previous years taxes For this purpose, a qualified retirement plan is: A qualified employee plan (including a qualified cash or deferred arrangement (CODA) under Internal Revenue Code section 401(k)), A qualified employee annuity plan, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). Filing previous years taxes  An IRA is also a qualified retirement plan for purposes of this tax. Filing previous years taxes General exceptions to tax. Filing previous years taxes   The early distribution tax does not apply to any distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. Filing previous years taxes Additional exceptions. Filing previous years taxes   There are additional exceptions to the early distribution tax for certain distributions from qualified retirement plans and nonqualified annuity contracts. Filing previous years taxes See Publication 575 for details. Filing previous years taxes Reporting tax. Filing previous years taxes   If you owe only the tax on early distributions and distribution code 1 (early distribution, no known exception) is correctly shown in Form 1099-R, box 7, multiply the taxable part of the early distribution by 10% (. Filing previous years taxes 10) and enter the result on Form 1040, line 58, or Form 1040NR, line 56. Filing previous years taxes See the instructions for line 58 of Form 1040 or line 56 of Form 1040NR for more information about reporting the early distribution tax. Filing previous years taxes Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date. Filing previous years taxes Unless the rule for 5% owners applies, this is generally April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. Filing previous years taxes However, your plan may require you to begin to receive payments by April 1 of the year that follows the year in which you reach 70½, even if you have not retired. Filing previous years taxes For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan) (for benefits accruing after 1986). Filing previous years taxes  An IRA is also a qualified retirement plan for purposes of this tax. Filing previous years taxes An excess accumulation is the undistributed remainder of the required minimum distribution that was left in your qualified retirement plan. Filing previous years taxes 5% owners. Filing previous years taxes   If you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the company maintaining your qualified retirement plan, you must begin to receive distributions from the plan by April 1 of the year after the calendar year in which you reach age 70½. Filing previous years taxes See Publication 575 for more information. Filing previous years taxes Amount of tax. Filing previous years taxes   If you do not receive the required minimum distribution, you are subject to an additional tax. Filing previous years taxes The tax equals 50% of the difference between the amount that must be distributed and the amount that was distributed during the tax year. Filing previous years taxes You can get this excise tax excused if you establish that the shortfall in distributions was due to reasonable error and that you are taking reasonable steps to remedy the shortfall. Filing previous years taxes Form 5329. Filing previous years taxes   You must file a Form 5329 if you owe a tax because you did not receive a minimum required distribution from your qualified retirement plan. Filing previous years taxes Additional information. Filing previous years taxes   For more detailed information on the tax on excess accumulation, see Publication 575. Filing previous years taxes Insurance Premiums for Retired Public Safety Officers If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident or health insurance or long-term care insurance. Filing previous years taxes The premiums can be for coverage for you, your spouse, or dependent(s). Filing previous years taxes The distribution must be made directly from the plan to the insurance provider. Filing previous years taxes You can exclude from income the smaller of the amount of the insurance premiums or $3,000. Filing previous years taxes You can only make this election for amounts that would otherwise be included in your income. Filing previous years taxes The amount excluded from your income cannot be used to claim a medical expense deduction. Filing previous years taxes An eligible retirement plan is a governmental plan that is a: Qualified trust, Section 403(a) plan, Section 403(b) annuity, or Section 457(b) plan. Filing previous years taxes If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. Filing previous years taxes The taxable amount shown in box 2a of any Form 1099-R that you receive does not reflect the exclusion. Filing previous years taxes Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Filing previous years taxes Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Filing previous years taxes Enter “PSO” next to the appropriate line on which you report the taxable amount. Filing previous years taxes Railroad Retirement Benefits Benefits paid under the Railroad Retirement Act fall into two categories. Filing previous years taxes These categories are treated differently for income tax purposes. Filing previous years taxes Social security equivalent benefits. Filing previous years taxes   The first category is the amount of tier 1 railroad retirement benefits that equals the social security benefit that a railroad employee or beneficiary would have been entitled to receive under the social security system. Filing previous years taxes This part of the tier 1 benefit is the social security equivalent benefit (SSEB) and is treated for tax purposes like social security benefits. Filing previous years taxes (See Social Security and Equivalent Railroad Retirement Benefits , later. Filing previous years taxes ) Non-social security equivalent benefits. Filing previous years taxes   The second category contains the rest of the tier 1 benefits, called the non-social security equivalent benefit (NSSEB). Filing previous years taxes It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. Filing previous years taxes This category of benefits is treated as an amount received from a qualified employee plan. Filing previous years taxes This allows for the tax-free (nontaxable) recovery of employee contributions from the tier 2 benefits and the NSSEB part of the tier 1 benefits. Filing previous years taxes Vested dual benefits and supplemental annuity benefits are non-contributory pensions and are fully taxable. Filing previous years taxes More information. Filing previous years taxes   For more information about railroad retirement benefits, see Publication 575. Filing previous years taxes Military Retirement Pay Military retirement pay based on age or length of service is taxable and must be included in income as a pension on Form 1040, lines 16a and 16b; on Form 1040A, lines 12a and 12b; or on Form 1040NR, lines 17a and 17b. Filing previous years taxes But, certain military and government disability pensions that are based on a percentage of disability from active service in the Armed Forces of any country generally are not taxable. Filing previous years taxes For more information, including information about veterans' benefits and insurance, see Publication 525. Filing previous years taxes Social Security and Equivalent Railroad Retirement Benefits This discussion explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. Filing previous years taxes Social security benefits include monthly retirement, survivor, and disability benefits. Filing previous years taxes They do not include supplemental security income (SSI) payments, which are not taxable. Filing previous years taxes Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. Filing previous years taxes They commonly are called the social security equivalent benefit (SSEB) portion of tier 1 benefits. Filing previous years taxes If you received these benefits during 2013, you should have received a Form SSA-1099 or Form RRB-1099 (Form SSA-1042S or Form RRB-1042S if you are a nonresident alien), showing the amount of the benefits. Filing previous years taxes Are Any of Your Benefits Taxable? Note. Filing previous years taxes When the term “benefits” is used in this section, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. Filing previous years taxes  To find out whether any of your benefits may be taxable, compare the base amount for your filing status (explained later) with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. Filing previous years taxes When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. Filing previous years taxes S. Filing previous years taxes savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned in American Samoa or Puerto Rico by bona fide residents. Filing previous years taxes Figuring total income. Filing previous years taxes   To figure the total of one-half of your benefits plus your other income, use Worksheet 2-B. Filing previous years taxes If that total amount is more than your base amount, part of your benefits may be taxable. Filing previous years taxes If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Filing previous years taxes Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. Filing previous years taxes If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. Filing previous years taxes If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. Filing previous years taxes Worksheet 2-B. Filing previous years taxes A Quick Way To Check if Your Benefits May Be Taxable A. Filing previous years taxes Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Filing previous years taxes Include  the full amount of any lump-sum benefit payments received in 2013, for 2013 and  earlier years. Filing previous years taxes (If you received more than one form, combine the amounts from box 5  and enter the total. Filing previous years taxes ) A. Filing previous years taxes     Note. Filing previous years taxes If the amount on line A is zero or less, stop here; none of your benefits are  taxable this year. Filing previous years taxes     B. Filing previous years taxes Enter one-half of the amount on line A B. Filing previous years taxes   C. Filing previous years taxes Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Filing previous years taxes   D. Filing previous years taxes Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income for: •Interest from qualified U. Filing previous years taxes S. Filing previous years taxes savings bonds, •Employer-provided adoption benefits, •Foreign earned income or foreign housing, or •Income earned in American Samoa or Puerto Rico by bona fide residents D. Filing previous years taxes   E. Filing previous years taxes Add lines B, C, and D and enter the total E. Filing previous years taxes   F. Filing previous years taxes If you are: •Married filing jointly, enter $32,000 •Single, head of household, qualifying widow(er), or married filing separately and you  lived apart from your spouse for all of 2013, enter $25,000 •Married filing separately and you lived with your spouse at any time during 2013,  enter -0- F. Filing previous years taxes   G. Filing previous years taxes Is the amount on line F less than or equal to the amount on line E? □ No. Filing previous years taxes None of your benefits are taxable this year. Filing previous years taxes  □ Yes. Filing previous years taxes Some of your benefits may be taxable. Filing previous years taxes To figure how much of your benefits  are taxable, see Which worksheet to use under How Much Is Taxable. Filing previous years taxes     Base Amount Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er) with dependent child, $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $0 if you are married filing separately and lived with your spouse at any time during 2013. Filing previous years taxes Repayment of Benefits Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. Filing previous years taxes It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. Filing previous years taxes If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. Filing previous years taxes Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. Filing previous years taxes Your repayments are shown in box 4. Filing previous years taxes The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). Filing previous years taxes Use the amount in box 5 to figure whether any of your benefits are taxable. Filing previous years taxes Tax Withholding and Estimated Tax You can choose to have federal income tax withheld from your social security and/or the SSEB portion of your tier 1 railroad retirement benefits. Filing previous years taxes If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Request. Filing previous years taxes If you do not choose to have income tax withheld, you may have to request additional withholding from other income, or pay estimated tax during the year. Filing previous years taxes For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. Filing previous years taxes How Much Is Taxable? If part of your benefits is taxable, how much is taxable depends on the total amount of your benefits and other income. Filing previous years taxes Generally, the higher that total amount, the greater the taxable part of your benefits. Filing previous years taxes Maximum taxable part. Filing previous years taxes   The taxable part of your benefits usually cannot be more than 50%. Filing previous years taxes However, up to 85% of your benefits can be taxable if either of the following situations applies to you. Filing previous years taxes The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). Filing previous years taxes You are married filing separately and lived with your spouse at any time during 2013. Filing previous years taxes   If you are a nonresident alien, 85% of your benefits are taxable. Filing previous years taxes However, this income is exempt under some tax treaties. Filing previous years taxes Which worksheet to use. Filing previous years taxes   A worksheet to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. Filing previous years taxes However, you will need to use a different worksheet(s) if any of the following situations applies to you. Filing previous years taxes You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse were covered by a retirement plan at work. Filing previous years taxes In this situation, you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. Filing previous years taxes Situation (1) does not apply and you take one or more of the following exclusions. Filing previous years taxes Interest from qualified U. Filing previous years taxes S. Filing previous years taxes savings bonds (Form 8815). Filing previous years taxes Employer-provided adoption benefits (Form 8839). Filing previous years taxes Foreign earned income or housing (Form 2555 or Form 2555-EZ). Filing previous years taxes Income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. Filing previous years taxes In these situations, you must use Worksheet 1 in Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure your taxable benefits. Filing previous years taxes You received a lump-sum payment for an earlier year. Filing previous years taxes In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. Filing previous years taxes See Lump-Sum Election , later. Filing previous years taxes How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040, Form 1040A, or Form 1040NR. Filing previous years taxes You cannot use Form 1040EZ. Filing previous years taxes Reporting on Form 1040. Filing previous years taxes   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 20a and the taxable part on line 20b. Filing previous years taxes If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. Filing previous years taxes Reporting on Form 1040A. Filing previous years taxes   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 14a and the taxable part on line 14b. Filing previous years taxes If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. Filing previous years taxes Reporting on Form 1040NR. Filing previous years taxes   Report 85% of the total amount of your benefits (box 5 of your Form SSA-1042S or Form RRB-1042S) in the appropriate column of Form 1040NR, Schedule NEC, line 8. Filing previous years taxes Benefits not taxable. Filing previous years taxes   If you are filing Form 1040EZ, do not report any benefits on your tax return. Filing previous years taxes If you are filing Form 1040 or Form 1040A, report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. Filing previous years taxes Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Filing previous years taxes If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Filing previous years taxes Lump-Sum Election You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. Filing previous years taxes This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. Filing previous years taxes No part of the lump-sum death benefit is subject to tax. Filing previous years taxes For more information about the lump-sum death benefit, visit the Social Security Administration website at www. Filing previous years taxes SSA. Filing previous years taxes gov, and use keyword: death benefit. Filing previous years taxes Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. Filing previous years taxes However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. Filing previous years taxes You can elect this method if it lowers your taxable benefits. Filing previous years taxes See Publication 915 for more information. Filing previous years taxes Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. Filing previous years taxes If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Filing previous years taxes If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. Filing previous years taxes If you have any questions about this negative figure, contact your local Social Security Administration office or your local U. Filing previous years taxes S. Filing previous years taxes Railroad Retirement Board field office. Filing previous years taxes Joint return. Filing previous years taxes   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5 but your spouse's does not, subtract the box 5 amount on your form from the box 5 amount on your spouse's form. Filing previous years taxes You do this to get your net benefits when figuring if your combined benefits are taxable. Filing previous years taxes Repayment of benefits received in an earlier year. Filing previous years taxes   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. Filing previous years taxes   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Filing previous years taxes Claim it on Schedule A (Form 1040), line 23. Filing previous years taxes   If this deduction is more than $3,000, you have to follow some special instructions. Filing previous years taxes See Publication 915 for those instructions. Filing previous years taxes Sickness and Injury Benefits Generally, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. Filing previous years taxes If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. Filing previous years taxes However, certain payments may not be taxable to you. Filing previous years taxes Some of these payments are discussed later in this section. Filing previous years taxes Also, see Military and Government Disability Pensions and Other Sickness and Injury Benefits in Publication 525. Filing previous years taxes Cost paid by you. Filing previous years taxes   If you pay the entire cost of an accident or health plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. Filing previous years taxes If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. Filing previous years taxes Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. Filing previous years taxes You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A or on line 8 of Form 1040NR until you reach minimum retirement age. Filing previous years taxes Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Filing previous years taxes If you were 65 or older by the end of 2013 or you were retired on permanent and total disability and received taxable disability income, you may be able to claim the credit for the elderly or the disabled. Filing previous years taxes See Credit for the Elderly or the Disabled, later. Filing previous years taxes For more information on this credit, see Publication 524, Credit for the Elderly or the Disabled. Filing previous years taxes Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Filing previous years taxes Report the payments on lines 16a and 16b of Form 1040, on lines 12a and 12b of Form 1040A, or on lines 17a and 17b of Form 1040NR. Filing previous years taxes For more information on pensions and annuities, see Publication 575. Filing previous years taxes Retirement and profit-sharing plans. Filing previous years taxes   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. Filing previous years taxes The payments must be reported as a pension or annuity. Filing previous years taxes Accrued leave payment. Filing previous years taxes   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. Filing previous years taxes The payment is not a disability payment. Filing previous years taxes Include it in your income in the tax year you receive it. Filing previous years taxes Long-Term Care Insurance Contracts In most cases, long-term care insurance contracts generally are treated as accident and health insurance contracts. Filing previous years taxes Amounts you receive from them (other than policyholder dividends or premium refunds) generally are excludable from income as amounts received for personal injury or sickness. Filing previous years taxes However, the amount you can exclude may be limited. Filing previous years taxes Long-term care insurance contracts are discussed in more detail in Publication 525. Filing previous years taxes Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. Filing previous years taxes The exemption also applies to your survivors. Filing previous years taxes The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. Filing previous years taxes If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Filing previous years taxes For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. Filing previous years taxes Return to work. Filing previous years taxes   If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. Filing previous years taxes Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. Filing previous years taxes Federal Employees' Compensation Act (FECA). Filing previous years taxes   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. Filing previous years taxes However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. Filing previous years taxes Report this income on Form 1040, line 7; Form 1040A, line 7; on Form 1040EZ, line 1; or Form 1040NR, line 8. Filing previous years taxes Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. Filing previous years taxes    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Filing previous years taxes For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. Filing previous years taxes Other compensation. Filing previous years taxes   Many other amounts you receive as compensation for sickness or injury are not taxable. Filing previous years taxes These include the following amounts. Filing previous years taxes Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. Filing previous years taxes Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. Filing previous years taxes Compensation you receive for permanent loss or loss of use of a part or function of your body, for your permanent disfigurement, or for such loss or disfigurement suffered by your spouse or dependent(s). Filing previous years taxes This compensation must be based only on the injury and not on the period of your absence from work. Filing previous years taxes These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. Filing previous years taxes Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. Filing previous years taxes This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. Filing previous years taxes Proceeds not received in installments. Filing previous years taxes   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. Filing previous years taxes If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. Filing previous years taxes Proceeds received in installments. Filing previous years taxes   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. Filing previous years taxes   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. Filing previous years taxes Include anything over this excluded part in your income as interest. Filing previous years taxes Installments for life. Filing previous years taxes   If, as the beneficiary under an insurance contract, you are entitled to receive the proceeds in installments for the rest of your life without a refund or period-certain guarantee, you figure the excluded part of each installment by dividing the amount held by the insurance company by your life expectancy. Filing previous years taxes If there is a refund or period-certain guarantee, the amount held by the insurance company for this purpose is reduced by the actuarial value of the guarantee. Filing previous years taxes Surviving spouse. Filing previous years taxes   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude, in any year, up to $1,000 of the interest included in the installments. Filing previous years taxes If you remarry, you can continue to take the exclusion. Filing previous years taxes Surrender of policy for cash. Filing previous years taxes   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Filing previous years taxes In general, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. Filing previous years taxes You should receive a Form 1099-R showing the total proceeds and the taxable part. Filing previous years taxes Report these amounts on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or Form 1040NR, lines 17a and 17b. Filing previous years taxes Endowment Contract Proceeds An endowment contract is a policy that pays over to you a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. Filing previous years taxes Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. Filing previous years taxes To determine your cost, subtract from the total premiums (or other consideration) paid for the contract any amount that you previously received under the contract and excluded from your income. Filing previous years taxes Include in your income the part of the lump-sum payment that is more than your cost. Filing previous years taxes Endowment proceeds that you choose to receive in installments instead of a lump-sum payment at the maturity of the policy are taxed as an annuity. Filing previous years taxes The tax treatment of an annuity is explained in Publication 575. Filing previous years taxes For this treatment to apply, you must choose to receive the proceeds in installments before receiving any part of the lump sum. Filing previous years taxes This election must be made within 60 days after the lump-sum payment first becomes payable to you. Filing previous years taxes Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are generally excluded from income if the insured is terminally or chronically ill. Filing previous years taxes However, see Exception , later. Filing previous years taxes For a chronically ill individual, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. Filing previous years taxes Accelerated death benefits paid on a per diem or other periodic basis without regard to the costs are excludable up to a limit. Filing previous years taxes In addition, if any portion of a death benefit under a life insurance contract on the life of a terminally or chronically ill individual is sold or assigned to a viatical settlement provider, the amount received also is excluded from income. Filing previous years taxes Generally, a viatical settlement provider is one who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill. Filing previous years taxes To report taxable accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. Filing previous years taxes Terminally or chronically ill defined. Filing previous years taxes   A terminally ill person is one who has been certified by a physician as having an illness or physical condition that reasonably can be expected to result in death within 24 months from the date of the certification. Filing previous years taxes A chronically ill person is one who is not terminally ill but has been certified (within the previous 12 months) by a licensed health care practitioner as meeting either of the following conditions. Filing previous years taxes The person is unable to perform (without substantial help) at least two activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) for a period of 90 days or more because of a loss of functional capacity. Filing previous years taxes The person requires substantial supervision to protect himself or herself from threats to health and safety due to severe cognitive impairment. Filing previous years taxes Exception. Filing previous years taxes   The exclusion does not apply to any amount paid to a person other than the insured if that other person has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the other person, or Has a financial interest in the business of the other person. Filing previous years taxes Sale of Home You may be able to exclude from income any gain up to $250,000 ($500,000 on a joint return in most cases) on the sale of your main home. Filing previous years taxes Generally, if you can exclude all of the gain, you do not need to report the sale on your tax return. Filing previous years taxes You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. Filing previous years taxes Main home. Filing previous years taxes   Usually, your main home is the home you live in most of the time and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. Filing previous years taxes Repaying the first-time homebuyer credit because you sold your home. Filing previous years taxes   If you claimed a first-time homebuyer credit for your main home and you sell it, you may have to repay the credit. Filing previous years taxes For a home purchased in 2008 and used as your main home until sold in 2013, you must file Form 5405 and repay the balance of the unpaid credit on your 2013 tax return. Filing previous years taxes   For a home purchased after 2008, you generally must repay the entire credit if the home was sold (or otherwise ceased to be your main home) within 36 months of the purchase date. Filing previous years taxes If you purchased your home in 2009 and used it as your main home until sold in 2013, you do not have to repay the credit or file Form 5405. Filing previous years taxes If you purchased your home in 2010 and used it as your main home until sold in 2013, you may have to file Form 5405 and repay the entire credit on your 2013 tax return. Filing previous years taxes   See the Instructions for Form 5405 for more information about repaying the credit and exceptions to repayment that may apply to you. Filing previous years taxes Maximum Amount of Exclusion You can generally exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. Filing previous years taxes You meet the ownership test. Filing previous years taxes You meet the use test. Filing previous years taxes During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. Filing previous years taxes You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . Filing previous years taxes Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. Filing previous years taxes This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). Filing previous years taxes Exception to ownership and use tests. Filing previous years taxes   If you owned and lived in the property as your main home for less than 2 years, you still can claim an exclusion in some cases. Filing previous years taxes Generally, you must have sold the home due to a change in place of employment, health, or unforeseen circumstances. Filing previous years taxes The maximum amount you can exclude will be reduced. Filing previous years taxes See Publication 523, Selling Your Home, for more information. Filing previous years taxes Exception to use test for individuals with a disability. Filing previous years taxes   There is an exception to the use test if, during the 5-year period before the sale of your home: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year. Filing previous years taxes Under this exception, you are considered to live in your home during any time that you own the home and live in a facility (including a nursing home) that is licensed by a state or political subdivision to care for persons in your condition. Filing previous years taxes   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. Filing previous years taxes Exception to ownership test for property acquired in a like-kind exchange. Filing previous years taxes   You must have owned your main home for at least 5 years to qualify for the exclusion if you acquired your main home in a like-kind exchange. Filing previous years taxes This special 5-year ownership rule continues to apply to a home you acquired in a like-kind exchange and gave to another person. Filing previous years taxes A like-kind exchange is an exchange of property held for productive use in a trade or business or for investment. Filing previous years taxes See Publication 523 for more information. Filing previous years taxes Period of nonqualified use. Filing previous years taxes   Generally, the gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gain is allocated to periods of nonqualified use. Filing previous years taxes Nonqualified use is any period after December 31, 2008, during which the property is not used as the main home. Filing previous years taxes See Publication 523 for more information. Filing previous years taxes Married Persons In the special situations discussed below, if you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use test, you can exclude up to $250,000 of gain. Filing previous years taxes However, see Special rules for joint returns , next. Filing previous years taxes Special rules for joint returns. Filing previous years taxes   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. Filing previous years taxes You are married and file a joint return for the year. Filing previous years taxes Either you or your spouse meets the ownership test. Filing previous years taxes Both you and your spouse meet the use test. Filing previous years taxes During the 2-year period ending on the date of the sale, neither you nor your spouse exclude gain from the sale of another home. Filing previous years taxes Sale of home by surviving spouse. Filing previous years taxes   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. Filing previous years taxes   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home in 2013. Filing previous years taxes The sale or exchange took place no more than 2 years after the date of death of your spouse. Filing previous years taxes You have not remarried. Filing previous years taxes You and your spouse met the use test at the time of your spouse's death. Filing previous years taxes You or your spouse met the ownership test at the time of your spouse's death. Filing previous years taxes Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. Filing previous years taxes Home transferred from spouse. Filing previous years taxes   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. Filing previous years taxes Use of home after divorce. Filing previous years taxes   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. Filing previous years taxes Business Use or Rental of Home You may be able to exclude gain from the sale of a home that you have used for business or to produce rental income. Filing previous years taxes However, you must meet the ownership and use tests. Filing previous years taxes See Publication 523 for more information. Filing previous years taxes Depreciation after May 6, 1997. Filing previous years taxes   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. Filing previous years taxes See Publication 523 for more information. Filing previous years taxes Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and you do not qualify to exclude all of it, You have a gain and you choose not to exclude it, or You received Form 1099-S. Filing previous years taxes If you have a gain that you cannot or choose not to exclude, if you received a Form 1099-S, or if you have a deductible loss, report the sale on your tax return. Filing previous years taxes Report the sale on Part I or Part II of Form 8949 as a short-term or long-term transaction, depending on how long you owned the home. Filing previous years taxes If you used your home for business or to produce rental income, you may have to use Form 4797, Sales of Business Property, to report the sale of the business or rental part. Filing previous years taxes See Publication 523 for more information. 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The Filing Previous Years Taxes

Filing previous years taxes Publication 596 - Main Content Table of Contents Chapter 1—Rules for EveryoneRule 1—Adjusted Gross Income (AGI) Limits Rule 2—You Must Have a Valid Social Security Number (SSN) Rule 3—Your Filing Status Cannot Be Married Filing Separately Rule 4—You Must Be a U. Filing previous years taxes S. Filing previous years taxes Citizen or Resident Alien All Year Rule 5—You Cannot File Form 2555 or Form 2555-EZ Rule 6—Your Investment Income Must Be $3,300 or Less Rule 7—You Must Have Earned Income Chapter 2—Rules If You Have a Qualifying ChildRule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9—Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer Chapter 3—Rules If You Do Not Have a Qualifying ChildRule 11—You Must Be at Least Age 25 but Under Age 65 Rule 12—You Cannot Be the Dependent of Another Person Rule 13—You Cannot Be a Qualifying Child of Another Taxpayer Rule 14—You Must Have Lived in the United States More Than Half of the Year Chapter 4—Figuring and Claiming the EICRule 15—Earned Income Limits IRS Will Figure the EIC for You How To Figure the EIC Yourself Schedule EIC Chapter 5—Disallowance of the EICForm 8862 Are You Prohibited From Claiming the EIC for a Period of Years? Chapter 6—Detailed ExamplesExample 1—Sharon Rose Example 2—Cynthia and Jerry Grey Chapter 1—Rules for Everyone This chapter discusses Rules 1 through 7. Filing previous years taxes You must meet all seven rules to qualify for the earned income credit. Filing previous years taxes If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the publication. Filing previous years taxes If you meet all seven rules in this chapter, then read either chapter 2 or chapter 3 (whichever applies) for more rules you must meet. Filing previous years taxes Rule 1—Adjusted Gross Income (AGI) Limits 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. Filing previous years taxes Adjusted gross income (AGI). Filing previous years taxes   AGI is the amount on line 4 of Form 1040EZ, line 22 of Form 1040A, or line 38 of Form 1040. Filing previous years taxes   If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. Filing previous years taxes You do not need to read the rest of this publication. Filing previous years taxes Example—AGI is more than limit. Filing previous years taxes Your AGI is $38,550, you are single, and you have one qualifying child. Filing previous years taxes You cannot claim the EIC because your AGI is not less than $37,870. Filing previous years taxes 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. Filing previous years taxes Community property. Filing previous years taxes   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. Filing previous years taxes This is different from the community property rules that apply under Rule 7. Filing previous years taxes Rule 2—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). Filing previous years taxes Any qualifying child listed on Schedule EIC also must have a valid SSN. Filing previous years taxes (See Rule 8 if you have a qualifying child. Filing previous years taxes ) 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. Filing previous years taxes An example of a federally funded benefit is Medicaid. Filing previous years taxes 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. Filing previous years taxes S. Filing previous years taxes citizen or permanent resident, ask the SSA for a new social security card without the legend. Filing previous years taxes If you get the new card after you have already filed your return, you can file an amended return on Form 1040X, Amended U. Filing previous years taxes S. Filing previous years taxes Individual Income Tax Return, to claim the EIC. Filing previous years taxes U. Filing previous years taxes S. Filing previous years taxes citizen. Filing previous years taxes   If you were a U. Filing previous years taxes S. Filing previous years taxes citizen when you received your SSN, you have a valid SSN. Filing previous years taxes Valid for work only with INS authorization or DHS authorization. Filing previous years taxes   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. Filing previous years taxes SSN missing or incorrect. Filing previous years taxes   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. Filing previous years taxes Other taxpayer identification number. Filing previous years taxes   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). Filing previous years taxes ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. Filing previous years taxes No SSN. Filing previous years taxes   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). Filing previous years taxes You cannot claim the EIC. Filing previous years taxes Getting an SSN. Filing previous years taxes   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 with the SSA. Filing previous years taxes You can get Form SS-5 online at www. Filing previous years taxes socialsecurity. Filing previous years taxes gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. Filing previous years taxes Filing deadline approaching and still no SSN. Filing previous years taxes   If the filing deadline is approaching and you still do not have an SSN, you have two choices. Filing previous years taxes Request an automatic 6-month extension of time to file your return. Filing previous years taxes You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Filing previous years taxes S. Filing previous years taxes Individual Income Tax Return. Filing previous years taxes For more information, see the instructions for Form 4868. Filing previous years taxes File the return on time without claiming the EIC. Filing previous years taxes After receiving the SSN, file an amended return, Form 1040X, claiming the EIC. Filing previous years taxes Attach a filled-in Schedule EIC, Earned Income Credit, if you have a qualifying child. Filing previous years taxes Rule 3—Your Filing Status Cannot Be “Married Filing Separately” If you are married, you usually must file a joint return to claim the EIC. Filing previous years taxes Your filing status cannot be “Married filing separately. Filing previous years taxes ” Spouse did not live with you. Filing previous years taxes   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. Filing previous years taxes In that case, you may be able to claim the EIC. Filing previous years taxes For detailed information about filing as head of household, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Filing previous years taxes Rule 4—You Must Be a U. Filing previous years taxes S. Filing previous years taxes 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. Filing previous years taxes You can use that filing status only if one spouse is a U. Filing previous years taxes S. Filing previous years taxes citizen or resident alien and you choose to treat the nonresident spouse as a U. Filing previous years taxes S. Filing previous years taxes resident. Filing previous years taxes If you make this choice, you and your spouse are taxed on your worldwide income. Filing previous years taxes If you need more information on making this choice, get Publication 519, U. Filing previous years taxes S. Filing previous years taxes Tax Guide for Aliens. Filing previous years taxes 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). Filing previous years taxes Rule 5—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. Filing previous years taxes You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. Filing previous years taxes U. Filing previous years taxes S. Filing previous years taxes possessions are not foreign countries. Filing previous years taxes See Publication 54, Tax Guide for U. Filing previous years taxes S. Filing previous years taxes Citizens and Resident Aliens Abroad, for more detailed information. Filing previous years taxes Rule 6—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. Filing previous years taxes If your investment income is more than $3,300, you cannot claim the credit. Filing previous years taxes Form 1040EZ. Filing previous years taxes   If you file Form 1040EZ, your investment income is the total of the amount on line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. Filing previous years taxes Form 1040A. Filing previous years taxes   If you file Form 1040A, your investment income is the total of the amounts on lines 8a (taxable interest), 8b (tax-exempt interest), 9a (ordinary dividends), and 10 (capital gain distributions) on that form. Filing previous years taxes Form 1040. Filing previous years taxes   If you file Form 1040, use Worksheet 1 in this chapter to figure your investment income. Filing previous years taxes    Worksheet 1. Filing previous years taxes Investment Income If You Are Filing Form 1040 Use this worksheet to figure investment income for the earned income credit when you file Form 1040. Filing previous years taxes Interest and Dividends         1. Filing previous years taxes Enter any amount from Form 1040, line 8a 1. Filing previous years taxes   2. Filing previous years taxes Enter any amount from Form 1040, line 8b, plus any amount on Form 8814, line 1b 2. Filing previous years taxes   3. Filing previous years taxes Enter any amount from Form 1040, line 9a 3. Filing previous years taxes   4. Filing previous years taxes Enter the amount from Form 1040, line 21, that is from Form 8814 if you are filing that form to report your child's interest and dividend income on your return. Filing previous years taxes (If your child received an Alaska Permanent Fund dividend, use Worksheet 2 in this chapter to figure the amount to enter on this line. Filing previous years taxes ) 4. Filing previous years taxes   Capital Gain Net Income         5. Filing previous years taxes Enter the amount from Form 1040, line 13. Filing previous years taxes If the amount on that line is a loss, enter -0- 5. Filing previous years taxes       6. Filing previous years taxes Enter any gain from Form 4797, Sales of Business Property, line 7. Filing previous years taxes If the amount on that line is a loss, enter -0-. Filing previous years taxes (But, if you completed lines 8 and 9 of Form 4797, enter the amount from line 9 instead. Filing previous years taxes ) 6. Filing previous years taxes       7. Filing previous years taxes Substract line 6 of this worksheet from line 5 of this worksheet. Filing previous years taxes (If the result is less than zero, enter -0-. Filing previous years taxes ) 7. Filing previous years taxes   Royalties and Rental Income From Personal Property         8. Filing previous years taxes Enter any royalty income from Schedule E, line 23b, plus any income from the rental of personal property shown on Form 1040, line 21 8. Filing previous years taxes       9. Filing previous years taxes Enter any expenses from Schedule E, line 20, related to royalty income, plus any expenses from the rental of personal property deducted on Form 1040, line 36 9. Filing previous years taxes       10. Filing previous years taxes Subtract the amount on line 9 of this worksheet from the amount on line 8. Filing previous years taxes (If the result is less than zero, enter -0-. Filing previous years taxes ) 10. Filing previous years taxes   Passive Activities         11. Filing previous years taxes Enter the total of any net income from passive activities (such as income included on Schedule E, line 26, 29a (col. Filing previous years taxes (g)), 34a (col. Filing previous years taxes (d)), or 40). Filing previous years taxes (See instructions below for lines 11 and 12. Filing previous years taxes ) 11. Filing previous years taxes       12. Filing previous years taxes Enter the total of any losses from passive activities (such as losses included on Schedule E, line 26, 29b (col. Filing previous years taxes (f)), 34b (col. Filing previous years taxes (c)), or 40). Filing previous years taxes (See instructions below for lines 11 and 12. Filing previous years taxes ) 12. Filing previous years taxes       13. Filing previous years taxes Combine the amounts on lines 11 and 12 of this worksheet. Filing previous years taxes (If the result is less than zero, enter -0-. Filing previous years taxes ) 13. Filing previous years taxes   14. Filing previous years taxes Add the amounts on lines 1, 2, 3, 4, 7, 10, and 13. Filing previous years taxes Enter the total. Filing previous years taxes This is your investment income 14. Filing previous years taxes   15. Filing previous years taxes Is the amount on line 14 more than $3,300? ❑ Yes. Filing previous years taxes You cannot take the credit. Filing previous years taxes  ❑ No. Filing previous years taxes Go to Step 3 of the Form 1040 instructions for lines 64a and 64b to find out if you can take the credit (unless you are using this publication to find out if you can take the credit; in that case, go to Rule 7, next). Filing previous years taxes       Instructions for lines 11 and 12. Filing previous years taxes In figuring the amount to enter on lines 11 and 12, do not take into account any royalty income (or loss) included on line 26 of Schedule E or any amount included in your earned income. Filing previous years taxes To find out if the income on line 26 or line 40 of Schedule E is from a passive activity, see the Schedule E instructions. Filing previous years taxes If any of the rental real estate income (or loss) included on Schedule E, line 26, is not from a passive activity, print “NPA” and the amount of that income (or loss) on the dotted line next to line 26. Filing previous years taxes Worksheet 2. Filing previous years taxes Worksheet for Line 4 of Worksheet 1 Complete this worksheet only if Form 8814 includes an Alaska Permanent Fund dividend. Filing previous years taxes Note. Filing previous years taxes Fill out a separate Worksheet 2 for each Form 8814. Filing previous years taxes     1. Filing previous years taxes Enter the amount from Form 8814, line 2a 1. Filing previous years taxes   2. Filing previous years taxes Enter the amount from Form 8814, line 2b 2. Filing previous years taxes   3. Filing previous years taxes Subtract line 2 from line 1 3. Filing previous years taxes   4. Filing previous years taxes Enter the amount from Form 8814, line 1a 4. Filing previous years taxes   5. Filing previous years taxes Add lines 3 and 4 5. Filing previous years taxes   6. Filing previous years taxes Enter the amount of the child's Alaska Permanent Fund dividend 6. Filing previous years taxes   7. Filing previous years taxes Divide line 6 by line 5. Filing previous years taxes Enter the result as a decimal (rounded to at least three places) 7. Filing previous years taxes   8. Filing previous years taxes Enter the amount from Form 8814, line 12 8. Filing previous years taxes   9. Filing previous years taxes Multiply line 7 by line 8 9. Filing previous years taxes   10. Filing previous years taxes Subtract line 9 from line 8. Filing previous years taxes Enter the result on line 4 of Worksheet 1 10. Filing previous years taxes     (If filing more than one Form 8814, enter on line 4 of Worksheet 1 the total of the amounts on line 10 of all Worksheets 2. Filing previous years taxes )     Example—completing Worksheet 2. Filing previous years taxes Your 10-year-old child has taxable interest income of $400, an Alaska Permanent Fund dividend of $1,000, and ordinary dividends of $1,100, of which $500 are qualified dividends. Filing previous years taxes You choose to report this income on your return. Filing previous years taxes You enter $400 on line 1a of Form 8814, $2,100 ($1,000 + $1,100) on line 2a, and $500 on line 2b. Filing previous years taxes After completing lines 4 through 11, you enter $400 on line 12 of Form 8814 and line 21 of Form 1040. Filing previous years taxes On Worksheet 2, you enter $2,100 on line 1, $500 on line 2, $1,600 on line 3, $400 on line 4, $2,000 on line 5, $1,000 on line 6, 0. Filing previous years taxes 500 on line 7, $400 on line 8, $200 on line 9, and $200 on line 10. Filing previous years taxes You then enter $200 on line 4 of Worksheet 1. Filing previous years taxes Rule 7—You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. Filing previous years taxes If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. Filing previous years taxes If you are an employee, earned income includes all the taxable income you get from your employer. Filing previous years taxes Rule 15 has information that will help you figure the amount of your earned income. Filing previous years taxes If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the Form 1040 instructions. Filing previous years taxes Earned Income Earned income includes all of the following types of income. Filing previous years taxes Wages, salaries, tips, and other taxable employee pay. Filing previous years taxes Employee pay is earned income only if it is taxable. Filing previous years taxes Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Filing previous years taxes But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained later in this chapter. Filing previous years taxes Net earnings from self-employment. Filing previous years taxes Gross income received as a statutory employee. Filing previous years taxes Wages, salaries, and tips. Filing previous years taxes    Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. Filing previous years taxes You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). Filing previous years taxes Nontaxable combat pay election. Filing previous years taxes   You can elect to include your nontaxable combat pay in earned income for the earned income credit. Filing previous years taxes The amount of your nontaxable combat pay should be shown on your Form W-2, in box 12, with code Q. Filing previous years taxes Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. Filing previous years taxes For details, see Nontaxable combat pay in chapter 4. Filing previous years taxes Net earnings from self-employment. Filing previous years taxes   You may have net earnings from self-employment if: You own your own business, or You are a minister or member of a religious order. Filing previous years taxes Minister's housing. Filing previous years taxes   The rental value of a home or a housing allowance provided to a minister as part of the minister's pay generally is not subject to income tax but is included in net earnings from self-employment. Filing previous years taxes For that reason, it is included in earned income for the EIC (except in the cases described in Approved Form 4361 or Form 4029 , below). Filing previous years taxes Statutory employee. Filing previous years taxes   You are a statutory employee if you receive a Form W-2 on which the “Statutory employee” box (box 13) is checked. Filing previous years taxes You report your income and expenses as a statutory employee on Schedule C or C-EZ (Form 1040). Filing previous years taxes Strike benefits. Filing previous years taxes   Strike benefits paid by a union to its members are earned income. Filing previous years taxes 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. Filing previous years taxes Each approved form exempts certain income from social security taxes. Filing previous years taxes Each form is discussed here in terms of what is or is not earned income for the EIC. Filing previous years taxes Form 4361. Filing previous years taxes   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. Filing previous years taxes This includes wages, salaries, tips, and other taxable employee compensation. Filing previous years taxes A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. Filing previous years taxes Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. Filing previous years taxes Examples include fees for performing marriages and honoraria for delivering speeches. Filing previous years taxes Form 4029. Filing previous years taxes   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. Filing previous years taxes However, amounts you received as a self-employed individual do not count as earned income. Filing previous years taxes Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. Filing previous years taxes 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. Filing previous years taxes Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. Filing previous years taxes You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. Filing previous years taxes Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Filing previous years taxes Report taxable pension payments on Form 1040, lines 16a and 16b, or Form 1040A, lines 12a and 12b. Filing previous years taxes Disability insurance payments. Filing previous years taxes   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. Filing previous years taxes It does not matter whether you have reached minimum retirement age. Filing previous years taxes If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. Filing previous years taxes ” 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. Filing previous years taxes Do not include any of these items in your earned income. Filing previous years taxes Earnings while an inmate. Filing previous years taxes   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. Filing previous years taxes This includes amounts for work performed while in a work release program or while in a halfway house. Filing previous years taxes Workfare payments. Filing previous years taxes   Nontaxable workfare payments are not earned income for the EIC. Filing previous years taxes 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 sufficient private sector employment is not available, or (2) community service program activities. Filing previous years taxes Community property. Filing previous years taxes   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. Filing previous years taxes That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. Filing previous years taxes 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. Filing previous years taxes Nevada, Washington, and California domestic partners. Filing previous years taxes   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. Filing previous years taxes Your earned income for the EIC does not include any amount earned by your partner. Filing previous years taxes Your earned income includes the entire amount you earned. Filing previous years taxes For details, see Publication 555. Filing previous years taxes Conservation Reserve Program (CRP) payments. Filing previous years taxes   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. Filing previous years taxes Nontaxable military pay. Filing previous years taxes   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. Filing previous years taxes Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). Filing previous years taxes See Publication 3, Armed Forces' Tax Guide, for more information. Filing previous years taxes    Combat pay. Filing previous years taxes You can elect to include your nontaxable combat pay in earned income for the EIC. Filing previous years taxes See Nontaxable combat pay in chapter 4. Filing previous years taxes Chapter 2—Rules If You Have a Qualifying Child If you have met all the rules in chapter 1, use this chapter to see if you have a qualifying child. Filing previous years taxes This chapter discusses Rules 8 through 10. Filing previous years taxes You must meet all three of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned income credit with a qualifying child. Filing previous years taxes You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. Filing previous years taxes (You cannot file Form 1040EZ. Filing previous years taxes ) You also must complete Schedule EIC and attach it to your return. Filing previous years taxes If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find out what to do next. Filing previous years taxes No qualifying child. Filing previous years taxes   If you do not meet Rule 8, you do not have a qualifying child. Filing previous years taxes Read chapter 3 to find out if you can get the earned income credit without a qualifying child. Filing previous years taxes Rule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. Filing previous years taxes The fours tests are: Relationship, Age, Residency, and Joint return. Filing previous years taxes The four tests are illustrated in Figure 1. Filing previous years taxes The paragraphs that follow contain more information about each test. Filing previous years taxes 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). Filing previous years taxes The following definitions clarify the relationship test. Filing previous years taxes Adopted child. Filing previous years taxes   An adopted child is always treated as your own child. Filing previous years taxes The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Filing previous years taxes Foster child. Filing previous years taxes   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Filing previous years taxes (An authorized placement agency includes a state or local government agency. Filing previous years taxes It also includes a tax-exempt organization licensed by a state. Filing previous years taxes In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. Filing previous years taxes ) Example. Filing previous years taxes 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. Filing previous years taxes Debbie is your foster child. Filing previous years taxes Figure 1. Filing previous years taxes Tests for Qualifying Child Please click here for the text description of the image. Filing previous years taxes Conditions for Qualifying Child 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. Filing previous years taxes The following examples and definitions clarify the age test. Filing previous years taxes Example 1—child not under age 19. Filing previous years taxes Your son turned 19 on December 10. Filing previous years taxes 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. Filing previous years taxes Example 2—child not younger than you or your spouse. Filing previous years taxes Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. Filing previous years taxes He is not disabled. Filing previous years taxes Both you and your spouse are 21 years old, and you file a joint return. Filing previous years taxes Your brother is not your qualifying child because he is not younger than you or your spouse. Filing previous years taxes Example 3—child younger than your spouse but not younger than you. Filing previous years taxes The facts are the same as in Example 2 except that your spouse is 25 years old. Filing previous years taxes Because your brother is younger than your spouse, he is your qualifying child, even though he is not younger than you. Filing previous years taxes Student defined. Filing previous years taxes   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. Filing previous years taxes   The 5 calendar months need not be consecutive. Filing previous years taxes   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. Filing previous years taxes School defined. Filing previous years taxes   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Filing previous years taxes However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. Filing previous years taxes Vocational high school students. Filing previous years taxes   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. Filing previous years taxes Permanently and totally disabled. Filing previous years taxes   Your child is permanently and totally disabled if both of the following apply. Filing previous years taxes He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Filing previous years taxes A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Filing previous years taxes Residency Test Your child must have lived with you in the United States for more than half of 2013. Filing previous years taxes The following definitions clarify the residency test. Filing previous years taxes United States. Filing previous years taxes   This means the 50 states and the District of Columbia. Filing previous years taxes It does not include Puerto Rico or U. Filing previous years taxes S. Filing previous years taxes possessions such as Guam. Filing previous years taxes Homeless shelter. Filing previous years taxes   Your home can be any location where you regularly live. Filing previous years taxes You do not need a traditional home. Filing previous years taxes 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. Filing previous years taxes Military personnel stationed outside the United States. Filing previous years taxes   U. Filing previous years taxes S. Filing previous years taxes 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. Filing previous years taxes Extended active duty. Filing previous years taxes   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Filing previous years taxes 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. Filing previous years taxes Birth or death of child. Filing previous years taxes    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. Filing previous years taxes Temporary absences. Filing previous years taxes   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. Filing previous years taxes Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. Filing previous years taxes Kidnapped child. Filing previous years taxes   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. Filing previous years taxes The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family. Filing previous years taxes This treatment applies for all years until the child is returned. Filing previous years taxes 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. Filing previous years taxes   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. Filing previous years taxes Joint Return Test To meet this test, the child cannot file a joint return for the year. Filing previous years taxes Exception. Filing previous years taxes   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. Filing previous years taxes Example 1—child files joint return. Filing previous years taxes You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Filing previous years taxes He earned $25,000 for the year. Filing previous years taxes The couple files a joint return. Filing previous years taxes Because your daughter and her husband file a joint return, she is not your qualifying child. Filing previous years taxes Example 2—child files joint return to get refund of tax withheld. Filing previous years taxes Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Filing previous years taxes They do not have a child. Filing previous years taxes Neither is required to file a tax return. Filing previous years taxes Taxes were taken out of their pay, so they file a joint return only to get a refund of the withheld taxes. Filing previous years taxes The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Filing previous years taxes Example 3—child files joint return to claim American opportunity credit. Filing previous years taxes The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Filing previous years taxes 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. Filing previous years taxes Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to claim a refund of income tax withheld or estimated tax paid. Filing previous years taxes The exception to the joint return test does not apply, so your son is not your qualifying child. Filing previous years taxes Married child. Filing previous years taxes   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. Filing previous years taxes    Social security number. Filing previous years taxes Your 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. Filing previous years taxes 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), issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. Filing previous years taxes   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. Filing previous years taxes For more information about SSNs, see Rule 2. Filing previous years taxes Rule 9—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. Filing previous years taxes However, only one of these persons can actually treat the child as a qualifying child. Filing previous years taxes 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). Filing previous years taxes The exemption for the child. Filing previous years taxes The child tax credit. Filing previous years taxes Head of household filing status. Filing previous years taxes The credit for child and dependent care expenses. Filing previous years taxes The exclusion for dependent care benefits. Filing previous years taxes The EIC. Filing previous years taxes The other person cannot take any of these benefits based on this qualifying child. Filing previous years taxes In other words, you and the other person cannot agree to divide these tax benefits between you. Filing previous years taxes The other person cannot take any of these tax benefits unless he or she has a different qualifying child. Filing previous years taxes The tiebreaker rules, which follow, explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. Filing previous years taxes However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. Filing previous years taxes Tiebreaker rules. Filing previous years taxes   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. Filing previous years taxes If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Filing previous years taxes 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. Filing previous years taxes 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. Filing previous years taxes 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. Filing previous years taxes 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. Filing previous years taxes 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. Filing previous years taxes 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. Filing previous years taxes See Example 8. Filing previous years taxes   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. Filing previous years taxes See Examples 1 through 13. Filing previous years taxes   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 chapter 3 for people who do not have a qualifying child. Filing previous years taxes If the other person cannot claim the EIC. Filing previous years taxes   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. Filing previous years taxes See Examples 6 and 7. Filing previous years taxes 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 in this chapter. Filing previous years taxes Examples. Filing previous years taxes    The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. Filing previous years taxes Example 1—child lived with parent and grandparent. Filing previous years taxes You and your 2-year-old son Jimmy lived with your mother all year. Filing previous years taxes You are 25 years old, unmarried, and your AGI is $9,000. Filing previous years taxes Your only income was $9,000 from a part-time job. Filing previous years taxes Your mother's only income was $20,000 from her job, and her AGI is $20,000. Filing previous years taxes Jimmy's father did not live with you or Jimmy. Filing previous years taxes The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. Filing previous years taxes 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. Filing previous years taxes However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier in this chapter for which that person qualifies). Filing previous years taxes He is not a qualifying child of anyone else, including his father. Filing previous years taxes 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). Filing previous years taxes Example 2—parent has higher AGI than grandparent. Filing previous years taxes The facts are the same as in Example 1 except your AGI is $25,000. Filing previous years taxes Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. Filing previous years taxes Only you can claim him. Filing previous years taxes Example 3—two persons claim same child. Filing previous years taxes The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. Filing previous years taxes 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. Filing previous years taxes 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. Filing previous years taxes Example 4—qualifying children split between two persons. Filing previous years taxes 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. Filing previous years taxes Only one of you can claim each child. Filing previous years taxes However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Filing previous years taxes For example, if you claim one child, your mother can claim the other two. Filing previous years taxes Example 5—taxpayer who is a qualifying child. Filing previous years taxes The facts are the same as in Example 1 except that you are only 18 years old. Filing previous years taxes This means you are a qualifying child of your mother. Filing previous years taxes Because of Rule 10, discussed next, you cannot claim the EIC and cannot claim your son as a qualifying child. Filing previous years taxes Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. Filing previous years taxes 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. Filing previous years taxes Example 6—grandparent with too much earned income to claim EIC. Filing previous years taxes The facts are the same as in Example 1 except that your mother earned $50,000 from her job. Filing previous years taxes Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. Filing previous years taxes Example 7—parent with too much earned income to claim EIC. Filing previous years taxes The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. Filing previous years taxes Your earned income is too high for you to claim the EIC. Filing previous years taxes But your mother cannot claim the EIC either, because her AGI is not higher than yours. Filing previous years taxes Example 8—child lived with both parents and grandparent. Filing previous years taxes 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 AGI of $30,000 on a joint return. Filing previous years taxes 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. Filing previous years taxes 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. Filing previous years taxes In other words, each parent's AGI can be treated as $15,000. Filing previous years taxes Example 9—separated parents. Filing previous years taxes You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. Filing previous years taxes In August and September, Joey lived with you. Filing previous years taxes For the rest of the year, Joey lived with your husband, who is Joey's father. Filing previous years taxes 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. Filing previous years taxes 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. Filing previous years taxes You and your husband will file separate returns. Filing previous years taxes Your husband agrees to let you treat Joey as a qualifying child. Filing previous years taxes 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. Filing previous years taxes However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. Filing previous years taxes See Rule 3. Filing previous years taxes Example 10—separated parents claim same child. Filing previous years taxes The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. Filing previous years taxes In this case, only your husband will be allowed to treat Joey as a qualifying child. Filing previous years taxes This is because, during 2013, the boy lived with him longer than with you. Filing previous years taxes You cannot claim the EIC (either with or without a qualifying child). Filing previous years taxes 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. Filing previous years taxes See Rule 3. Filing previous years taxes Example 11—unmarried parents. Filing previous years taxes You, your 5-year-old son, and your son's father lived together all year. Filing previous years taxes You and your son's father are not married. Filing previous years taxes 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. Filing previous years taxes Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. Filing previous years taxes Neither of you had any other income. Filing previous years taxes Your son's father agrees to let you treat the child as a qualifying child. Filing previous years taxes 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. Filing previous years taxes Example 12—unmarried parents claim same child. Filing previous years taxes 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. Filing previous years taxes In this case, only your son's father will be allowed to treat your son as a qualifying child. Filing previous years taxes This is because his AGI, $14,000, is more than your AGI, $12,000. Filing previous years taxes You cannot claim the EIC (either with or without a qualifying child). Filing previous years taxes Example 13—child did not live with a parent. Filing previous years taxes You and your 7-year-old niece, your sister's child, lived with your mother all year. Filing previous years taxes You are 25 years old, and your AGI is $9,300. Filing previous years taxes Your only income was from a part-time job. Filing previous years taxes Your mother's AGI is $15,000. Filing previous years taxes Her only income was from her job. Filing previous years taxes Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Filing previous years taxes 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. Filing previous years taxes However, only your mother can treat her as a qualifying child. Filing previous years taxes This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Filing previous years taxes Special rule for divorced or separated parents (or parents who live apart). Filing previous years taxes   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. Filing previous years taxes 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 time during the last 6 months of 2013, whether or not they are or were married. Filing previous years taxes The child received over half of his or her support for the year from the parents. Filing previous years taxes The child is in the custody of one or both parents for more than half of 2013. Filing previous years taxes Either of the following statements is true. Filing previous years taxes 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. Filing previous years taxes 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. Filing previous years taxes 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. Filing previous years taxes For details, see Publication 501. Filing previous years taxes Also see Applying Rule 9 to divorced or separated parents (or parents who live apart), next. Filing previous years taxes Applying Rule 9 to divorced or separated parents (or parents who live apart). Filing previous years taxes   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. Filing previous years taxes 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. Filing previous years taxes 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. Filing previous years taxes Example 1. Filing previous years taxes You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Filing previous years taxes Your AGI is $10,000. Filing previous years taxes Your mother’s AGI is $25,000. Filing previous years taxes Your son's father did not live with you or your son. Filing previous years taxes Under the Special rule for 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. Filing previous years taxes 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. Filing previous years taxes You and your mother did not have any child care expenses or dependent care benefits. Filing previous years taxes 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. Filing previous years taxes Example 2. Filing previous years taxes The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. Filing previous years taxes Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Filing previous years taxes Example 3. Filing previous years taxes 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. Filing previous years taxes Your mother also claims him as a qualifying child for head of household filing status. Filing previous years taxes You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. Filing previous years taxes The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. Filing previous years taxes Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Filing previous years taxes ) if all of the following statements are true. Filing previous years taxes You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Filing previous years taxes Or, you are that person's brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Filing previous years taxes 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. Filing previous years taxes You lived with that person in the United States for more than half of the year. Filing previous years taxes 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). Filing previous years taxes For more details about the tests to be a qualifying child, see Rule 8. Filing previous years taxes If you are a qualifying child of another taxpayer, you cannot claim the EIC. Filing previous years taxes 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. Filing previous years taxes Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). Filing previous years taxes Example. Filing previous years taxes You and your daughter lived with your mother all year. Filing previous years taxes You are 22 years old, unmarried, and attended a trade school full time. Filing previous years taxes You had a part-time job and earned $5,700. Filing previous years taxes You had no other income. Filing previous years taxes Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. Filing previous years taxes She can claim the EIC if she meets all the other requirements. Filing previous years taxes Because you are your mother's qualifying child, you cannot claim the EIC. Filing previous years taxes This is so even if your mother cannot or does not claim the EIC. Filing previous years taxes Child of person not required to file a return. Filing previous years taxes   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you met 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. Filing previous years taxes Example 1—return not required. Filing previous years taxes 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. Filing previous years taxes As a result, you are not your mother's qualifying child. Filing previous years taxes You can claim the EIC if you meet all the other requirements to do so. Filing previous years taxes Example 2—return filed to get refund of tax withheld. Filing previous years taxes The facts are the same as in Example 1 except your mother had wages of $1,500 and had income tax withheld from her wages. Filing previous years taxes She files a return only to get a refund of the income tax withheld and does not claim the EIC or any other tax credits or deductions. Filing previous years taxes As a result, you are not your mother's qualifying child. Filing previous years taxes You can claim the EIC if you meet all the other requirements to do so. Filing previous years taxes Example 3—return filed to get EIC. Filing previous years taxes The facts are the same as in Example 2 except your mother claimed the EIC on her return. Filing previous years taxes Since she filed the return to get the EIC, she is not filing it only to get a refund of income tax withheld. Filing previous years taxes As a result, you are your mother's qualifying child. Filing previous years taxes You cannot claim the EIC. Filing previous years taxes Chapter 3—Rules If You Do Not Have a Qualifying Child Use this chapter if you do not have a qualifying child and have met all the rules in chapter 1. Filing previous years taxes This chapter discusses Rules 11 through 14. Filing previous years taxes You must meet all four of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned income credit without a qualifying child. Filing previous years taxes You can file Form 1040, Form 1040A, or Form 1040EZ to claim the EIC without a qualifying child. Filing previous years taxes If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find out what to do next. Filing previous years taxes If you have a qualifying child. Filing previous years taxes   If you meet Rule 8, you have a qualifying child. Filing previous years taxes If you meet Rule 8 and do not claim the EIC with a qualifying child, you cannot claim the EIC without a qualifying child. Filing previous years taxes Rule 11—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. Filing previous years taxes 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. Filing previous years taxes It does not matter which spouse meets the age test, as long as one of the spouses does. Filing previous years taxes You meet the age test if you were born after December 31, 1948, and before January 2, 1989. Filing previous years taxes 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. Filing previous years taxes If neither you nor your spouse meets the age test, you cannot claim the EIC. Filing previous years taxes Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Filing previous years taxes Death of spouse. Filing previous years taxes   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. Filing previous years taxes Example 1. Filing previous years taxes You are age 28 and unmarried. Filing previous years taxes You meet the age test. Filing previous years taxes Example 2—spouse meets age test. Filing previous years taxes You are married and filing a joint return. Filing previous years taxes You are age 23 and your spouse is age 27. Filing previous years taxes You meet the age test because your spouse is at least age 25 but under age 65. Filing previous years taxes Example 3—spouse dies in 2013. Filing previous years taxes You are married and filing a joint return with your spouse who died in August 2013. Filing previous years taxes You are age 67. Filing previous years taxes Your spouse would have become age 65 in November 2013. Filing previous years taxes Because your spouse was under age 65 when she died, you meet the age test. Filing previous years taxes Rule 12—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. Filing previous years taxes 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. Filing previous years taxes If you are not sure whether someone else can claim you as a dependent, get Publication 501 and read the rules for claiming a dependent. Filing previous years taxes If someone else can claim you as a dependent on his or her return, but does not, you still cannot claim the credit. Filing previous years taxes Example 1. Filing previous years taxes In 2013, you were age 25, single, and living at home with your parents. Filing previous years taxes You worked and were not a student. Filing previous years taxes You earned $7,500. Filing previous years taxes Your parents cannot claim you as a dependent. Filing previous years taxes 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. Filing previous years taxes You meet this rule. Filing previous years taxes You can claim the EIC if you meet all the other requirements. Filing previous years taxes Example 2. Filing previous years taxes The facts are the same as in Example 1, except that you earned $2,000. Filing previous years taxes Your parents can claim you as a dependent but decide not to. Filing previous years taxes You do not meet this rule. Filing previous years taxes You cannot claim the credit because your parents could have claimed you as a dependent. Filing previous years taxes Joint returns. Filing previous years taxes   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. Filing previous years taxes   However, another person may be able to claim you as a dependent if you and your spouse file a joint return merely to claim a refund of income tax withheld or estimated tax paid. Filing previous years taxes But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. Filing previous years taxes Example 1—return filed to get refund of tax withheld. Filing previous years taxes You are 26 years old. Filing previous years taxes You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. Filing previous years taxes Neither you nor your wife is required to file a tax return. Filing previous years taxes You do not have a child. Filing previous years taxes Taxes were taken out of your pay so you file a joint return only to get a refund of the withheld taxes. Filing previous years taxes Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. Filing previous years taxes They can claim exemptions for you and your wife if all the other tests to do so are met. Filing previous years taxes Example 2—return filed to get EIC. Filing previous years taxes The facts are the same as in Example 1except no taxes were taken out of your pay. Filing previous years taxes 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. Filing previous years taxes Because claiming the EIC is your reason for filing the return, you are not filing it only to claim a refund of income tax withheld or estimated tax paid. Filing previous years taxes Your parents cannot claim an exemption for either you or your wife. Filing previous years taxes Rule 13—You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Filing previous years taxes ) if all of the following statements are true. Filing previous years taxes You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Filing previous years taxes Or, you are that person's brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Filing previous years taxes 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. Filing previous years taxes You lived with that person in the United States for more than half of the year. Filing previous years taxes 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). Filing previous years taxes For more details about the tests to be a qualifying child, see Rule 8. Filing previous years taxes If you are a qualifying child of another taxpayer, you cannot claim the EIC. Filing previous years taxes 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. Filing previous years taxes Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Filing previous years taxes Example. Filing previous years taxes You lived with your mother all year. Filing previous years taxes You are age 26, unmarried, and permanently and totally disabled. Filing previous years taxes Your only income was from a community center where you went three days a week to answer telephones. Filing previous years taxes You earned $5,000 for the year and provided more than half of your own support. Filing previous years taxes Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. Filing previous years taxes She can claim the EIC if she meets all the other requirements. Filing previous years taxes Because you are a qualifying child of your mother, you cannot claim the EIC. Filing previous years taxes This is so even if your mother cannot or does not claim the EIC. Filing previous years taxes Joint returns. Filing previous years taxes   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. Filing previous years taxes   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return merely to claim a refund of income tax withheld or estimated tax paid. Filing previous years taxes But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. Filing previous years taxes Child of person not required to file a return. Filing previous years taxes   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. Filing previous years taxes Example 1—return not required. Filing previous years taxes You lived all year with your father. Filing previous years taxes You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. Filing previous years taxes You have no other income, no children, and provided more than half of your own support. Filing previous years taxes Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Filing previous years taxes As a result, you are not your father's qualifying child. Filing previous years taxes You can claim the EIC if you meet all the other requirements to do so. Filing previous years taxes Example 2—return filed to get refund of tax withheld. Filing previous years taxes The facts are the same as in Example 1 except your father had wages of $1,500 and had income tax withheld from his wages. Filing previous years taxes He files a return only to get a refund of the income tax withheld and does not claim the EIC or any other tax credits or deductions. Filing previous years taxes As a result, you are not your father's qualifying child. Filing previous years taxes You can claim the EIC if you meet all the other requirements to do so. Filing previous years taxes Example 3—return filed to get EIC. Filing previous years taxes The facts are the same as in Example 2 except your father claimed the EIC on his return. Filing previous years taxes Since he filed the return to get the EIC, he is not filing it only to get a refund of income tax withheld. Filing previous years taxes As a result, you are your father's qualifying child. Filing previous years taxes You cannot claim the EIC. Filing previous years taxes Rule 14—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. Filing previous years taxes If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Filing previous years taxes United States. Filing previous years taxes   This means the 50 states and the District of Columbia. Filing previous years taxes It does not include Puerto Rico or U. Filing previous years taxes S. Filing previous years taxes possessions such as Guam. Filing previous years taxes Homeless shelter. Filing previous years taxes   Your home can be any location where you regularly live. Filing previous years taxes You do not need a traditional home. Filing previous years taxes If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. Filing previous years taxes Military personnel stationed outside the United States. Filing previous years taxes   U. Filing previous years taxes S. Filing previous years taxes military personnel stationed outside the United States on extended active duty (defined in chapter 2) are considered to live in the United States during that duty period for purposes of the EIC. Filing previous years taxes Chapter 4—Figuring and Claiming the EIC You must meet one more rule to claim the EIC. Filing previous years taxes You need to know the amount of your earned income to see if you meet the rule in this chapter. Filing previous years taxes You also need to know that amount to figure your EIC. Filing previous years taxes Rule 15—Earned Income Limits 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. Filing previous years taxes Earned Income Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Filing previous years taxes Employee pay is earned income only if it is taxable. Filing previous years taxes Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Filing previous years taxes But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Filing previous years taxes Earned income is explained in detail in Rule 7 in chapter 1. Filing previous years taxes Figuring earned income. Filing previous years taxes   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. Filing previous years taxes   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. Filing previous years taxes   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). Filing previous years taxes You will then reduce that amount by any amount included on that line and described in the following list. Filing previous years taxes Scholarship or fellowship grants not reported on a Form W-2. Filing previous years taxes 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. Filing previous years taxes Inmate's income. Filing previous years taxes Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. Filing previous years taxes This includes amounts received for work performed while in a work release program or while in a halfway house. Filing previous years taxes 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). Filing previous years taxes Pension or annuity from deferred compensation plans. Filing previous years taxes 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. Filing previous years taxes 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). Filing previous years taxes This amount may be reported in box 11 of your Form W-2. Filing previous years taxes If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or an annuity. Filing previous years taxes Clergy. Filing previous years taxes   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 re