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

Written Testimony of IRS Commissioner John A. Koskinen before the House Oversight and Government Reform Committee on IRS Operations
March 26, 2014 — Commissioner Koskinen's written testimony before the House Oversight and Government Reform Committee on IRS operations.

Remarks of Acting Commissioner Werfel to the American Institute of Certified Public Accountants in Washington, DC
Nov. 5, 2013 — Prepared remarks of Acting Commissioner Danny Werfel to the American Institute of Certified Public Accountants in Washington, DC.

Oral Statement of Danny Werfel, Principal Deputy Commissioner, on the Affordable Care Act Before the House Ways and Means Committee
Aug. 1, 2013 — Principal Deputy Commissioner Danny Werfel gives an opening statement on the Affordable Care Act to the House Ways and Means Committee.

Prepared Remarks of Danny Werfel, Principal Deputy Commissioner, Before the 2013 IRS Nationwide Tax Forum
July 30, 2013 — IRS Principal Deputy Commissioner Danny Werfel speaks at a 2013 Nationwide Tax Forum taking place in Dallas, Tex.

Page Last Reviewed or Updated: 27-Mar-2014

The Filing Taxes For Free

Filing taxes for free Publication 559 - Main Content Table of Contents Personal RepresentativeDuties Fees Received by Personal Representatives Final Income Tax Return for Decedent—Form 1040Name, Address, and Signature When and Where To File Filing Requirements Income To Include Exemptions and Deductions Credits, Other Taxes, and Payments Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Filing Reminders Other Tax InformationTax Benefits for Survivors Income in Respect of a Decedent Deductions in Respect of a Decedent Estate Tax Deduction Gifts, Insurance, and Inheritances Other Items of Income Income Tax Return of an Estate— Form 1041Filing Requirements Income To Include Exemption and Deductions Credits, Tax, and Payments Name, Address, and Signature When and Where To File Distributions to BeneficiariesIncome That Must Be Distributed Currently Other Amounts Distributed Discharge of a Legal Obligation Character of Distributions How and When To Report Bequest Termination of Estate Estate and Gift TaxesApplicable Credit Amount Gift Tax Estate Tax Generation-Skipping Transfer Tax Comprehensive ExampleFinal Return for Decedent—Form 1040 Income Tax Return of an Estate—Form 1041 How To Get Tax HelpLow Income Taxpayer Clinics Personal Representative A personal representative of an estate is an executor, administrator, or anyone who is in charge of the decedent's property. Filing taxes for free Generally, an executor (or executrix) is named in a decedent's will to administer the estate and distribute properties as the decedent has directed. Filing taxes for free An administrator (or administratrix) is usually appointed by the court if no will exists, if no executor was named in the will, or if the named executor cannot or will not serve. Filing taxes for free In general, an executor and an administrator perform the same duties and have the same responsibilities. Filing taxes for free For estate tax purposes, if there is no executor or administrator appointed, qualified, and acting within the United States, the term “executor” includes anyone in actual or constructive possession of any property of the decedent. Filing taxes for free It includes, among others, the decedent's agents and representatives; safe-deposit companies, warehouse companies, and other custodians of property in this country; brokers holding securities of the decedent as collateral; and the debtors of the decedent who are in this country. Filing taxes for free Duties The primary duties of a personal representative are to collect all the decedent's assets, pay his or her creditors, and distribute the remaining assets to the heirs or other beneficiaries. Filing taxes for free The personal representative also must perform the following duties. Filing taxes for free Apply for an employer identification number (EIN) for the estate. Filing taxes for free File all tax returns, including income, estate and gift tax returns, when due. Filing taxes for free Pay the tax determined up to the date of discharge from duties. Filing taxes for free Other duties of the personal representative in federal tax matters are discussed in other sections of this publication. Filing taxes for free If any beneficiary is a nonresident alien, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for information on the personal representative's duties as a withholding agent. Filing taxes for free Penalty. Filing taxes for free   There is a penalty for failure to file a tax return when due unless the failure is due to reasonable cause. Filing taxes for free Reliance on an agent (attorney, accountant, etc. Filing taxes for free ) is not reasonable cause for late filing. Filing taxes for free It is the personal representative's duty to file the returns for the decedent and the estate when due. Filing taxes for free Identification number. Filing taxes for free   The first action you should take if you are the personal representative for the decedent is to apply for an EIN for the estate. Filing taxes for free You should apply for this number as soon as possible because you need to enter it on returns, statements, and other documents you file concerning the estate. Filing taxes for free You also must give the number to payers of interest and dividends and other payers who must file a return concerning the estate. Filing taxes for free   You can get an EIN by applying online at www. Filing taxes for free irs. Filing taxes for free gov (click on "Apply for an EIN Online" under the Tools heading). Filing taxes for free Generally, if you apply online, you will receive your EIN immediately upon completing the application. Filing taxes for free You can also apply using Form SS-4, Application for Employer Identification Number. Filing taxes for free Generally, if you apply by mail, it takes about 4 weeks to get your EIN. Filing taxes for free See the form instructions for other ways to apply. Filing taxes for free   Payers of interest and dividends report amounts on Forms 1099 using the identification number of the person to whom the account is payable. Filing taxes for free After a decedent's death, Forms 1099 must reflect the identification number of the estate or beneficiary to whom the amounts are payable. Filing taxes for free As the personal representative handling the estate, you must furnish this identification number to the payer. Filing taxes for free For example, if interest is payable to the estate, the estate's EIN must be provided to the payer and used to report the interest on Form 1099-INT, Interest Income. Filing taxes for free If the interest is payable to a surviving joint owner, the survivor's identification number, such as an SSN or ITIN, must be provided to the payer and used to report the interest. Filing taxes for free   If the estate or a survivor may receive interest or dividends after you inform the payer of the decedent's death, the payer should give you (or the survivor) a Form W-9, Request for Taxpayer Identification Number and Certification (or a similar substitute form). Filing taxes for free Complete this form to inform the payer of the estate's (or if completed by the survivor, the survivor's) identification number and return it to the payer. Filing taxes for free    Do not use the deceased individual's identifying number to file an individual income tax return after the decedent's final tax return. Filing taxes for free Also do not use it to make estimated tax payments for a tax year after the year of death. Filing taxes for free Penalty. Filing taxes for free   If you do not include the EIN or the taxpayer identification number of another person where it is required on a return, statement, or other document, you are liable for a penalty for each failure, unless you can show reasonable cause. Filing taxes for free You also are liable for a penalty if you do not give the taxpayer identification number of another person when required on a return, statement, or other document. Filing taxes for free Notice of fiduciary relationship. Filing taxes for free   The term fiduciary means any person acting for another person. Filing taxes for free It applies to persons who have positions of trust on behalf of others. Filing taxes for free A personal representative for a decedent's estate is a fiduciary. Filing taxes for free Form 56. Filing taxes for free   If you are appointed to act in a fiduciary capacity for another, you must file a written notice with the IRS stating this. Filing taxes for free Form 56, Notice Concerning Fiduciary Relationship, is used for this purpose. Filing taxes for free See the Instructions for Form 56 for filing requirements and other information. Filing taxes for free   File Form 56 as soon as all the necessary information (including the EIN) is available. Filing taxes for free It notifies the IRS that you, as the fiduciary, are assuming the powers, rights, duties, and privileges of the decedent. Filing taxes for free The notice remains in effect until you notify the IRS (by filing another Form 56) that your fiduciary relationship with the estate has terminated. Filing taxes for free Termination of fiduciary relationship. Filing taxes for free   Form 56 should also be filed to notify the IRS if your fiduciary relationship is terminated or when a successor fiduciary is appointed if the estate has not been terminated. Filing taxes for free See Form 56 and its instructions for more information. Filing taxes for free   At the time of termination of the fiduciary relationship, you may want to file Form 4810, Request for Prompt Assessment Under Internal Revenue Code Section 6501(d), and Form 5495, Request for Discharge From Personal Liability Under Internal Revenue Code Section 2204 or 6905, to wind up your duties as fiduciary. Filing taxes for free See below for a discussion of these forms. Filing taxes for free Request for prompt assessment (charge) of tax. Filing taxes for free   The IRS ordinarily has 3 years from the date an income tax return is filed, or its due date, whichever is later, to charge any additional tax due. Filing taxes for free However, as a personal representative, you may request a prompt assessment of tax after the return has been filed. Filing taxes for free This reduces the time for making the assessment to 18 months from the date the written request for prompt assessment was received. Filing taxes for free This request can be made for any tax return (except the estate tax return) of the decedent or the decedent's estate. Filing taxes for free This may permit a quicker settlement of the tax liability of the estate and an earlier final distribution of the assets to the beneficiaries. Filing taxes for free Form 4810. Filing taxes for free   Form 4810 can be used for making this request. Filing taxes for free It must be filed separately from any other document. Filing taxes for free   As the personal representative for the decedent's estate, you are responsible for any additional taxes that may be due. Filing taxes for free You can request prompt assessment of any of the decedent's taxes (other than federal estate taxes) for any years for which the statutory period for assessment is open. Filing taxes for free This applies even though the returns were filed before the decedent's death. Filing taxes for free Failure to report income. Filing taxes for free   If you or the decedent failed to report substantial amounts of gross income (more than 25% of the gross income reported on the return) or filed a false or fraudulent return, your request for prompt assessment will not shorten the period during which the IRS may assess the additional tax. Filing taxes for free However, such a request may relieve you of personal liability for the tax if you did not have knowledge of the unpaid tax. Filing taxes for free Request for discharge from personal liability for tax. Filing taxes for free   An executor can make a request for discharge from personal liability for a decedent's income, gift, and estate taxes. Filing taxes for free The request must be made after the returns for those taxes are filed. Filing taxes for free To make the request, file Form 5495. Filing taxes for free For this purpose, an executor is an executor or administrator that is appointed, qualified, and acting within the United States. Filing taxes for free   Within 9 months after receipt of the request, the IRS will notify the executor of the amount of taxes due. Filing taxes for free If this amount is paid, the executor will be discharged from personal liability for any future deficiencies. Filing taxes for free If the IRS has not notified the executor, he or she will be discharged from personal liability at the end of the 9-month period. Filing taxes for free    Even if the executor is discharged from personal liability, the IRS will still be able to assess tax deficiencies against the executor to the extent he or she still has any of the decedent's property. Filing taxes for free Insolvent estate. Filing taxes for free   Generally, if a decedent's estate is insufficient to pay all the decedent's debts, the debts due to the United States must be paid first. Filing taxes for free Both the decedent's federal income tax liabilities at the time of death and the estate's income tax liability are debts due to the United States. Filing taxes for free The personal representative of an insolvent estate is personally responsible for any tax liability of the decedent or of the estate if he or she had notice of such tax obligations or failed to exercise due care in determining if such obligations existed before distribution of the estate's assets and before being discharged from duties. Filing taxes for free The extent of such personal responsibility is the amount of any other payments made before paying the debts due to the United States, except where such other debt paid has priority over the debts due to the United States. Filing taxes for free Income tax liabilities need not be formally assessed for the personal representative to be liable if he or she was aware or should have been aware of their existence. Filing taxes for free Fees Received by Personal Representatives All personal representatives must include fees paid to them from an estate in their gross income. Filing taxes for free If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on your Form 1040, line 21. Filing taxes for free If you are in the trade or business of being an executor, report fees received from the estate as self-employment income on Schedule C or Schedule C-EZ of your Form 1040. Filing taxes for free If the estate operates a trade or business and you, as executor, actively participate in the trade or business while fulfilling your duties, any fees you receive related to the operation of the trade or business must be reported as self-employment income on Schedule C (or Schedule C-EZ) of your Form 1040. Filing taxes for free Final Income Tax Return for Decedent—Form 1040 The personal representative (defined earlier) must file the final income tax return (Form 1040) of the decedent for the year of death and any returns not filed for preceding years. Filing taxes for free A surviving spouse, under certain circumstances, may have to file the returns for the decedent. Filing taxes for free See Joint Return, later. Filing taxes for free Return for preceding year. Filing taxes for free   If an individual died after the close of the tax year, but before the return for that year was filed, the return for the year just closed will not be the final return. Filing taxes for free The return for that year will be a regular return and the personal representative must file it. Filing taxes for free Example. Filing taxes for free Samantha Smith died on March 21, 2013, before filing her 2012 tax return. Filing taxes for free Her personal representative must file her 2012 return by April 15, 2013. Filing taxes for free Her final tax return covering the period from January 1, 2013, to March 20, 2013, is due April 15, 2014. Filing taxes for free Name, Address, and Signature Write the word “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Filing taxes for free If filing a joint return, write the name and address of the decedent and the surviving spouse in the name and address fields. Filing taxes for free If a joint return is not being filed, write the decedent's name in the name field and the personal representative's name and address in the address field. Filing taxes for free Third party designee. Filing taxes for free   You can check the “Yes” box in the Third Party Designee area on page 2 of the return to authorize the IRS to discuss the return with a friend, family member, or any other person you choose. Filing taxes for free This allows the IRS to call the person you identified as the designee to answer any questions that may arise during the processing of the return. Filing taxes for free It also allows the designee to perform certain actions. Filing taxes for free See the Instructions for Form 1040 for details. Filing taxes for free Signature. Filing taxes for free   If a personal representative has been appointed, that person must sign the return. Filing taxes for free If it is a joint return, the surviving spouse must also sign it. Filing taxes for free If no personal representative has been appointed, the surviving spouse (on a joint return) signs the return and writes in the signature area “Filing as surviving spouse. Filing taxes for free ” If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Filing taxes for free ” Paid preparer. Filing taxes for free   If you pay someone to prepare, assist in preparing, or review the tax return, that person must sign the return and fill in the other blanks in the Paid Preparer Use Only area of the return. Filing taxes for free See the Form 1040 instructions for details. Filing taxes for free When and Where To File The final income tax return is due at the same time the decedent's return would have been due had death not occurred. Filing taxes for free A final return for a decedent who was a calendar year taxpayer is generally due on April 15 following the year of death, regardless of when during that year death occurred. Filing taxes for free However, when the due date falls on a Saturday, Sunday, or legal holiday, the return is filed timely if filed by the next business day. Filing taxes for free The tax return must be prepared for the year of death regardless of when during the year death occurred. Filing taxes for free Generally, you must file the final income tax return of the decedent with the Internal Revenue Service Center for the place where you live. Filing taxes for free A tax return for a decedent can be electronically filed. Filing taxes for free A personal representative may also obtain an income tax filing extension on behalf of a decedent. Filing taxes for free Filing Requirements The gross income, age, and filing status of a decedent generally determine whether a return must be filed. Filing taxes for free Gross income is all income received by an individual from any source in the form of money, goods, property, and services that is not tax-exempt. Filing taxes for free It includes gross receipts from self-employment, but if the business involves manufacturing, merchandising, or mining, subtract any cost of goods sold. Filing taxes for free In general, filing status depends on whether the decedent was considered single or married at the time of death. Filing taxes for free See the income tax return instructions or Publication 501, Exemptions, Standard Deduction, and Filing Information. Filing taxes for free Refund A return must be filed to obtain a refund if tax was withheld from salaries, wages, pensions, or annuities, or if estimated tax was paid, even if a return is not otherwise required to be filed. Filing taxes for free Also, the decedent may be entitled to other credits that result in a refund. Filing taxes for free These advance payments of tax and credits are discussed later under Credits, Other Taxes, and Payments. Filing taxes for free Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. Filing taxes for free   Form 1310 does not have to be filed if you are claiming a refund and you are: A surviving spouse filing an original or amended joint return with the decedent, or A court-appointed or certified personal representative filing the decedent’s original return and a copy of the court certificate showing your appointment is attached to the return. Filing taxes for free   If the personal representative is filing a claim for refund on Form 1040X, Amended U. Filing taxes for free S. Filing taxes for free Individual Income Tax Return, or Form 843, Claim for Refund and Request for Abatement, and the court certificate has already been filed with the IRS, attach Form 1310 and write “Certificate Previously Filed” at the bottom of the form. Filing taxes for free Example. Filing taxes for free Edward Green died before filing his tax return. Filing taxes for free You were appointed the personal representative for Edward's estate, and you file his Form 1040 showing a refund due. Filing taxes for free You do not need Form 1310 to claim the refund if you attach a copy of the court certificate showing you were appointed the personal representative. Filing taxes for free    If you are a surviving spouse and you receive a tax refund check in both your name and your deceased spouse's name, you can have the check reissued in your name alone. Filing taxes for free Return the joint-name check marked “VOID” to your local IRS office or the service center where you mailed your return, along with a written request for reissuance of the refund check. Filing taxes for free A new check will be issued in your name and mailed to you. Filing taxes for free Death certificate. Filing taxes for free   When filing the decedent's final income tax return, do not attach the death certificate or other proof of death to the final return. Filing taxes for free Instead, keep it for your records and provide it if requested. Filing taxes for free Nonresident Alien If the decedent was a nonresident alien who would have had to file Form 1040NR, U. Filing taxes for free S. Filing taxes for free Nonresident Alien Income Tax Return, you must file that form for the decedent's final tax year. Filing taxes for free See the Instructions for Form 1040NR for the filing requirements, due date, and where to file. Filing taxes for free Joint Return Generally, the personal representative and the surviving spouse can file a joint return for the decedent and the surviving spouse. Filing taxes for free However, the surviving spouse alone can file the joint return if no personal representative has been appointed before the due date for filing the final joint return for the year of death. Filing taxes for free This also applies to the return for the preceding year if the decedent died after the close of the preceding tax year and before filing the return for that year. Filing taxes for free The income of the decedent that was includible on his or her return for the year up to the date of death (see Income To Include, later) and the income of the surviving spouse for the entire year must be included in the final joint return. Filing taxes for free A final joint return with the decedent cannot be filed if the surviving spouse remarried before the end of the year of the decedent's death. Filing taxes for free The filing status of the decedent in this instance is married filing a separate return. Filing taxes for free For information about tax benefits to which a surviving spouse may be entitled, see Tax Benefits for Survivors, later, under Other Tax Information. Filing taxes for free Personal representative may revoke joint return election. Filing taxes for free   A court-appointed personal representative may revoke an election to file a joint return previously made by the surviving spouse alone. Filing taxes for free This is done by filing a separate return for the decedent within one year from the due date of the return (including any extensions). Filing taxes for free The joint return made by the surviving spouse will then be regarded as the separate return of that spouse by excluding the decedent's items and refiguring the tax liability. Filing taxes for free Relief from joint liability. Filing taxes for free   In some cases, one spouse may be relieved of joint liability for tax, interest, and penalties on a joint return for items of the other spouse that were incorrectly reported on the joint return. Filing taxes for free If the decedent qualified for this relief while alive, the personal representative can pursue an existing request, or file a request, for relief from joint liability. Filing taxes for free For information on requesting this relief, see Publication 971, Innocent Spouse Relief. Filing taxes for free Income To Include The decedent's income includible on the final return is generally determined as if the person were still alive except that the taxable period is usually shorter because it ends on the date of death. Filing taxes for free The method of accounting regularly used by the decedent before death also determines the income includible on the final return. Filing taxes for free This section explains how some types of income are reported on the final return. Filing taxes for free For more information about accounting methods, see Publication 538, Accounting Periods and Methods. Filing taxes for free Cash Method If the decedent accounted for income under the cash method, only those items actually or constructively received before death are included on the final return. Filing taxes for free Constructive receipt of income. Filing taxes for free   Interest from coupons on the decedent's bonds is constructively received by the decedent if the coupons matured in the decedent's final tax year, but had not been cashed. Filing taxes for free Include the interest income on the final return. Filing taxes for free   Generally, a dividend is considered constructively received if it was available for use by the decedent without restriction. Filing taxes for free If the corporation customarily mailed its dividend checks, the dividend was includible when received. Filing taxes for free If the individual died between the time the dividend was declared and the time it was received in the mail, the decedent did not constructively receive it before death. Filing taxes for free Do not include the dividend in the final return. Filing taxes for free Accrual Method Generally, under an accrual method of accounting, income is reported when earned. Filing taxes for free If the decedent used an accrual method, only the income items normally accrued before death are included on the final return. Filing taxes for free Interest and Dividend Income (Forms 1099) Form(s) 1099 reporting interest and dividends earned by the decedent before death should be received and the amounts included on the decedent's final return. Filing taxes for free A separate Form 1099 should show the interest and dividends earned after the date of the decedent's death and paid to the estate or other recipient that must include those amounts on its return. Filing taxes for free You can request corrected Forms 1099 if these forms do not properly reflect the right recipient or amounts. Filing taxes for free For example, a Form 1099-INT, reporting interest payable to the decedent, may include income that should be reported on the final income tax return of the decedent, as well as income that the estate or other recipient should report, either as income earned after death or as income in respect of the decedent (discussed later). Filing taxes for free For income earned after death, you should ask the payer for a Form 1099 that properly identifies the recipient (by name and identification number) and the proper amount. Filing taxes for free If that is not possible, or if the form includes an amount that represents income in respect of the decedent, report the interest as shown next under How to report. Filing taxes for free See U. Filing taxes for free S. Filing taxes for free savings bonds acquired from decedent under Income in Respect of a Decedent, later, for information on savings bond interest that may have to be reported on the final return. Filing taxes for free How to report. Filing taxes for free   If you are preparing the decedent's final return and you have received a Form 1099-INT for the decedent that includes amounts belonging to the decedent and to another recipient (the decedent's estate or another beneficiary), report the total interest shown on Form 1099-INT on Schedule B (Form 1040A or 1040), Interest and Ordinary Dividends. Filing taxes for free Next, enter a subtotal of the interest shown on Forms 1099, and the interest reportable from other sources for which you did not receive Forms 1099. Filing taxes for free Then, show any interest (including any interest you receive as a nominee) belonging to another recipient separately and subtract it from the subtotal. Filing taxes for free Identify the amount of this adjustment as “Nominee Distribution” or other appropriate designation. Filing taxes for free   Report dividend income for which you received a Form 1099-DIV, Dividends and Distributions, on the appropriate schedule using the same procedure. Filing taxes for free    Note. Filing taxes for free If the decedent received amounts as a nominee, you must give the actual owner a Form 1099, unless the owner is the decedent's spouse. Filing taxes for free See General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G) for more information on filing Forms 1099. Filing taxes for free Partnership Income The death of a partner closes the partnership's tax year for that partner. Filing taxes for free Generally, it does not close the partnership's tax year for the remaining partners. Filing taxes for free The decedent's distributive share of partnership items must be figured as if the partnership's tax year ended on the date the partner died. Filing taxes for free To avoid an interim closing of the partnership books, the partners can agree to estimate the decedent's distributive share by prorating the amounts the partner would have included for the entire partnership tax year. Filing taxes for free On the decedent's final return, include the decedent's distributive share of partnership items for the following periods. Filing taxes for free The partnership's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Filing taxes for free The period, if any, from the end of the partnership's tax year in (1) to the decedent's date of death. Filing taxes for free Example. Filing taxes for free Mary Smith was a partner in XYZ partnership and reported her income on a tax year ending December 31. Filing taxes for free The partnership uses a tax year ending June 30. Filing taxes for free Mary died August 31, 2013, and her estate established its tax year through August 31. Filing taxes for free The distributive share of partnership items based on the decedent's partnership interest is reported as follows. Filing taxes for free Final Return for the Decedent—January 1 through August 31, 2013, includes XYZ partnership items from (a) the partnership tax year ending June 30, 2013, and (b) the partnership tax year beginning July 1, 2013, and ending August 31, 2013 (the date of death). Filing taxes for free Income Tax Return of the Estate—September 1, 2013, through August 31, 2014, includes XYZ partnership items for the period September 1, 2013, through June 30, 2014. Filing taxes for free S Corporation Income If the decedent was a shareholder in an S corporation, include on the final return the decedent's share of the S corporation's items of income, loss, deduction, and credit for the following periods. Filing taxes for free The corporation's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Filing taxes for free The period, if any, from the end of the corporation's tax year in (1) to the decedent's date of death. Filing taxes for free Self-Employment Income Include self-employment income actually or constructively received or accrued, depending on the decedent's accounting method. Filing taxes for free For self-employment tax purposes only, the decedent's self-employment income will include the decedent's distributive share of a partnership's income or loss through the end of the month in which death occurred. Filing taxes for free For this purpose, the partnership's income or loss is considered to be earned ratably over the partnership's tax year. Filing taxes for free Community Income If the decedent was married and domiciled in a community property state, half of the income received and half of the expenses paid during the decedent's tax year by either the decedent or spouse may be considered to be the income and expenses of the other. Filing taxes for free For more information, see Publication 555, Community Property. Filing taxes for free HSA, Archer MSA, or Medicare Advantage MSA The treatment of an HSA (health savings account), an Archer MSA (medical savings account), or a Medicare Advantage MSA at the death of the account holder, depends on who acquires the interest in the account. Filing taxes for free If the decedent's estate acquires the interest, the fair market value (FMV) of the assets in the account on the date of death is included in income on the decedent's final return. Filing taxes for free The estate tax deduction, discussed later, does not apply to this amount. Filing taxes for free If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Filing taxes for free For other information on HSAs, Archer MSAs, or Medicare Advantage MSAs, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. Filing taxes for free Coverdell Education Savings Account (ESA) Generally, the balance in a Coverdell ESA must be distributed within 30 days after the individual for whom the account was established reaches age 30, or dies, whichever is earlier. Filing taxes for free The treatment of the Coverdell ESA at the death of an individual under age 30 depends on who acquires the interest in the account. Filing taxes for free If the decedent's estate acquires the interest, the earnings on the account must be included on the final income tax return of the decedent. Filing taxes for free The estate tax deduction, discussed later, does not apply to this amount. Filing taxes for free If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Filing taxes for free The age 30 limitation does not apply if the individual for whom the account was established or the beneficiary that acquires the account is an individual with special needs. Filing taxes for free This includes an individual who, because of a physical, mental, or emotional condition (including a learning disability), requires additional time to complete his or her education. Filing taxes for free For more information on Coverdell ESAs, see Publication 970, Tax Benefits for Education. Filing taxes for free Accelerated Death Benefits Accelerated death benefits are amounts received under a life insurance contract before the death of the insured individual. Filing taxes for free These benefits also include amounts received on the sale or assignment of the contract to a viatical settlement provider. Filing taxes for free Generally, if the decedent received accelerated death benefits on the life of a terminally or chronically ill individual, whether on his or her own life or on the life of another person, those benefits are not included in the decedent's income. Filing taxes for free For more information, see the discussion under Gifts, Insurance, and Inheritances under Other Tax Information, later. Filing taxes for free Exemptions and Deductions Generally, the rules for exemptions and deductions allowed to an individual also apply to the decedent's final income tax return. Filing taxes for free Show on the final return deductible items the decedent paid (or accrued, if the decedent reported deductions on an accrual method) before death. Filing taxes for free This section contains a detailed discussion of medical expenses because the tax treatment of the decedent's medical expenses can be different. Filing taxes for free See Medical Expenses, later. Filing taxes for free Exemptions You can claim the decedent's personal exemption on the final income tax return. Filing taxes for free If the decedent was another person's dependent (for example, a parent's), you cannot claim the personal exemption on the decedent's final return. Filing taxes for free Standard Deduction If you do not itemize deductions on the final return, the full amount of the appropriate standard deduction is allowed regardless of the date of death. Filing taxes for free For information on the appropriate standard deduction, see the Form 1040 income tax return instructions or Publication 501. Filing taxes for free Medical Expenses Medical expenses paid before death by the decedent are deductible, subject to limits, on the final income tax return if deductions are itemized. Filing taxes for free This includes expenses for the decedent, as well as for the decedent's spouse and dependents. Filing taxes for free Beginning in 2013, medical expenses exceeding 10% of adjusted gross income (AGI) may be deducted, unless the decedent or their spouse is age 65 or older. Filing taxes for free In that case medical expenses exceeding 7. Filing taxes for free 5% of AGI may be deducted. Filing taxes for free Qualified medical expenses are not deductible if paid with a tax-free distribution from an HSA or an Archer MSA. Filing taxes for free Election for decedent's expenses. Filing taxes for free   Medical expenses not paid before death are liabilities of the estate and are shown on the federal estate tax return (Form 706). Filing taxes for free However, if medical expenses for the decedent are paid out of the estate during the 1-year period beginning with the day after death, you can elect to treat all or part of the expenses as paid by the decedent at the time they were incurred. Filing taxes for free   If you make the election, you can claim all or part of the expenses on the decedent's income tax return (if deductions are itemized) rather than on the federal estate tax return (Form 706). Filing taxes for free You can deduct expenses incurred in the year of death on the final income tax return. Filing taxes for free You should file an amended return (Form 1040X) for medical expenses incurred in an earlier year, unless the statutory period for filing a claim for that year has expired. Filing taxes for free   The amount you can deduct on the income tax return is the amount above 10% of adjusted gross income (or 7. Filing taxes for free 5% of adjusted gross income if the decedent or the decedent's spouse was born before January 2, 1949). Filing taxes for free Amounts not deductible because of this percentage cannot be claimed on the federal estate tax return. Filing taxes for free Making the election. Filing taxes for free   You make the election by attaching a statement, in duplicate, to the decedent's income tax return or amended return. Filing taxes for free The statement must state that you have not claimed the amount as an estate tax deduction, and that the estate waives the right to claim the amount as a deduction. Filing taxes for free This election applies only to expenses incurred for the decedent, not to expenses incurred to provide medical care for dependents. Filing taxes for free Example. Filing taxes for free Richard Brown used the cash method of accounting and filed his income tax return on a calendar year basis. Filing taxes for free Richard died on June 1, 2013, at the age of 78, after incurring $800 in medical expenses. Filing taxes for free Of that amount, $500 was incurred in 2012 and $300 was incurred in 2013. Filing taxes for free Richard itemized his deductions when he filed his 2012 income tax return. Filing taxes for free The personal representative of the estate paid the entire $800 liability in August 2013. Filing taxes for free The personal representative may file an amended return (Form 1040X) for 2012 claiming the $500 medical expense as a deduction, subject to the 7. Filing taxes for free 5% limit. Filing taxes for free The $300 of expenses incurred in 2013 can be deducted on the final income tax return if deductions are itemized, subject to the 7. Filing taxes for free 5% limit. Filing taxes for free The personal representative must file a statement in duplicate with each return stating that these amounts have not been claimed on the federal estate tax return (Form 706), and waiving the right to claim such a deduction on Form 706 in the future. Filing taxes for free Medical expenses not paid by estate. Filing taxes for free   If you paid medical expenses for your deceased spouse or dependent, claim the expenses on your tax return for the year in which you paid them, whether they are paid before or after the decedent's death. Filing taxes for free If the decedent was a child of divorced or separated parents, the medical expenses can usually be claimed by both the custodial and noncustodial parent to the extent paid by that parent during the year. Filing taxes for free Insurance reimbursements. Filing taxes for free   Insurance reimbursements of previously deducted medical expenses due a decedent at the time of death and later received by the decedent's estate are includible in the income tax return of the estate (Form 1041) for the year the reimbursements are received. Filing taxes for free The reimbursements are also includible in the decedent's gross estate. Filing taxes for free No deduction for funeral expenses can be taken on the final Form 1040 of a decedent. Filing taxes for free These expenses may be deductible for estate tax purposes on Form 706. Filing taxes for free Deduction for Losses A decedent's net operating loss deduction from a prior year and any capital losses (including capital loss carryovers) can be deducted only on the decedent's final income tax return. Filing taxes for free A net operating loss on the decedent's final income tax return can be carried back to prior years. Filing taxes for free (See Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Filing taxes for free ) You cannot deduct any unused net operating loss or capital loss on the estate's income tax return. Filing taxes for free At-risk loss limits. Filing taxes for free   Special at-risk rules apply to most activities that are engaged in as a trade or business or for the production of income. Filing taxes for free   These rules limit the deductible loss to the amount which the individual was considered at-risk in the activity. Filing taxes for free An individual generally will be considered at-risk to the extent of the money and the adjusted basis of property that he or she contributed to the activity and certain amounts the individual borrowed for use in the activity. Filing taxes for free An individual will be considered at-risk for amounts borrowed only if he or she was personally liable for the repayment or if the amounts borrowed were secured by property other than that used in the activity. Filing taxes for free The individual is not considered at-risk for borrowed amounts if the lender has an interest in the activity or if the lender is related to a person who has an interest in the activity. Filing taxes for free For more information, see Publication 925, Passive Activity and At-Risk Rules. Filing taxes for free Passive activity rules. Filing taxes for free   A passive activity is any trade or business activity in which the taxpayer does not materially participate. Filing taxes for free To determine material participation, see Publication 925. Filing taxes for free Rental activities are passive activities regardless of the taxpayer's participation, unless the taxpayer meets certain eligibility requirements. Filing taxes for free   Individuals, estates, and trusts can offset passive activity losses only against passive activity income. Filing taxes for free Passive activity losses or credits not allowed in one tax year can be carried forward to the next year. Filing taxes for free   If a passive activity interest is transferred because a taxpayer dies, the accumulated unused passive activity losses are allowed as a deduction against the decedent's income in the year of death. Filing taxes for free Losses are allowed only to the extent they are greater than the excess of the transferee's (recipient of the interest transferred) basis in the property over the decedent's adjusted basis in the property immediately before death. Filing taxes for free The part of the accumulated losses equal to the excess is not allowed as a deduction for any tax year. Filing taxes for free   Use Form 8582, Passive Activity Loss Limitations, to summarize losses and income from passive activities and to figure the amounts allowed. Filing taxes for free For more information, see Publication 925. Filing taxes for free Credits, Other Taxes, and Payments Discussed below are some of the tax credits, types of taxes that may be owed, income tax withheld, and estimated tax payments reported on the final return of a decedent. Filing taxes for free Credits On the final income tax return, you can claim any tax credits that applied to the decedent before death. Filing taxes for free Some of these credits are discussed next. Filing taxes for free Earned income credit. Filing taxes for free   If the decedent was an eligible individual, you can claim the earned income credit on the decedent's final return even though the return covers less than 12 months. Filing taxes for free If the allowable credit is more than the tax liability for the year, the excess is refunded. Filing taxes for free   For more information, see Publication 596, Earned Income Credit (EIC). Filing taxes for free Credit for the elderly or the disabled. Filing taxes for free   This credit is allowable on a decedent's final income tax return if the decedent met both of the following requirements in the year of death. Filing taxes for free The decedent: Was a “qualified individual,” and Had income (adjusted gross income (AGI) and nontaxable social security and pensions) less than certain limits. Filing taxes for free   For details on qualifying for or figuring the credit, see Publication 524, Credit for the Elderly or the Disabled. Filing taxes for free Child tax credit. Filing taxes for free   If the decedent had a qualifying child, you may be able to claim the child tax credit on the decedent's final return even though the return covers less than 12 months. Filing taxes for free You may be able to claim the additional child tax credit and get a refund if the credit is more than the decedent's liability. Filing taxes for free For more information, see the Instructions for Form 1040. Filing taxes for free Adoption credit. Filing taxes for free   Depending upon when the adoption was finalized, this credit may be taken on a decedent's final income tax return if the decedent: Adopted an eligible child and paid qualified adoption expenses, or Has a carryforward of an adoption credit from a prior year. Filing taxes for free   Also, if the decedent is survived by a spouse who meets the filing status of qualifying widow(er), unused adoption credit may be carried forward and used following the death of the decedent. Filing taxes for free See Form 8839, Qualified Adoption Expenses, and its instructions for more details. Filing taxes for free General business tax credit. Filing taxes for free   The general business credit available to a taxpayer is limited. Filing taxes for free Any credit arising in a tax year beginning before 1998 that has not been used up can be carried forward for up to 15 years. Filing taxes for free Any unused credit arising in a tax year beginning after 1997 has a 1-year carryback and a 20-year carryforward period. Filing taxes for free   After the carryforward period, a deduction may be allowed for any unused business credit. Filing taxes for free If the taxpayer dies before the end of the carryforward period, the deduction generally is allowed in the year of death. Filing taxes for free   For more information on the general business credit, see Publication 334, Tax Guide for Small Business. Filing taxes for free Other Taxes Taxes other than income tax that may be owed on the final return of a decedent include self-employment tax and alternative minimum tax, which are reported on Form 1040. Filing taxes for free Self-employment tax. Filing taxes for free   Self-employment tax may be owed on the final return if either of the following applied to the decedent in the year of death: Net earnings from self-employment (excluding income described in (2)) were $400 or more; or Wages from services performed as a church employee were $108. Filing taxes for free 28 or more. Filing taxes for free Alternative minimum tax (AMT). Filing taxes for free   The tax laws give special treatment to certain types of income and allow special deductions and credits for certain types of expenses. Filing taxes for free The alternative minimum tax (AMT) was enacted so taxpayers who benefit from these laws still pay at least a minimum amount of tax. Filing taxes for free In general, the AMT is the excess of the tentative minimum tax over the regular tax shown on the return. Filing taxes for free Form 6251. Filing taxes for free    Use Form 6251, Alternative Minimum Tax—Individuals, to determine if this tax applies to the decedent. Filing taxes for free See the form instructions for information on when you must attach Form 6251 to Form 1040. Filing taxes for free Form 8801. Filing taxes for free   If the decedent paid AMT in a previous year or had a credit carryforward, the decedent may be eligible for a minimum tax credit. Filing taxes for free See Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts. Filing taxes for free Payments of Tax The income tax withheld from the decedent's salary, wages, pensions, or annuities, and the amount paid as estimated tax are credits (advance payments of tax) that must be claimed on the final return. Filing taxes for free Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Income tax liability may be forgiven for a decedent who dies due to service in a combat zone, due to military or terrorist actions, as a result of a terrorist attack, or while serving in the line of duty as an astronaut. Filing taxes for free Combat Zone If a member of the Armed Forces of the United States dies while in active service in a combat zone or from wounds, disease, or injury incurred in a combat zone, the decedent's income tax liability is abated (forgiven) for the entire year in which death occurred and for any prior tax year ending on or after the first day the person served in a combat zone in active service. Filing taxes for free For this purpose, a qualified hazardous duty area is treated as a combat zone. Filing taxes for free If the tax (including interest, additions to the tax, and additional amounts) for these years has been assessed, the assessment will be forgiven. Filing taxes for free If the tax has been collected (regardless of the date of collection), that tax will be credited or refunded. Filing taxes for free Any of the decedent's income tax for tax years before those mentioned above that remains unpaid as of the actual (or presumptive) date of death will not be assessed. Filing taxes for free If any unpaid tax (including interest, additions to the tax, and additional amounts) has been assessed, this assessment will be forgiven. Filing taxes for free Also, if any tax was collected after the date of death, that amount will be credited or refunded. Filing taxes for free The date of death of a member of the Armed Forces reported as missing in action or as a prisoner of war is the date his or her name is removed from missing status for military pay purposes. Filing taxes for free This is true even if death actually occurred earlier. Filing taxes for free For other tax information for members of the Armed Forces, see Publication 3, Armed Forces' Tax Guide. Filing taxes for free Military or Terrorist Actions The decedent's income tax liability is forgiven if, at death, he or she was a military or civilian employee of the United States who died because of wounds or injury incurred: While a U. Filing taxes for free S. Filing taxes for free employee, and In a military or terrorist action. Filing taxes for free The forgiveness applies to the tax year in which death occurred and for any earlier tax year, beginning with the year before the year in which the wounds or injury occurred. Filing taxes for free Example. Filing taxes for free The income tax liability of a civilian employee of the United States who died in 2013 because of wounds incurred while a U. Filing taxes for free S. Filing taxes for free employee in a terrorist attack that occurred in 2008 will be forgiven for 2013 and for all prior tax years in the period 2007 through 2012. Filing taxes for free Refunds are allowed for the tax years for which the period for filing a claim for refund has not ended, as discussed later. Filing taxes for free Military or terrorist action defined. Filing taxes for free   A military or terrorist action means the following. Filing taxes for free Any terrorist activity that most of the evidence indicates was directed against the United States or any of its allies. Filing taxes for free Any military action involving the U. Filing taxes for free S. Filing taxes for free Armed Forces and resulting from violence or aggression against the United States or any of its allies, or the threat of such violence or aggression. Filing taxes for free   Terrorist activity includes criminal offenses intended to coerce, intimidate, or retaliate against the government or civilian population. Filing taxes for free Military action does not include training exercises. Filing taxes for free Any multinational force in which the United States is participating is treated as an ally of the United States. Filing taxes for free Determining if a terrorist activity or military action has occurred. Filing taxes for free   You may rely on published guidance from the IRS to determine if a particular event is considered a terrorist activity or military action. Filing taxes for free Specified Terrorist Victim The Victims of Terrorism Tax Relief Act of 2001 (the Act) provides tax relief for those injured or killed as a result of terrorist attacks, certain survivors of those killed as a result of terrorist attacks, and others who were affected by terrorist attacks. Filing taxes for free Under the Act, the federal income tax liability of those killed in the following attacks (specified terrorist victim) is forgiven for certain tax years. Filing taxes for free The April 19, 1995, terrorist attack on the Alfred P. Filing taxes for free Murrah Federal Building (Oklahoma City). Filing taxes for free The September 11, 2001, terrorist attacks. Filing taxes for free The terrorist attacks involving anthrax occurring after September 10, 2001, and before January 1, 2002. Filing taxes for free The Act also exempts from federal income tax the following types of income. Filing taxes for free Qualified disaster relief payments made after September 10, 2001, to cover personal, family, living, or funeral expenses incurred because of a terrorist attack. Filing taxes for free Certain disability payments received in tax years ending after September 10, 2001, for injuries sustained in a terrorist attack. Filing taxes for free Certain death benefits paid by an employer to the survivor of an employee because the employee died as a result of a terrorist attack. Filing taxes for free Payments from the September 11th Victim Compensation Fund 2001. Filing taxes for free The Act also reduces the estate tax of individuals who die as a result of a terrorist attack. Filing taxes for free See Publication 3920, Tax Relief for Victims of Terrorist Attacks, for more information. Filing taxes for free Astronauts Legislation extended the tax relief available under the Victims of Terrorism Tax Relief Act of 2001 (the Act) to astronauts who died in the line of duty after December 31, 2002. Filing taxes for free The decedent's income tax liability is forgiven for the tax year in which death occurs, and for the tax year prior to death. Filing taxes for free For information on death benefit payments and the reduction of federal estate taxes, see Publication 3920. Filing taxes for free However, the discussions in that publication under Death Benefits and Estate Tax Reduction should be modified for astronauts (for example, by using the date of death of the astronaut instead of September 11, 2001). Filing taxes for free For more information on the Act, see Publication 3920. Filing taxes for free Claim for Credit or Refund If any of these tax-forgiveness situations applies to a prior year tax, any tax paid for which the period for filing a claim has not ended will be credited or refunded. Filing taxes for free If any tax is still due, it will be canceled. Filing taxes for free The normal period for filing a claim for credit or refund is 3 years after the return was filed or 2 years after the tax was paid, whichever is later. Filing taxes for free If death occurred in a combat zone or from wounds, disease, or injury incurred in a combat zone, the period for filing the claim is extended by: The amount of time served in the combat zone (including any period in which the individual was in missing status), plus The period of continuous qualified hospitalization for injury from service in the combat zone, if any, plus The next 180 days. Filing taxes for free Qualified hospitalization means any hospitalization outside the United States and any hospitalization in the United States of not more than 5 years. Filing taxes for free This extended period for filing the claim also applies to a member of the Armed Forces who was deployed outside the United States in a designated contingency operation. Filing taxes for free Filing a claim. Filing taxes for free   Use the following procedures to file a claim. Filing taxes for free If a U. Filing taxes for free S. Filing taxes for free individual income tax return (Form 1040, 1040A, or 1040EZ) has not been filed, you should make a claim for refund of any withheld income tax or estimated tax payments by filing Form 1040. Filing taxes for free Form W-2, Wage and Tax Statement, must accompany all returns. Filing taxes for free If a U. Filing taxes for free S. Filing taxes for free individual income tax return has been filed, you should make a claim for refund by filing Form 1040X. Filing taxes for free You must file a separate Form 1040X for each year in question. Filing taxes for free   You must file these returns and claims at the following address for regular mail (U. Filing taxes for free S. Filing taxes for free Postal Service). Filing taxes for free    Internal Revenue Service 333 W. Filing taxes for free Pershing, P5–6503 Kansas City, MO 64108   Identify all returns and claims for refund by writing “Iraq—KIA,” “Enduring Freedom—KIA,” “Kosovo Operation—KIA,” “Desert Storm—KIA,” or “Former Yugoslavia—KIA” in bold letters on the top of page 1 of the return or claim. Filing taxes for free On the applicable return, write the same phrase on the line for total tax. Filing taxes for free If the individual was killed in a terrorist or military action, put “KITA” on the front of the return and on the line for total tax. Filing taxes for free   Include an attachment showing the computation of the decedent's tax liability and a computation of the amount to be forgiven. Filing taxes for free On joint returns, make an allocation of the tax as described below under Joint returns. Filing taxes for free If you cannot make a proper allocation, attach a statement of all income and deductions allocable to each spouse and the IRS will make the proper allocation. Filing taxes for free   You must attach Form 1310 to all returns and claims for refund. Filing taxes for free However, for exceptions to filing Form 1310, see Form 1310. Filing taxes for free Statement of Person Claiming Refund Due a Deceased Taxpayer, under Refund, earlier. Filing taxes for free   You must also attach proof of death that includes a statement that the individual was a U. Filing taxes for free S. Filing taxes for free employee on the date of injury and on the date of death and died as the result of a military or terrorist action. Filing taxes for free For military and civilian employees of the Department of Defense, attach DD Form 1300, Report of Casualty. Filing taxes for free For other U. Filing taxes for free S. Filing taxes for free civilian employees killed in the United States, attach a death certificate and a certification (letter) from the federal employer. Filing taxes for free For other U. Filing taxes for free S. Filing taxes for free civilian employees killed overseas, attach a certification from the Department of State. Filing taxes for free   If you do not have enough tax information to file a timely claim for refund, you can suspend the period for filing a claim by filing Form 1040X. Filing taxes for free Attach Form 1310, any required documentation currently available, and a statement that you will file an amended claim as soon as you have the required tax information. Filing taxes for free Joint returns. Filing taxes for free   If a joint return was filed, only the decedent's part of the income tax liability is eligible for forgiveness. Filing taxes for free Determine the decedent's tax liability as follows. Filing taxes for free Figure the income tax for which the decedent would have been liable if a separate return had been filed. Filing taxes for free Figure the income tax for which the spouse would have been liable if a separate return had been filed. Filing taxes for free Multiply the joint tax liability by a fraction. Filing taxes for free The numerator of the fraction is the amount in (1), above. Filing taxes for free The denominator of the fraction is the total of (1) and (2). Filing taxes for free   The resulting amount from (3) above is the decedent's tax liability eligible for forgiveness. Filing taxes for free Filing Reminders To minimize the time needed to process the decedent's final return and issue any refund, be sure to follow these procedures. Filing taxes for free Write “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Filing taxes for free If a personal representative has been appointed, the personal representative must sign the return. Filing taxes for free If it is a joint return, the surviving spouse must also sign it. Filing taxes for free If you are the decedent's spouse filing a joint return with the decedent and no personal representative has been appointed, write “Filing as surviving spouse” in the area where you sign the return. Filing taxes for free If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Filing taxes for free ” To claim a refund for the decedent, do the following. Filing taxes for free If you are the decedent's spouse filing a joint return with the decedent, file only the tax return to claim the refund. Filing taxes for free If you are the personal representative and the return is not a joint return filed with the decedent's surviving spouse, file the return and attach a copy of the certificate that shows your appointment by the court. Filing taxes for free (A power of attorney or a copy of the decedent's will is not acceptable evidence of your appointment as the personal representative. Filing taxes for free ) If you are filing an amended return, attach Form 1310 and a copy of the certificate of appointment (or, if you have already sent the certificate of appointment to IRS, write “Certificate Previously Filed” at the bottom of Form 1310). Filing taxes for free If you are not filing a joint return as the surviving spouse and a personal representative has not been appointed, file the return and attach Form 1310. Filing taxes for free Other Tax Information Discussed below is information about the effect of an individual's death on the income tax liability of the survivors (including widows and widowers), the beneficiaries, and the estate. Filing taxes for free Tax Benefits for Survivors Survivors can qualify for certain benefits when filing their own income tax returns. Filing taxes for free Joint return by surviving spouse. Filing taxes for free   A surviving spouse can file a joint return for the year of death and may qualify for special tax rates for the following 2 years, as explained under Qualifying widows and widowers, later. Filing taxes for free Decedent as your dependent. Filing taxes for free   If the decedent qualified as your dependent for a part of the year before death, you can claim the exemption for the dependent on your tax return, regardless of when death occurred during the year. Filing taxes for free   If the decedent was your qualifying child, you may be able to claim the child tax credit or the earned income credit. Filing taxes for free To determine if you qualify for the child tax credit, see the instructions for Form 1040, line 51; Form 1040A, line 33; or Form 1040NR, line 48. Filing taxes for free To determine if you qualify for the earned income credit, see the instructions for Form 1040, lines 64a and 64b or Form 1040A, lines 38a and 38b. Filing taxes for free Qualifying widows and widowers. Filing taxes for free   If your spouse died within the 2 tax years preceding the year for which your return is being filed, you may be eligible to claim the filing status of qualifying widow(er) with dependent child and qualify to use the married-filing-jointly tax rates. Filing taxes for free Requirements. Filing taxes for free   Generally, you qualify for this special benefit if you meet all of the following requirements. Filing taxes for free You were entitled to file a joint return with your spouse for the year of death—whether or not you actually filed jointly. Filing taxes for free You did not remarry before the end of the current tax year. Filing taxes for free You have a child, stepchild, or foster child who qualifies as your dependent for the tax year. Filing taxes for free You provide more than half the cost of maintaining your home, which is the principal residence of that child for the entire year except for temporary absences. Filing taxes for free Example. Filing taxes for free William Burns' wife died in 2010. Filing taxes for free William has not remarried and continued throughout 2011 and 2012 to maintain a home for himself and his dependent child. Filing taxes for free For 2010, he was entitled to file a joint return for himself and his deceased wife. Filing taxes for free For 2011 and 2012, he qualifies to file as a qualifying widower with dependent child. Filing taxes for free For later years, he may qualify to file as a head of household. Filing taxes for free Figuring your tax. Filing taxes for free   Check the box on line 5 (Form 1040 or 1040A) under Filing Status on your tax return. Filing taxes for free Use the Tax Rate Schedule or the column in the Tax Table for Married filing jointly, which gives you the split-income benefits. Filing taxes for free   The last year you can file jointly with, or claim an exemption for, your deceased spouse is the year of death. Filing taxes for free Joint return filing rules. Filing taxes for free   If you are the surviving spouse and a personal representative is handling the estate for the decedent, you should coordinate filing your return for the year of death with this personal representative. Filing taxes for free See Joint Return under Final Income Tax Return for Decedent—Form 1040, earlier. Filing taxes for free Income in Respect of a Decedent All income the decedent would have received had death not occurred that was not properly includible on the final return, discussed earlier, is income in respect of a decedent. Filing taxes for free If the decedent is a specified terrorist victim (see Specified Terrorist Victim, earlier), income received after the date of death and before the end of the decedent's tax year (determined without regard to death) is excluded from the recipient's gross income. Filing taxes for free This exclusion does not apply to certain income. Filing taxes for free For more information, see Publication 3920. Filing taxes for free How To Report Income in respect of a decedent must be included in the income of one of the following. Filing taxes for free The decedent's estate, if the estate receives it. Filing taxes for free The beneficiary, if the right to income is passed directly to the beneficiary and the beneficiary receives it. Filing taxes for free Any person to whom the estate properly distributes the right to receive it. Filing taxes for free If you have to include income in respect of a decedent in your gross income and an estate tax return (Form 706) was filed for the decedent, you may be able to claim a deduction for the estate tax paid on that income. Filing taxes for free See Estate Tax Deduction, later. Filing taxes for free Example 1. Filing taxes for free Frank Johnson owned and operated an apple orchard. Filing taxes for free He used the cash method of accounting. Filing taxes for free He sold and delivered 1,000 bushels of apples to a canning factory for $2,000, but did not receive payment before his death. Filing taxes for free The proceeds from the sale are income in respect of a decedent. Filing taxes for free When the estate was settled, payment had not been made and the estate transferred the right to the payment to his widow. Filing taxes for free When Frank's widow collects the $2,000, she must include that amount in her return. Filing taxes for free It is not reported on the final return of the decedent or on the return of the estate. Filing taxes for free Example 2. Filing taxes for free Assume the same facts as in Example 1, except that Frank used the accrual method of accounting. Filing taxes for free The amount accrued from the sale of the apples would be included on his final return. Filing taxes for free Neither the estate nor the widow would realize income in respect of a decedent when the money is later paid. Filing taxes for free Example 3. Filing taxes for free On February 1, George High, a cash method taxpayer, sold his tractor for $3,000, payable March 1 of the same year. Filing taxes for free His adjusted basis in the tractor was $2,000. Filing taxes for free George died on February 15, before receiving payment. Filing taxes for free The gain to be reported as income in respect of a decedent is the $1,000 difference between the decedent's basis in the property and the sale proceeds. Filing taxes for free In other words, the income in respect of a decedent is the gain the decedent would have realized had he lived. Filing taxes for free Example 4. Filing taxes for free Cathy O'Neil was entitled to a large salary payment at the date of her death. Filing taxes for free The amount was to be paid in five annual installments. Filing taxes for free The estate, after collecting two installments, distributed the right to the remaining installments to you, the beneficiary. Filing taxes for free The payments are income in respect of a decedent. Filing taxes for free None of the payments were includible on Cathy's final return. Filing taxes for free The estate must include in its income the two installments it received, and you must include in your income each of the three installments as you receive them. Filing taxes for free Example 5. Filing taxes for free You inherited the right to receive renewal commissions on life insurance sold by your father before his death. Filing taxes for free You inherited the right from your mother, who acquired it by bequest from your father. Filing taxes for free Your mother died before she received all the commissions she had the right to receive, so you received the rest. Filing taxes for free The commissions are income in respect of a decedent. Filing taxes for free None of these commissions were includible in your father's final return. Filing taxes for free The commissions received by your mother were included in her income. Filing taxes for free The commissions you received are not includible in your mother's income, even on her final return. Filing taxes for free You must include them in your income. Filing taxes for free Character of income. Filing taxes for free   The character of the income you receive in respect of a decedent remains the same as it would have been to the decedent if he or she were alive. Filing taxes for free If the income would have been a capital gain to the decedent, it will be a capital gain to you. Filing taxes for free Transfer of right to income. Filing taxes for free   If you transfer your right to income in respect of a decedent, you must include in your income the greater of: The amount you receive for the right, or The fair market value of the right you transfer. Filing taxes for free   If you make a gift of such a right, you must include in your income the fair market value of the right at the time of the gift. Filing taxes for free   If the right to income from an installment obligation is transferred, the amount you must include in income is reduced by the basis of the obligation. Filing taxes for free See Installment obligations, later. Filing taxes for free Transfer defined. Filing taxes for free   A transfer for this purpose includes a sale, exchange, or other disposition, the satisfaction of an installment obligation at other than face value, or the cancellation of an installment obligation. Filing taxes for free Installment obligations. Filing taxes for free   If the decedent sold property using the installment method and you are collecting payments on an installment obligation acquired from the decedent, use the same gross profit percentage the decedent used to figure the part of each payment that represents profit. Filing taxes for free Include in your income the same profit the decedent would have included had death not occurred. Filing taxes for free For more information, see Publication 537, Installment Sales. Filing taxes for free   If you dispose of an installment obligation acquired from a decedent (other than by transfer to the obligor), the rules explained in Publication 537 for figuring gain or loss on the disposition apply to you. Filing taxes for free Transfer to obligor. Filing taxes for free   A transfer of a right to income, discussed earlier, has occurred if the decedent (seller) sold property using the installment method and the installment obligation was transferred to the obligor (buyer or person legally obligated to pay the installments). Filing taxes for free A transfer also occurs if the obligation was canceled either at death or by the estate or person receiving the obligation from the decedent. Filing taxes for free An obligation that becomes unenforceable is treated as having been canceled. Filing taxes for free   If such a transfer occurs, the amount included in the income of the transferor (the estate or beneficiary) is the greater of the amount received or the fair market value of the installment obligation at the time of transfer, reduced by the basis of the obligation. Filing taxes for free The basis of the obligation is the decedent's basis, adjusted for all installment payments received after the decedent's death and before the transfer. Filing taxes for free   If the decedent and obligor were related persons, the fair market value of the obligation cannot be less than its face value. Filing taxes for free Specific Types of Income in Respect of a Decedent This section explains and provides examples of some specific types of income in respect of a decedent. Filing taxes for free Wages. Filing taxes for free   The entire amount of wages or other employee compensation earned by the decedent but unpaid at the time of death is income in respect of a decedent. Filing taxes for free The income is not reduced by any amounts withheld by the employer. Filing taxes for free If the income is $600 or more, the employer should report it in box 3 of Form 1099-MISC, Miscellaneous Income, and give the recipient a copy of the form or a similar statement. Filing taxes for free   Wages paid as income in respect of a decedent are not subject to federal income tax withholding. Filing taxes for free However, if paid during the calendar year of death, they are subject to withholding for social security and Medicare taxes. Filing taxes for free These taxes should be included on the decedent's Form W-2 along with the taxes withheld before death. Filing taxes for free These wages are not included in box 1 of Form W-2. Filing taxes for free   Wages paid as income in respect of a decedent after the year of death generally are not subject to withholding for any federal taxe