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Help Filing 1040x

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Help Filing 1040x

Help filing 1040x 2. Help filing 1040x   Fuel Tax Credits and Refunds Table of Contents Gasoline and Aviation Gasoline Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation)Sales by Registered Ultimate Vendors Diesel-Water Fuel Emulsion Kerosene for Use in AviationSales by Registered Ultimate Vendors Other Fuels (Including Alternative Fuels) Refunds of Second TaxOptional reporting. Help filing 1040x Providing information. Help filing 1040x Definitions of Nontaxable UsesCustom application of fertilizer and pesticide. Help filing 1040x Fuel used between airfield and farm. Help filing 1040x Fuel not used for farming. Help filing 1040x Vehicles not considered highway vehicles. Help filing 1040x Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture CreditHow to Claim the Credit Filing Claims Claiming A Refund Claiming a Credit on Form 4136 Including the Credit or Refund in Income Federal excise taxes are imposed on certain fuels as discussed in chapter 1. Help filing 1040x This chapter lists the nontaxable uses of each fuel and defines the nontaxable uses. Help filing 1040x Information on the refund of second tax is included. Help filing 1040x This chapter also explains credits and refunds for the biodiesel or renewable diesel mixture credits, and the alternative fuel mixture and alternative fuel credits. Help filing 1040x Information on how to make a claim for credit or refund is included in this chapter and in the instructions for: Form 720, Form 4136, and Form 8849. Help filing 1040x Exported taxable fuel. Help filing 1040x   The claim rates for exported taxable fuel are listed on Schedule C (Form 720), Schedule 1 (Form 8849), and Form 4136. Help filing 1040x Taxpayers making a claim for exported taxable fuel must include with their records proof of exportation. Help filing 1040x Proof of exportation includes: A copy of the export bill of lading issued by the delivering carrier, A certificate by the agent or representative of the export carrier showing actual exportation of the fuel, A certificate of lading signed by a customs officer of the foreign country to which the fuel is exported, or A statement of the foreign consignee showing receipt of the fuel. Help filing 1040x Gasoline and Aviation Gasoline Ultimate Purchasers. Help filing 1040x   The following are the uses of gasoline (defined earlier) for which a credit or refund may be allowable to an ultimate purchaser. Help filing 1040x On a farm for farming purposes (credit only). Help filing 1040x Off-highway business use. Help filing 1040x Export. Help filing 1040x In a boat engaged in commercial fishing. Help filing 1040x In certain intercity and local buses. Help filing 1040x In a school bus. Help filing 1040x Exclusive use by a qualified blood collector organization. Help filing 1040x In a highway vehicle owned by the United States that is not used on a highway. Help filing 1040x Exclusive use by a nonprofit educational organization (see Sales by registered ultimate vendors and Credit Card Purchases, later). Help filing 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by registered ultimate vendors and Credit Card Purchases, later). Help filing 1040x In an aircraft or vehicle owned by an aircraft museum. Help filing 1040x   The following are the uses of aviation gasoline for which a credit or refund may be allowable to an ultimate purchaser. Help filing 1040x On a farm for farming purposes (credit only). Help filing 1040x Export. Help filing 1040x In foreign trade. Help filing 1040x Certain helicopter and fixed-wing air ambulance uses. Help filing 1040x In commercial aviation (other than foreign trade). Help filing 1040x Exclusive use by a qualified blood collector organization. Help filing 1040x Exclusive use by a nonprofit education organization (see Sales by registered ultimate vendors and Credit card purchases, later). Help filing 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by registered ultimate vendors and Credit and purchases, later). Help filing 1040x In an aircraft owned by an aircraft museum. Help filing 1040x In military aircraft. Help filing 1040x Claims by persons who paid the tax to the government. Help filing 1040x   Except for sales to nonprofit educational organizations and states and local governments, a credit or refund is allowable to the person that paid the tax to the government if the gasoline was sold to the ultimate purchaser (including an exporter) by either that person or by a retailer and the fuel was exported; used or sold for use as supplies for vessels or aircraft, including military aircraft, commercial fishing, and foreign trade; sold to a qualified blood collector organization; or used or sold for use in the production of Other Fuels. Help filing 1040x See Filing Claims, later. Help filing 1040x Sales by registered ultimate vendors. Help filing 1040x   This is an ultimate vendor that sells gasoline or aviation gasoline to any of the following and that is purchased without the use of a credit card. Help filing 1040x A state or local government for its exclusive use (including essential government use by an Indian tribal government). Help filing 1040x A nonprofit educational organization for its exclusive use. Help filing 1040x   The registered ultimate vendor may make the claim if the ultimate purchaser did not use a credit card and waives its right to the credit or refund by providing the registered ultimate vendor with a certificate. Help filing 1040x A sample certificate is included as Model Certificate M in the Appendix. Help filing 1040x The registered ultimate vendor must have the certificate at the time the credit or refund is claimed. Help filing 1040x   The ultimate vendor must be registered by the IRS. Help filing 1040x See Registration Requirements, earlier. Help filing 1040x Credit card purchases. Help filing 1040x   If gasoline and aviation gasoline are purchased with a credit card issued to a state or local government for its exclusive use (including essential government use by an Indian tribal government), or a nonprofit educational organization for its exclusive use, the person who extended credit to the ultimate purchaser (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the gasoline or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. Help filing 1040x   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. Help filing 1040x How to make the claim. Help filing 1040x   If the claim is made by the credit card issuer, see Schedule C  (Form 720) or Schedule 8 (Form 8849). Help filing 1040x Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) For conditions to an allowance of a credit or refund on exported dyed diesel fuel and dyed kerosene, see Exported taxable fuel, earlier. Help filing 1040x Ultimate purchasers. Help filing 1040x   The following are nontaxable uses of diesel fuel and kerosene (defined earlier) for which a credit or refund may be allowable to an ultimate purchaser. Help filing 1040x On a farm for farming purposes. Help filing 1040x Off-highway business use. Help filing 1040x Export. Help filing 1040x In a qualified local bus. Help filing 1040x In a school bus. Help filing 1040x Other than as a fuel in a propulsion engine of a diesel-powered highway vehicle (such as home heating oil). Help filing 1040x Exclusive use by a qualified blood collector organization. Help filing 1040x In a highway vehicle owned by the United States that is not used on a highway. Help filing 1040x Exclusive use by a nonprofit educational organization (see Sales by Registered Ultimate Vendors and Credit Card Purchases, later). Help filing 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by Registered Ultimate Vendors and Credit Card Purchases, later). Help filing 1040x In a vehicle owned by an aircraft museum. Help filing 1040x As a fuel in a propulsion engine of a diesel-powered train. Help filing 1040x Sales by Registered Ultimate Vendors The following are the sales for which a credit or refund may be allowable to the registered ultimate vendor only. Help filing 1040x Undyed diesel fuel or undyed kerosene sold for the exclusive use by a state or local government (if credit card rules (defined later) do not apply), Undyed kerosene sold from a blocked pump (defined below), or Undyed diesel fuel or undyed kerosene used in certain intercity and local buses, only if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver. Help filing 1040x Registered ultimate vendor (state use). Help filing 1040x   This is a person that sells undyed diesel fuel or undyed kerosene to a state or local government for its exclusive use (including essential government use by an Indian tribal government). Help filing 1040x The diesel fuel or kerosene must be purchased by the state without the use of a credit card, issued to the state by the credit card issuer, in order for the ultimate vendor to make the claim. Help filing 1040x The ultimate vendor must be registered by the IRS. Help filing 1040x See Registration Requirements, earlier. Help filing 1040x Registered ultimate vendor (blocked pump). Help filing 1040x   This is an ultimate vendor that sells undyed kerosene from a blocked pump. Help filing 1040x   A credit or refund may be allowable to a registered ultimate vendor (blocked pump) if the vendor sold to a buyer undyed kerosene from a blocked pump for use other than as a fuel in a diesel-powered highway vehicle and the vendor had no reason to believe the kerosene would not be used in that manner. Help filing 1040x Blocked pump. Help filing 1040x   A blocked pump is a fuel pump that meets all the following requirements. Help filing 1040x It is used to make retail sales of undyed kerosene for use by the buyer in any nontaxable use. Help filing 1040x It is at a fixed location. Help filing 1040x It is identified with a legible and conspicuous notice stating, “UNDYED UNTAXED KEROSENE, NONTAXABLE USE ONLY. Help filing 1040x ” It meets either of the following conditions. Help filing 1040x It cannot reasonably be used to dispense fuel directly into the fuel supply tank of a diesel-powered highway vehicle or train. Help filing 1040x It is locked by the vendor after each sale and unlocked by the vendor only in response to a buyer's request for undyed kerosene for use other than as a fuel in a diesel-powered highway vehicle or train. Help filing 1040x Registered ultimate vendor (certain intercity and local buses). Help filing 1040x   This is an ultimate vendor that sells undyed diesel fuel or undyed kerosene to the ultimate purchaser for use in certain intercity and local buses. Help filing 1040x   The registered ultimate vendor may make the claim if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver. Help filing 1040x A sample waiver is included as Model Waiver N in the Appendix. Help filing 1040x The registered ultimate vendor must have the waiver at the time the credit or payment is claimed. Help filing 1040x Credit Card Purchases. Help filing 1040x   If undyed diesel fuel or kerosene is purchased with a credit card issued to a state, the person who extended credit to the state (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the diesel fuel or kerosene, or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. Help filing 1040x   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. Help filing 1040x Diesel-Water Fuel Emulsion A claim for credit or refund may be made for the nontaxable use of a diesel-water fuel emulsion and for undyed diesel fuel used to produce a diesel-water fuel emulsion. Help filing 1040x The claim rate for nontaxable use of a diesel-water fuel emulsion taxed at $. Help filing 1040x 198 per gallon is $. Help filing 1040x 197 (if exported, the claim rate is $. Help filing 1040x 198). Help filing 1040x The following are the nontaxable uses for a diesel-water fuel emulsion for which a credit or refund may be allowable to an ultimate purchaser. Help filing 1040x On a farm for farming purposes. Help filing 1040x Off-highway business use. Help filing 1040x Export. Help filing 1040x In a qualified local bus. Help filing 1040x In a school bus. Help filing 1040x Other than as fuel in the propulsion engine of a train or diesel-powered highway vehicle (but not off-highway use). Help filing 1040x Exclusive use by a qualified blood collector organization. Help filing 1040x In a highway vehicle owned by the United States that is not used on a highway. Help filing 1040x Exclusive use by a nonprofit educational organization. Help filing 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia. Help filing 1040x In an aircraft or vehicle owned by an aircraft museum. Help filing 1040x Blender claims. Help filing 1040x   The claim rate for undyed diesel fuel taxed at $. Help filing 1040x 244 and used to produce a diesel-water fuel emulsion is $. Help filing 1040x 046 per gallon of diesel fuel so used. Help filing 1040x The blender must be registered by the IRS in order to make the claim. Help filing 1040x The blender must attach a statement to the claim certifying that: The diesel-water fuel emulsion contains at least 14% water, The emulsion additive is registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003, Undyed diesel fuel taxed at $. Help filing 1040x 244 was used to produce the diesel-water fuel emulsion, and The diesel-water fuel emulsion was used or sold for use in the blender's trade or business. Help filing 1040x Kerosene for Use in Aviation Ultimate purchasers. Help filing 1040x   Ultimate purchasers of kerosene used in certain aviation uses may make a claim if the rate of tax on their use is less than the rate of tax that was charged on the kerosene. Help filing 1040x   The ultimate purchaser of the kerosene used in commercial aviation (other than foreign trade) and noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) is eligible to make a claim if the ultimate purchaser certifies that the right to make the claim has not been waived. Help filing 1040x Generally, the ultimate purchaser is the aircraft operator. Help filing 1040x   The following are the nontaxable uses of kerosene used in noncommercial aviation for which a credit or refund may be allowable to the ultimate purchaser. Help filing 1040x On a farm for farming purposes. Help filing 1040x Certain helicopter and fixed-wing aircraft uses. Help filing 1040x Exclusive use by a qualified blood collector organization. Help filing 1040x Exclusive use by a nonprofit educational organization. Help filing 1040x In an aircraft owned by an aircraft museum. Help filing 1040x In military aircraft. Help filing 1040x Kerosene for use partly in commercial aviation and partly in nonexempt, noncommercial aviation. Help filing 1040x   If the fuel is used partly for use in commercial aviation and partly for use in nonexempt, noncommercial aviation, the operator may identify, either at the time of purchase or after the kerosene has been used, the amount that will be (or has been) used in commercial aviation. Help filing 1040x At the same time, the operator would either make the claim or waive the right to make the claim for credit or refund of the kerosene for use in commercial and nonexempt, noncommercial aviation. Help filing 1040x   If the operator does not identify the amount of kerosene that will be (or has been) used in commercial aviation, the operator may provide a certificate to the ultimate vendor similar to Model Certificate Q in the Appendix. Help filing 1040x For kerosene purchased with the certificate, used in commercial aviation, and taxed at $. Help filing 1040x 244 per gallon, use of the certificate will be treated as a waiver of the right to claim a credit or refund for the $. Help filing 1040x 025 per gallon part of the tax. Help filing 1040x The ultimate vendor may make this claim. Help filing 1040x The operator may make a claim for the $. Help filing 1040x 175 tax per gallon of the kerosene, but cannot waive the right to make the claim for the $. Help filing 1040x 175 tax per gallon. Help filing 1040x Sales by Registered Ultimate Vendors Kerosene for use in commercial aviation or noncommercial aviation. Help filing 1040x   The registered ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may make this claim if the ultimate purchaser waives its right to the credit or payment by providing the registered ultimate vendor with a waiver. Help filing 1040x A sample waiver is included as Model Waiver L in the Appendix. Help filing 1040x The registered ultimate vendor must have the waiver at the time the credit or payment is claimed. Help filing 1040x   Noncommercial aviation means any use of an aircraft not described as commercial aviation. Help filing 1040x For the definition of commercial aviation, see Commercial aviation on page 11. Help filing 1040x Kerosene for use in nonexempt, noncommercial aviation. Help filing 1040x   Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in nonexempt, noncommercial aviation. Help filing 1040x The ultimate vendor must be registered by the IRS (activity letter UA) and have the required certificate from the ultimate purchaser. Help filing 1040x A sample certificate is included as Model Certificate Q in the Appendix. Help filing 1040x The registered ultimate vendor must have the certificate at the time the credit or payment is claimed. Help filing 1040x Kerosene for use in aviation by a state or local government. Help filing 1040x   Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in aviation to a state or local government for its exclusive use (including essential government use by an Indian tribal government). Help filing 1040x The kerosene for use in aviation must be purchased by the state without the use of a credit card in order for the ultimate vendor to make the claim. Help filing 1040x The ultimate vendor must be registered by the IRS (activity letter UV) and have the required certificate from the ultimate purchaser. Help filing 1040x A sample certificate is included as Model Certificate P in the Appendix. Help filing 1040x The registered ultimate vendor must have the certificate at the time the credit or payment is claimed. Help filing 1040x Credit card purchases. Help filing 1040x   If taxed kerosene for use in aviation is purchased with a credit card issued to a state, the person who extended credit to the state (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the kerosene, or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. Help filing 1040x   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. Help filing 1040x Other Fuels (Including Alternative Fuels) Credit or refund for nontaxable use of taxed Other Fuels may be allowable to an ultimate purchaser. Help filing 1040x While tax is generally imposed on delivery, Other Fuels are taxed prior to delivery in the case of certain bulk sales described in chapter 1. Help filing 1040x The following are the nontaxable uses of Other Fuels for which a credit or refund may be allowable to the ultimate purchaser. Help filing 1040x On a farm for farming purposes. Help filing 1040x Off-highway business use. Help filing 1040x In a boat engaged in commercial fishing. Help filing 1040x In certain intercity and local buses. Help filing 1040x In a school bus. Help filing 1040x In a qualified local bus. Help filing 1040x Exclusive use by a qualified blood collector organization. Help filing 1040x Exclusive use by a nonprofit educational organization. Help filing 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia. Help filing 1040x In an aircraft or vehicle owned by an aircraft museum. Help filing 1040x Use in any boat operated by the United States for its exclusive use or any vessel of war of any foreign nation. Help filing 1040x See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit, later. Help filing 1040x Refunds of Second Tax The tax on dyed diesel fuel for inland waterways fuel use applies at the rate listed on Form 720. Help filing 1040x This is in addition to all other taxes imposed on the sale or use of the fuel. Help filing 1040x The section 4081(e) refund (discussed below) cannot be claimed. Help filing 1040x If the tax is paid and reported to the government on more than one taxable event for a taxable fuel under section 4081, the person paying the “second tax” may claim a refund (without interest) of that tax if certain conditions and reporting requirements are met. Help filing 1040x No credit against any tax is allowed for this tax. Help filing 1040x For information about taxable events, see the discussions under Gasoline, Diesel Fuel and Kerosene and Kerosene for Use in Aviation in chapter 1. Help filing 1040x Conditions to allowance of refund. Help filing 1040x   A claim for refund of the tax is allowed only if all the following conditions are met. Help filing 1040x A tax on the fuel was paid to the government and not credited or refunded (the “first tax”). Help filing 1040x After the first tax was imposed, another tax was imposed on the same fuel and was paid to the government (the “second tax”). Help filing 1040x The person that paid the second tax filed a timely claim for refund containing the information required (see Refund claim, later). Help filing 1040x The person that paid the first tax has met the reporting requirements, discussed next. Help filing 1040x Reporting requirements. Help filing 1040x   Generally, the person that paid the first tax must file a “First Taxpayer's Report” with its Form 720 for the quarter to which the report relates. Help filing 1040x A model first taxpayer's report is shown in the Appendix as Model Certificate B. Help filing 1040x The report must contain all information needed to complete the model. Help filing 1040x   By the due date for filing the Form 720, you must also send a separate copy of the report to the following address. Help filing 1040x Department of the Treasury Internal Revenue Service  Cincinnati, OH 45999-0555 Write “EXCISE – FIRST TAXPAYER'S REPORT” across the top of that copy. Help filing 1040x Optional reporting. Help filing 1040x   A first taxpayer's report is not required for the tax imposed on: Removal at a terminal rack, Nonbulk entries into the United States, and Removals or sales by blenders. Help filing 1040x However, if the person liable for the tax expects that another tax will be imposed on that fuel, that person should (but is not required to) file a first taxpayer's report. Help filing 1040x Providing information. Help filing 1040x   The first taxpayer must give a copy of the report to the buyer of the fuel within the bulk transfer/terminal system or to the owner of the fuel immediately before the first tax was imposed, if the first taxpayer is not the owner at that time. Help filing 1040x If an optional report is filed, a copy should (but is not required to) be given to the buyer or owner. Help filing 1040x   A person that receives a copy of the first taxpayer's report and later sells the fuel within the bulk transfer/terminal system must give the copy and a “Statement of Subsequent Seller” to the buyer. Help filing 1040x If the later sale is outside the bulk transfer/terminal system and that person expects that another tax will be imposed, that person should (but is not required to) give the copy and the statement to the buyer. Help filing 1040x A model statement of subsequent seller is shown in the Appendix as Model Certificate A. Help filing 1040x The statement must contain all information necessary to complete the model. Help filing 1040x   If the first taxpayer's report relates to fuel sold to more than one buyer, copies of that report must be made when the fuel is divided. Help filing 1040x Each buyer must be given a copy of the report. Help filing 1040x Refund claim. Help filing 1040x   You must have filed Form 720 and paid the second tax before you file for a refund of that tax. Help filing 1040x You must make your claim for refund on Form 8849. Help filing 1040x Complete Schedule 5 (Form 8849) and attach it to your Form 8849. Help filing 1040x Do not include this claim with a claim under another tax provision. Help filing 1040x You must not have included the second tax in the price of the fuel and must not have collected it from the purchaser. Help filing 1040x You must submit the following information with your claim. Help filing 1040x A copy of the first taxpayer's report (discussed earlier). Help filing 1040x A copy of the statement of subsequent seller if the fuel was bought from someone other than the first taxpayer. Help filing 1040x Definitions of Nontaxable Uses This section provides definitions of the terms used in Table 2-1 for nontaxable uses. Help filing 1040x If applicable, the type of use number from Table 2-1 is indicated in each heading. Help filing 1040x Type of use table. Help filing 1040x   The first column of the table is the number you enter on Form 4136, Form 8849, or Schedule C (Form 720) for that type of use. Help filing 1040x For type of use 2, the mobile machinery parenthetical applies only to Form 8849 and Form 720. Help filing 1040x Table 2-1. Help filing 1040x Type of Use Table No. Help filing 1040x Type of Use 1 On a farm for farming purposes 2 Off-highway business use (for business use other than in a highway vehicle registered or required to be registered for highway use) (other than use in mobile machinery) 3 Export 4 In a boat engaged in commercial fishing 5 In certain intercity and local buses 6 In a qualified local bus 7 In a bus transporting students and employees of schools (school buses) 8 For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel in the propulsion engine of a train or diesel-powered highway vehicle (but not off-highway business use) 9 In foreign trade 10 Certain helicopter and fixed-wing aircraft uses 11 Exclusive use by a qualified blood collector organization 12 In a highway vehicle owned by the United States that is not used on a highway 13 Exclusive use by a nonprofit educational organization 14 Exclusive use by a state, political subdivision of a state, or the District of Columbia 15 In an aircraft or vehicle owned by an aircraft museum 16 In military aircraft On a farm for farming purposes (No. Help filing 1040x 1). Help filing 1040x   On a farm for farming purposes means fuel used in carrying on a trade or business of farming, on a farm in the United States, and for farming purposes. Help filing 1040x Farm. Help filing 1040x   A farm includes livestock, dairy, fish, poultry, fruit, fur-bearing animals, and truck farms; orchards; plantations; ranches; nurseries; ranges; and feed yards for fattening cattle. Help filing 1040x It also includes structures such as greenhouses used primarily for the raising of agricultural or horticultural commodities. Help filing 1040x A fish farm is an area where fish are grown or raised — not merely caught or harvested. Help filing 1040x Farming purposes. Help filing 1040x   As an owner, tenant, or operator, you use fuel on a farm for farming purposes if you use it in any of the following ways. Help filing 1040x To cultivate the soil or to raise or harvest any agricultural or horticultural commodity. Help filing 1040x To raise, shear, feed, care for, train, or manage livestock, bees, poultry, fur-bearing animals, or wildlife. Help filing 1040x To operate, manage, conserve, improve, or maintain your farm and its tools and equipment. Help filing 1040x To handle, dry, pack, grade, or store any raw agricultural or horticultural commodity. Help filing 1040x For this use to qualify, you must have produced more than half the commodity so treated during the tax year. Help filing 1040x Commodity means a single raw product. Help filing 1040x For example, apples and peaches are two separate commodities. Help filing 1040x To plant, cultivate, care for, or cut trees or to prepare (other than sawing logs into lumber, chipping, or other milling) trees for market, but only if the planting, etc. Help filing 1040x , is incidental to your farming operations. Help filing 1040x Your tree operations will be incidental only if they are minor in nature when compared to the total farming operations. Help filing 1040x   If any other person, such as a neighbor or custom operator, performs a service for you on your farm for any of the purposes listed in (1) or (2), you are considered to be the ultimate purchaser that used the fuel on a farm for farming purposes. Help filing 1040x However, see Custom application of fertilizer and pesticide, next. Help filing 1040x   If doubt exists whether the owner, the tenant, or the operator of the farm bought the fuel, determine who bore the cost of the fuel. Help filing 1040x For example, if the owner of a farm and the tenant equally share the cost of gasoline that is used on a farm for farming purposes, each can claim a credit for the tax on one-half the fuel used. Help filing 1040x Custom application of fertilizer and pesticide. Help filing 1040x   Fuel used on a farm for farming purposes includes fuel used in the application of fertilizer, pesticides, or other substances, including aerial applications. Help filing 1040x Generally, the applicator is treated as having used the fuel on a farm for farming purposes. Help filing 1040x For aviation gasoline, the aerial applicator makes the claim as the ultimate purchaser. Help filing 1040x For kerosene used in aviation, the ultimate purchaser may make the claim or waive their right to make the claim to the registered ultimate vendor. Help filing 1040x Fuel used between airfield and farm. Help filing 1040x   Fuel used by an aerial applicator for the direct flight between the airfield and one or more farms is treated as a farming purpose. Help filing 1040x Fuel not used for farming. Help filing 1040x   Fuel is not used on a farm for farming purposes if it is used in any of the following ways. Help filing 1040x Off the farm, such as on the highway or in noncommercial aviation, other than fuel used between the airfield and farm described above, even if the fuel is used in transporting livestock, feed, crops, or equipment. Help filing 1040x For personal use, such as mowing the lawn. Help filing 1040x In processing, packaging, freezing, or canning operations. Help filing 1040x In processing crude gum into gum spirits of turpentine or gum resin or in processing maple sap into maple syrup or maple sugar. Help filing 1040x Off-highway business use (No. Help filing 1040x 2). Help filing 1040x   Off-highway business use means fuel used in a trade or business or in an income-producing activity other than as a fuel in a highway vehicle registered or required to be registered for use on public highways. Help filing 1040x The terms “highway vehicle,” “public highway,” and “registered” are defined below. Help filing 1040x Do not consider any use in a boat as an off-highway business use. Help filing 1040x   Off-highway business use includes fuels used in any of the following ways. Help filing 1040x In stationary machines such as generators, compressors, power saws, and similar equipment. Help filing 1040x For cleaning purposes. Help filing 1040x In forklift trucks, bulldozers, and earthmovers. Help filing 1040x   Generally, this use does not include nonbusiness use of fuel, such as use by minibikes, snowmobiles, power lawn mowers, chain saws, and other yard equipment. Help filing 1040x Example. Help filing 1040x Caroline owns a landscaping business. Help filing 1040x She uses power lawn mowers and chain saws in her business. Help filing 1040x The gasoline used in the power lawn mowers and chain saws qualifies as fuel used in an off-highway business use. Help filing 1040x The gasoline used in her personal lawn mower at home does not qualify. Help filing 1040x Highway vehicle. Help filing 1040x   A highway vehicle is any self-propelled vehicle designed to carry a load over public highways, whether or not it is also designed to perform other functions. Help filing 1040x Examples of vehicles designed to carry a load over public highways are passenger automobiles, motorcycles, buses, and highway-type trucks and truck tractors. Help filing 1040x A vehicle is a highway vehicle even though the vehicle's design allows it to perform a highway transportation function for only one of the following. Help filing 1040x A particular type of load, such as passengers, furnishings, and personal effects (as in a house, office, or utility trailer). Help filing 1040x A special kind of cargo, goods, supplies, or materials. Help filing 1040x Some off-highway task unrelated to highway transportation, except as discussed next. Help filing 1040x Vehicles not considered highway vehicles. Help filing 1040x   Generally, the following kinds of vehicles are not considered highway vehicles for purposes of the credit or refund of fuel taxes. Help filing 1040x Specially designed mobile machinery for nontransportation functions. Help filing 1040x A self-propelled vehicle is not a highway vehicle if all the following apply. Help filing 1040x The chassis has permanently mounted to it machinery or equipment used to perform certain operations (construction, manufacturing, drilling, mining, timbering, processing, farming, or similar operations) if the operation of the machinery or equipment is unrelated to transportation on or off the public highways. Help filing 1040x The chassis has been specially designed to serve only as a mobile carriage and mount (and power source, if applicable) for the machinery or equipment, whether or not the machinery or equipment is in operation. Help filing 1040x The chassis could not, because of its special design and without substantial structural modification, be used as part of a vehicle designed to carry any other load. Help filing 1040x The vehicle must have traveled less than 7,500 miles on public highways during the taxable year. Help filing 1040x Vehicles specially designed for off-highway transportation. Help filing 1040x A vehicle is not treated as a highway vehicle if the vehicle is specially designed for the primary function of transporting a particular type of load other than over the public highway and because of this special design, the vehicle's capability to transport a load over a public highway is substantially limited or impaired. Help filing 1040x To make this determination, you can take into account the vehicle's size, whether the vehicle is subject to licensing, safety, or other requirements, and whether the vehicle can transport a load at a sustained speed of at least 25 miles per hour. Help filing 1040x It does not matter that the vehicle can carry heavier loads off highway than it is allowed to carry over the highway. Help filing 1040x Nontransportation trailers and semitrailers. Help filing 1040x A trailer or semi-trailer is not treated as a highway vehicle if it is specially designed to function only as an enclosed stationary shelter for carrying on a nontransportation function at an off-highway site. Help filing 1040x For example, a trailer that is capable only of functioning as an office for an off-highway construction operation is not a highway vehicle. Help filing 1040x Public highway. Help filing 1040x   A public highway includes any road in the United States that is not a private roadway. Help filing 1040x This includes federal, state, county, and city roads and streets. Help filing 1040x Registered. Help filing 1040x   A vehicle is considered registered when it is registered or required to be registered for highway use under the law of any state, the District of Columbia, or any foreign country in which it is operated or situated. Help filing 1040x Any highway vehicle operated under a dealer's tag, license, or permit is considered registered. Help filing 1040x A highway vehicle is not considered registered solely because a special permit allows the vehicle to be operated at particular times and under specified conditions. Help filing 1040x Dual use of propulsion motor. Help filing 1040x   Off-highway business use does not include any fuel used in the propulsion motor of a registered highway vehicle even though that motor also operates special equipment by means of a power take-off or power transfer. Help filing 1040x It does not matter if the special equipment is mounted on the vehicle. Help filing 1040x Example. Help filing 1040x The motor of a registered concrete-mixer truck operates both the engine and the mixing unit by means of a power take-off. Help filing 1040x The fuel used in the motor to run the mixer is not off-highway business use. Help filing 1040x Use in separate motor. Help filing 1040x   Off-highway business use includes fuel used in a separate motor to operate special equipment, such as a refrigeration unit, pump, generator, or mixing unit. Help filing 1040x If you draw fuel from the same tank that supplies fuel to the propulsion motor, you must figure the quantity used in the separate motor operating the special equipment. Help filing 1040x You may make a reasonable estimate based on your operating experience and supported by your records. Help filing 1040x   You can use devices that measure the miles the vehicle has traveled (such as hubometers) to figure the gallons of fuel used to propel the vehicle. Help filing 1040x Add to this amount the fuel consumed while idling or warming up the motor before propelling the vehicle. Help filing 1040x The difference between your total fuel used and the fuel used to propel the vehicle is the fuel used in the separate motor. Help filing 1040x Example. Help filing 1040x Hazel owns a refrigerated truck. Help filing 1040x It has a separate motor for the refrigeration unit. Help filing 1040x The same tank supplies both motors. Help filing 1040x Using the truck's hubometer, Hazel figures that 90% of the fuel was used to propel the truck. Help filing 1040x Therefore, 10% of the fuel is used in an off-highway business use. Help filing 1040x Fuel lost or destroyed. Help filing 1040x   You cannot treat fuel lost or destroyed through spillage, fire, or other casualty as fuel used in an off-highway business use. Help filing 1040x Export (No. Help filing 1040x 3). Help filing 1040x   Export means fuel transported from the United States with the intention that the fuel remain in a foreign country or possession of the United States. Help filing 1040x Fuel is not exported if it is in the fuel supply tank of a vehicle or aircraft. Help filing 1040x In a boat engaged in commercial fishing (No. Help filing 1040x 4). Help filing 1040x   In a boat engaged in commercial fishing means fuel used in taking, catching, processing, or transporting fish, shellfish, or other aquatic life for commercial purposes, such as selling or processing the catch, on a specific trip basis. Help filing 1040x They include boats used in both fresh and salt water fishing. Help filing 1040x They do not include boats used for both sport fishing and commercial fishing on the same trip. Help filing 1040x In certain intercity and local buses (No. Help filing 1040x 5). Help filing 1040x   In certain intercity and local buses means fuel used in a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. Help filing 1040x The bus must be engaged in one of the following activities. Help filing 1040x Scheduled transportation along regular routes. Help filing 1040x Nonscheduled operations if the seating capacity of the bus is at least 20 adults, not including the driver. Help filing 1040x Vans and similar vehicles used for van-pooling or taxi service do not qualify. Help filing 1040x Available to the general public. Help filing 1040x   This means you offer service to more than a limited number of persons or organizations. Help filing 1040x If a bus operator normally provides charter operations through travel agencies but has buses available for chartering by the general public, this service is available to the general public. Help filing 1040x A bus does not qualify when its operator uses it to provide exclusive services to only one person, group, or organization. Help filing 1040x Also, intercity bus transportation does not include transporting students and employees of schools or intercity transportation in a qualified local bus. Help filing 1040x In a qualified local bus (No. Help filing 1040x 6). Help filing 1040x   In a qualified local bus means fuel used in a bus meeting all the following requirements. Help filing 1040x It is engaged in furnishing (for compensation) intracity passenger land transportation available to the general public. Help filing 1040x It operates along scheduled, regular routes. Help filing 1040x It has a seating capacity of at least 20 adults (excluding the driver). Help filing 1040x It is under contract with (or is receiving more than a nominal subsidy from) any state or local government to furnish the transportation. Help filing 1040x Intracity passenger land transportation. Help filing 1040x   This is the land transportation of passengers between points located within the same metropolitan area. Help filing 1040x It includes transportation along routes that cross state, city, or county boundaries if the routes remain within the metropolitan area. Help filing 1040x Under contract. Help filing 1040x   A bus is under contract with a state or local government only if the contract imposes a bona fide obligation on the bus operator to furnish the transportation. Help filing 1040x More than a nominal subsidy. Help filing 1040x   A subsidy is more than nominal if it is reasonably expected to exceed an amount equal to 3 cents multiplied by the number of gallons of fuel used in buses on subsidized routes. Help filing 1040x A company that operates its buses along subsidized and unsubsidized intracity routes may consider its buses qualified local buses only when the buses are used on the subsidized intracity routes. Help filing 1040x In a school bus (No. Help filing 1040x 7). Help filing 1040x   In a school bus means fuel used in a bus engaged in the transportation of students or employees of schools. Help filing 1040x A school is an educational organization with a regular faculty and curriculum and a regularly enrolled body of students who attend the place where the educational activities occur. Help filing 1040x For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel (No. Help filing 1040x 8). Help filing 1040x   Diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train (not including off-highway business use) means undyed diesel fuel and undyed kerosene used: For home heating, lighting, and cooking; In boats; In stationary machines, such as generators and compressors; For cleaning purposes; or In minibikes and snowmobiles. Help filing 1040x In foreign trade (No. Help filing 1040x 9). Help filing 1040x   In foreign trade means fuel used in civil aircraft employed in foreign trade or trade between the United States and any of its possessions. Help filing 1040x The term trade includes the transportation of persons or property for hire and the making of the necessary preparations for such transportation. Help filing 1040x In the case of aircraft registered in a foreign country, the country must allow reciprocal benefits for aircraft registered in the United States. Help filing 1040x Certain helicopter and fixed-wing aircraft uses (No. Help filing 1040x 10). Help filing 1040x   Includes: Certain helicopter uses. Help filing 1040x   Certain helicopter uses means fuel used by a helicopter for any of the following purposes. Help filing 1040x Transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas. Help filing 1040x Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Help filing 1040x Providing emergency medical transportation. Help filing 1040x   During a use described in items (1) and (2), the helicopter must not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Help filing 1040x For item (1), treat each flight segment as a separate flight. Help filing 1040x Fixed-wing aircraft uses. Help filing 1040x   Fixed-wing aircraft uses means fuel used by a fixed-wing aircraft for any of the following purposes. Help filing 1040x Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Help filing 1040x Providing emergency medical transportation. Help filing 1040x The aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. Help filing 1040x During a use described in item (1), the aircraft must not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Help filing 1040x Exclusive use by a qualified blood collector organization (No. Help filing 1040x 11). Help filing 1040x   Exclusive use by a qualified blood collector organization means fuel used by the qualified blood collector organization for its exclusive use in the collection, storage, or transportation of blood. Help filing 1040x Qualified blood collector organization. Help filing 1040x   A qualified blood collector organization is one that is: Described in section 501(c)(3) and exempt from tax under section 501(a), Primarily engaged in the activity of collecting human blood, Registered by the IRS, and Registered by the Food and Drug Administration to collect blood. Help filing 1040x In a highway vehicle owned by the United States that is not used on a highway (No. Help filing 1040x 12). Help filing 1040x   In a highway vehicle owned by the United States that is not used on a highway means fuel used in a vehicle that was not used on public highways during the period covered by the claim. Help filing 1040x This use applies whether or not the vehicle is registered or required to be registered for highway use. Help filing 1040x Exclusive use by a nonprofit educational organization (No. Help filing 1040x 13). Help filing 1040x   Exclusive use by a nonprofit educational organization means fuel used by an organization exempt from income tax under section 501(a) that meets both of the following requirements. Help filing 1040x It has a regular faculty and curriculum. Help filing 1040x It has a regularly enrolled body of students who attend the place where the instruction normally occurs. Help filing 1040x   A nonprofit educational organization also includes a school operated by a church or other organization described in section 501(c)(3) if the school meets the above requirements. Help filing 1040x Exclusive use by a state, political subdivision of a state, or the District of Columbia (No. Help filing 1040x 14). Help filing 1040x   Exclusive use by a state, political subdivision of a state, or the District of Columbia means fuel purchased by the state or local government for its exclusive use. Help filing 1040x A state or local government is any state, any political subdivision thereof, or the District of Columbia. Help filing 1040x An Indian tribal government is treated as a state only if the fuel is used in an activity that involves the exercise of an essential tribal government function. Help filing 1040x Gasoline, diesel fuel, and kerosene used by the American Red Cross is considered to be the use of these fuels by a state. Help filing 1040x In an aircraft or vehicle owned by an aircraft museum (No. Help filing 1040x 15). Help filing 1040x   In an aircraft or vehicle owned by an aircraft museum means fuel used in an aircraft or vehicle that is owned by an organization that meets all the following requirements. Help filing 1040x It is exempt from income tax as an organization described in section 501(c)(3). Help filing 1040x It is operated as a museum under a state (or District of Columbia) charter. Help filing 1040x It is operated exclusively for acquiring, exhibiting, and caring for aircraft of the type used for combat or transport in  World War II. Help filing 1040x   The aircraft or vehicle (such as a ground servicing vehicle for aircraft) must be used exclusively for the purposes described in item (3). Help filing 1040x In military aircraft (No. Help filing 1040x 16). Help filing 1040x   In a military aircraft means fuel used in an aircraft owned by the United States or any foreign nation and constituting a part of its armed forces. Help filing 1040x In commercial aviation (other than foreign trade). Help filing 1040x   See Commercial aviation, earlier, for the definition. Help filing 1040x Use in a train. Help filing 1040x   Use in a train means fuel used in the propulsion engine of equipment or machinery that rides on rails. Help filing 1040x This includes use in a locomotive, work train, switching engine, and track maintenance machine. Help filing 1040x Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit For alternative fuel mixtures produced after December 31, 2011, see How to Claim the Credit below. Help filing 1040x The section 6426 credit for biodiesel and alternative fuel consists of the biodiesel or renewable diesel mixture credit, alternative fuel credit, and alternative fuel mixture credit. Help filing 1040x Biodiesel or renewable diesel mixture credit claimant. Help filing 1040x   Claimant produced a biodiesel mixture by mixing biodiesel with diesel fuel. Help filing 1040x Claimant produced a renewable diesel mixture by mixing renewable diesel with liquid fuel (other than renewable diesel). Help filing 1040x   The person that produced and sold or used the mixture in their trade or business is the only person eligible to make this claim. Help filing 1040x The credit is based on the gallons of biodiesel or renewable diesel in the mixture. Help filing 1040x Renewable diesel does not include any fuel derived from coprocessing biomass (as defined in section 45K(c)(3)) with a feedstock that is not biomass. Help filing 1040x Claim requirements. Help filing 1040x   See the Instructions for Form 720 for the biodiesel or renewable diesel mixture claim requirements. Help filing 1040x Alternative fuel credit claimant. Help filing 1040x   For the alternative fuel credit, the registered alternative fueler who (1) sold an alternative fuel at retail delivered it into the fuel supply tank of a motor vehicle or motorboat, (2) sold an alternative fuel, delivered it in bulk taxable use in a motor vehicle or motorboat, and received required statement from the buyer, (3) used an alternative fuel (not sold at retail or in bulk as previously described) motor vehicle or motorboat, or (4) sold an alternative fuel used as a fuel in aviation is the only person eligible to make this claim. Help filing 1040x Carbon capture requirement. Help filing 1040x   A credit for Fischer-Tropsch process liquid fuel derived from coal (including peat) can be claimed only if the fuel is derived from coal produced at a gasification facility that separates and sequesters at least 75% of the facility's total carbon dioxide emissions. Help filing 1040x Alternative fuel credit. Help filing 1040x   The registered alternative fueler is the person eligible to make the claim. Help filing 1040x An alternative fueler is the person liable for tax on alternative fuel under the rules for taxable events for Other Fuels (discussed in chapter 1) or would be liable but for an exemption for nontaxable uses. Help filing 1040x An alternative fueler includes a person who sells for use or uses an alternative fuel in aviation. Help filing 1040x Alternative fuel mixture credit claimant. Help filing 1040x   For the alternative fuel mixture credit, the registered alternative fueler that produced and sold or used the mixture as a fuel in their trade or business is the only person eligible to make this claim. Help filing 1040x The credit is based on the gallons of alternative fuel in the mixture. Help filing 1040x An alternative fuel mixture is a mixture of alternative fuel and section 4081 taxable fuel (gasoline, diesel fuel, or kerosene). Help filing 1040x Registration. Help filing 1040x   You must be registered by the IRS to be eligible to claim the section 6426 fuel credit. Help filing 1040x See Registration Requirements in chapter 1. Help filing 1040x Credits for fuel provide incentive for United States production. Help filing 1040x   The section 6426 fuel credit may not be claimed for alternative fuel that is produced outside the United States for use as a fuel outside the United States. Help filing 1040x The United States includes any possession of the United States. Help filing 1040x Credit for fuels derived from paper or pulp production. Help filing 1040x   Credit for alternative fuels and alternative fuel mixtures for any fuel derived from the production of paper or pulp are not available for fuel sold or used on or after December 31, 2009. Help filing 1040x How to Claim the Credit Any biodiesel or renewable diesel mixture credit must first be claimed on Schedule C to reduce your taxable fuel liability reported on Form 720. Help filing 1040x Any excess credit may be claimed on Schedule C (Form 720), Schedule 3 (Form 8849), Form 4136, or Form 8864, Biodiesel and Renewable Diesel Fuels Credit. Help filing 1040x See Notice 2005-4 and the Instructions for Form 720 for more information. Help filing 1040x Also see Notice 2013-26 on page 984 of I. Help filing 1040x R. Help filing 1040x B. Help filing 1040x 2013-18 at www. Help filing 1040x irs. Help filing 1040x gov/pub/irs-irbs/irb13-18. Help filing 1040x pdf; and see chapter 2, later. Help filing 1040x Coordination with income tax credit. Help filing 1040x   Only one credit may be taken for any amount of biodiesel or renewable diesel. Help filing 1040x If any amount is claimed (or will be claimed) for any amount of biodiesel or renewable diesel on Form 720, Form 8849, or Form 4136, then a claim cannot be made on Form 8864 for that amount of biodiesel or renewable diesel. Help filing 1040x   Any alternative fuel credit must first be claimed on Schedule C (Form 720) to reduce your section 4041 taxable fuel liability for alternative fuel and CNG reported on Form 720. Help filing 1040x Any excess credit may claimed on Schedule C (Form 720), Schedule 3 (Form 8849), or Form 4136. Help filing 1040x   For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit can be claimed on Schedule C (Form 720), not on Form 4136 or Schedule 3 (Form 8849), and only to the extent of your section 4081 taxable fuel liability for gasoline, diesel fuel and kerosene reported on Form 720. Help filing 1040x   Calculate the limitation for alternative fuel mixtures separately and enter on Schedule C (Form 720), line 14, only the gallons of mixtures that do not exceed your section 4081 taxable fuel liability. Help filing 1040x Filing Claims This section tells you how to make a claim for a credit or refund of excise taxes on fuels. Help filing 1040x This section also covers recordkeeping requirements and when to include the credit or refund in your income. Help filing 1040x Generally, you will provide all the information needed to claim a credit or refund when you properly complete Form 8849, Form 4136, Schedule C (Form 720), Form 6478, or Form 8864. Help filing 1040x In some cases, you will have to attach additional information. Help filing 1040x You need to keep records that support your claim for a credit or refund. Help filing 1040x Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. Help filing 1040x Ultimate purchaser. Help filing 1040x   Ultimate purchasers may make claims for the nontaxable use of fuels on Form 4136, Schedule 1 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. Help filing 1040x If you are an ultimate purchaser, you must keep the following records. Help filing 1040x The number of gallons purchased and used during the period covered by your claim. Help filing 1040x The dates of the purchases. Help filing 1040x The names and addresses of suppliers and amounts purchased from each in the period covered by your claim. Help filing 1040x The nontaxable use for which you used the fuel. Help filing 1040x The number of gallons used for each nontaxable use. Help filing 1040x It is important that your records show separately the number of gallons used for each nontaxable use that qualifies as a claim. Help filing 1040x If the fuel is exported, you must have proof of exportation. Help filing 1040x   For more information about keeping records, see Publication 583, Starting a Business and Keeping Records, or chapter 1 of Publication 17, Your Federal Income Tax for Individuals. Help filing 1040x Exceptions. Help filing 1040x    Generally, the ultimate purchaser may not claim a credit or refund for undyed diesel fuel, undyed kerosene, or kerosene for use in aviation sold for the exclusive use of a state or local government. Help filing 1040x However, see Claims by credit card issuers, later, for an exception. Help filing 1040x The ultimate purchaser may not claim a credit or refund as follows. Help filing 1040x The ultimate purchaser of gasoline or aviation gasoline used by a state or local government for its exclusive use or by a nonprofit educational organization for its exclusive use may waive its right to make a claim by providing a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate M. Help filing 1040x A new certificate is required each year or when any information in the current certificate expires. Help filing 1040x The ultimate purchaser of kerosene for use in commercial aviation or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver L. Help filing 1040x A new waiver is required each year or when any information in the current waiver expires. Help filing 1040x The ultimate purchaser of undyed diesel fuel or undyed kerosene used in certain intercity and local buses may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver N. Help filing 1040x A new waiver is required each year or when any information in the current waiver expires. Help filing 1040x The ultimate purchaser of kerosene for use in nonexempt, noncommercial aviation must provide a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate Q. Help filing 1040x A new certificate is required each year or when any information in the current certificate expires. Help filing 1040x Registered ultimate vendor. Help filing 1040x   Registered ultimate vendors may make claims for certain sales of fuels on Form 4136, Schedule 2 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. Help filing 1040x If you are a registered ultimate vendor, you must keep certain information pertaining to the sale of the fuel. Help filing 1040x   To make a claim, you must have sold the fuel at a tax-excluded price, repaid the tax to the buyer, or obtained the buyer's written consent to the allowance of the claim. Help filing 1040x You are required to have a valid certificate or waiver in your possession in order to make the claim. Help filing 1040x   In addition, you must have a registration number that has not been revoked or suspended. Help filing 1040x See Form 637. Help filing 1040x State use. Help filing 1040x   To make a claim as an ultimate vendor (state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained below. Help filing 1040x If you sell undyed diesel fuel, undyed kerosene, or kerosene for use in aviation for use by a state or local government, you must keep the following information. Help filing 1040x The name and taxpayer identification number of each person (government unit) that bought the fuel. Help filing 1040x The number of gallons sold to each person. Help filing 1040x An unexpired certificate from the buyer. Help filing 1040x See Model Certificate P in the Appendix. Help filing 1040x The certificate expires on the earlier of 1 year after the date of the certificate or the date a new certificate is given to the registered ultimate vendor. Help filing 1040x Nonprofit educational organization and state use. Help filing 1040x   To make a claim as an ultimate vendor (nonprofit educational organization or state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained later. Help filing 1040x If you sell gasoline or aviation gasoline to a nonprofit educational organization for its exclusive use or to a state or local government for its exclusive use, you must keep the following information. Help filing 1040x The name and taxpayer identification number of each person (nonprofit educational organization or government unit) that bought the fuel. Help filing 1040x The number of gallons sold to each person. Help filing 1040x An unexpired certificate from the buyer. Help filing 1040x See Model Certificate M in the Appendix. Help filing 1040x  The certificate expires on the earlier of 1 year after the date of the certificate or the date a new certificate is given to the registered ultimate vendor. Help filing 1040x Blocked pump. Help filing 1040x   To make a claim as an ultimate vendor (blocked pump), you must have a UP registration number. Help filing 1040x If you sell undyed kerosene (other than kerosene for use in aviation) from a pump that qualifies as a blocked pump because it is locked by you after each sale and is unlocked by you at the request of the buyer, you must keep the following information for each sale of more than 5 gallons. Help filing 1040x The date of each sale. Help filing 1040x The name and address of the buyer. Help filing 1040x The number of gallons sold to that buyer. Help filing 1040x Certain intercity and local bus use. Help filing 1040x   To make a claim as an ultimate vendor of undyed diesel fuel or undyed kerosene used in certain intercity and local buses, you must have a UB registration number. Help filing 1040x You must keep the following information. Help filing 1040x The date of each sale. Help filing 1040x The name and address of the buyer. Help filing 1040x The number of gallons sold to the buyer. Help filing 1040x A copy of the waiver signed by the buyer at the time the credit or payment is claimed. Help filing 1040x See Model Waiver N in the Appendix. Help filing 1040x Kerosene for use in commercial aviation or noncommercial aviation. Help filing 1040x   To make a claim as an ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia), you must have a UA registration number. Help filing 1040x See Kerosene for use in aviation, earlier, for a list of nontaxable uses. Help filing 1040x You must keep the following information. Help filing 1040x The date of each sale. Help filing 1040x The name and address of the buyer. Help filing 1040x The number of gallons sold to the buyer. Help filing 1040x A copy of the waiver signed by the buyer at the time the credit or payment is claimed. Help filing 1040x See Model Waiver L in the Appendix. Help filing 1040x Kerosene for use in nonexempt, noncommercial aviation. Help filing 1040x   To make a claim as an ultimate vendor of kerosene for use in nonexempt, noncommercial aviation, you must have a UA registration number. Help filing 1040x You must keep the following information. Help filing 1040x The date of each sale. Help filing 1040x The name and address of the buyer. Help filing 1040x The number of gallons sold to the buyer. Help filing 1040x A copy of the certificate signed by the buyer at the time the credit or payment is claimed. Help filing 1040x See Model Certificate Q in the Appendix. Help filing 1040x Claims by credit card issuers. Help filing 1040x   For sales of gasoline, aviation gasoline, diesel fuel, kerosene, or kerosene for use in aviation that are purchased by an exempt user with the use of a credit card, the registered credit card issuer is the only person who can make the claim. Help filing 1040x An exempt user for this purpose is: For gasoline or aviation gasoline, a state or local government (including essential government use by an Indian tribal government) or a nonprofit educational organization; or For diesel fuel, kerosene, or kerosene for use in aviation, a state or local government (including essential government use by an Indian tribal government). Help filing 1040x   If gasoline is purchased without the use of a credit card, then the registered ultimate vendor of the gasoline may make the claim for refund or credit. Help filing 1040x However, if the gasoline is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim. Help filing 1040x   If diesel fuel, kerosene, or kerosene for use in aviation is purchased without the use of a credit card, the registered ultimate vendor may make the claim for refund or credit. Help filing 1040x A state is not allowed to make a claim for these fuels. Help filing 1040x However, if the diesel fuel or kerosene is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim. Help filing 1040x   The claim from the credit card issuer must contain the following information as it applies to the fuel covered in the claim. Help filing 1040x The total number of gallons. Help filing 1040x Its registration number. Help filing 1040x A statement that it has not collected the amount of tax from the ultimate purchaser or has obtained the written consent of the ultimate purchaser to make the claim. Help filing 1040x A statement that it has repaid or agreed to repay the amount of tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to make the claim, or has otherwise made arrangements which directly or indirectly provide the ultimate vendor with reimbursement of the tax. Help filing 1040x Has in its possession an unexpired certificate similar to Model Certificate R in the Appendix and has no reason to believe any of the information in the certificate is false. Help filing 1040x Taxpayer identification number. Help filing 1040x   To file a claim, you must have a taxpayer identification number. Help filing 1040x Your taxpayer identification number can be an: Employer identification number (EIN), Social security number (SSN), or Individual taxpayer identification number (ITIN), if you are an alien individual and do not have and are not eligible to get an SSN. Help filing 1040x   If you normally file only a U. Help filing 1040x S. Help filing 1040x individual income tax return (such as Form 1040 or 1040NR), use your SSN or ITIN. Help filing 1040x You get an SSN by filing Form SS-5, Application for a Social Security Card, with the Social Security Administration. Help filing 1040x To get an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. Help filing 1040x   If you operate a business, use your EIN. Help filing 1040x If you do not have an EIN, you may apply for one online. Help filing 1040x Go to the IRS website at irs. Help filing 1040x gov/businesses/small and click on the “Employer ID Numbers (EINs)” link. Help filing 1040x You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Help filing 1040x Claiming A Refund Generally, you may claim a refund of excise taxes on Form 8849. Help filing 1040x Complete and attach to Form 8849 the appropriate Form 8849 schedules. Help filing 1040x The instructions for Form 8849 and the separate instructions for each schedule explain the requirements for making a claim for refund. Help filing 1040x If you file Form 720, you can use the Schedule C (Form 720) for your refund claims for the quarter. Help filing 1040x See the Instructions for Form 720. Help filing 1040x Do not claim a refund on Form 8849 for any amount for which you have filed or will file a claim on Schedule C (Form 720) or Form 4136. Help filing 1040x The alternative fuel mixture credit must be claimed on Schedule C (Form 720) against your section 4081 taxable fuel liability for gasoline, diesel, and kerosene and any excess is not allowed. Help filing 1040x The alternative fuel credit must first be claimed on Schedule C (Form 720) against your section 4041 taxable fuel liability for alternative fuel and CNG. Help filing 1040x To the extent the alternative fuel credit exceeds this taxable fuel liability, a payment is allowed and may be claimed as a credit on Schedule C (Form 720), or as an income tax credit on Forms 4136, 6478, or 8864, as applicable. Help filing 1040x Only one claim may be made for any particular amount of alternative fuel. Help filing 1040x Claiming a Credit on Form 4136 For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit cannot be claimed on Form 4136. Help filing 1040x See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2, earlier. Help filing 1040x A credit may be claimed for certain uses and sales of fuels on Form 4136 when you file your income tax return at the end of the year. Help filing 1040x If you meet certain requirements (discussed earlier), you may be able to make a claim during the year. Help filing 1040x Credit only. Help filing 1040x   You can claim the following taxes only as a credit on Form 4136. Help filing 1040x Tax on fuels used for nontaxable uses if the total for your tax year is less than $750. Help filing 1040x Tax on fuel you did not include in any claim for refund previously filed for any quarter of your tax year. Help filing 1040x Tax on fuel you used in mobile machinery (off-highway business use) that traveled less than 7,500 miles on public highways. Help filing 1040x Do not claim a credit for any amount for which you have filed a refund claim on Form 8849 or credit on Schedule C (Form 720). Help filing 1040x When to file. Help filing 1040x   You can claim a fuel tax credit on your income tax return for the year you used the fuel (or sold the fuel in the case of a registered ultimate vendor claim). Help filing 1040x You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. Help filing 1040x Generally, you must file an amended return by the later of 3 years from the date you filed your original return or within 2 years from the date you paid the income tax. Help filing 1040x How to claim a credit. Help filing 1040x   How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, or farmers' cooperative association. Help filing 1040x Individuals. Help filing 1040x   You claim the credit on the “Credits from” line of Form 1040. Help filing 1040x Also check box b on that line. Help filing 1040x If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit. Help filing 1040x Partnerships. Help filing 1040x   Partnerships (other than electing large partnerships) claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Help filing 1040x , showing each partner's share of the number of gallons of each fuel sold or used for a non
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SOI Tax Stats - Charities & Other Tax-Exempt Organizations Statistics

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Snapshot of Charities & Other Tax-Exempt Organizations Statistics

This section contains statistical tables, articles, and other information on charities and other tax-exempt organizations.

Nonprofit charitable organizations are exempt under Section 501(c)(3) of the Internal Revenue Code. Other tax-exempt organizations covered in this section include those exempt under Sections 501(c)(4) through 501(c)(9). Descriptions of these organizations are below:

501(c)(3)

Religious, educational, charitable, scientific, or literary organizations; testing for public safety organizations. Also, organizations preventing cruelty to children or animals, or fostering national or international amateur sports competition

501(c)(4)

Civic leagues, social welfare organizations, and local associations of employees

501(c)(5)

Labor, agriculture, and horticultural organizations

501(c)(6)

Business leagues, chambers of commerce, and real estate boards

501(c)(7)

Social and recreational clubs

501(c)(8)

Fraternal beneficiary societies and associations

501(c)(9)

Voluntary employee beneficiary associations

Data are compiled from Form 990, Return of Organization Exempt from Income Tax, and Form 990-EZ.

For information about selected terms and concepts, a description of the data sources and limitations, and links to recent revisions of Forms 990 and Forms 990-EZ, please visit the Charities and Other Tax-Exempt Organizations Study Metadata page.
 


Statistical Tables

The following tables are available as Microsoft Excel®  files.  A free Excel viewer is available for download, if needed.

501(c)(3) Organizations:
 Form 990 - Balance Sheet and Income Statement Items
  Classified by: Size of Total Assets
  Tax Years: 2010  2009  2008  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1996  1995  1994  1993  1992  1991  1989  1988
 
 Form 990 - Functional Expenses
  Classified by: Size of Contributions Received
  Tax Years: 1996  1989  1988
 
 Form 990-EZ - Balance Sheet and Income Statement Items
  Classified by: Size of Total Assets
  Tax Years: 1996

 
501(c)(3) through 501(c)(9) Organizations:
Form 990 - Balance Sheet and Income Statement Items
  Classified by: Internal Revenue Code Section
  Tax Years: 2010  2009  2008  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1995  1994  1993  1992  1991  1990  1989  1988
 
 Form 990Functional Expenses
  Classified by: Internal Revenue Code Section
  Tax Years: 2010  2009  2008  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1995  1994  1993  1992  1991  1989  1988
 
 Form 990-EZ - Balance Sheet and Income Statement Items
  Classified by: Internal Revenue Code Section
  Tax Years: 2010  2009  2008  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1995  1994  1993  1992  1991  1990  1989

 
Excise Taxes Reported by Charities, Private Foundations, and Split-Interest Trusts on Form 4720
  Classified by: Type of Excise Tax
  Calendar Years: 2011  2010  2009  2008  2007  2006  2005  2004  2003

 

To make customized tables using this data, please visit the Statistics of Income Tax Stats Table Wizard.

 

Historical Tables:
Table 16:  Nonprofit Charitable Organization and Domestic Private Foundation Information Returns, and Tax-Exempt Organization Business Income Tax Returns:  Selected Financial Data, Expanded
 Published as:   SOI Bulletin Historical Table 16

 

Projections
For selected tax returns, including the Form 990 (and 990-EZ), IRS's Office of Research produces annual forecasts of the number of returns that will be filed in future years.
  Projections of Returns to be Filed in Future Calendar Years
 

Publications and Papers

The following are available as PDF files. A free Adobe® reader is available for download, if needed.


Microdata Files

Microdata are individual organization-level data that can be used for research purposes.

The data are contained in ASCII flat files. Documentation to assist with the files is included. (Free Adobe Acrobat reader and Microsoft Excel viewer software is available for download, if needed.)
 

SOI Sample Data Files

This section contains microdata files for all Forms 990 and 990-EZ sampled for the annual SOI studies of tax-exempt organizations.

The annual samples include Internal Revenue Code section 501(c)(3) organizations and section 501(c)(4)–(9) organizations. Sampling rates ranged from 1 percent for small-asset classes to 100 percent for large-asset classes. Microdata records contain information on balance sheets and income statements, as well as weights (to estimate the population), for each organization.

To access the data, click on one of the following years to access a page with links to both data and documentation files.

2010  2009  2008  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1996  1995  1994  1993  1992  1991  1990  1989  1988  1987  1986  1985

To make customized tables using this data, please visit the Statistics of Income Tax Stats Table Wizard.
 

IRS Population Data

This page contains microdata files for all Forms 990, 990-EZ, and 990-PF returns filed by active organizations.  Data are from the IRS Exempt Organization Master File.


Other IRS Data and Related Links

For tax administration data on this topic, as well as other types of taxes, choose from the links below.

Return to Tax Stats home page

Page Last Reviewed or Updated: 27-Mar-2014

The Help Filing 1040x

Help filing 1040x 1. Help filing 1040x   Investment Income Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: General InformationSSN for joint account. Help filing 1040x Custodian account for your child. Help filing 1040x Penalty for failure to supply SSN. Help filing 1040x Certification. Help filing 1040x Underreported interest and dividends. Help filing 1040x How to stop backup withholding due to underreporting. Help filing 1040x How to stop backup withholding due to an incorrect identification number. Help filing 1040x Reporting backup withholding. Help filing 1040x Nonresident aliens. Help filing 1040x Penalties. Help filing 1040x Savings account with parent as trustee. Help filing 1040x Interest IncomeInterest not reported on Form 1099-INT. Help filing 1040x Nominees. Help filing 1040x Incorrect amount. Help filing 1040x Information reporting requirement. Help filing 1040x Taxable Interest — General Below-Market Loans U. Help filing 1040x S. Help filing 1040x Savings Bonds U. Help filing 1040x S. Help filing 1040x Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Discount on Debt InstrumentsOriginal Issue Discount (OID) Market Discount Bonds Discount on Short-Term Obligations Election To Report All Interest as OID When To Report Interest IncomeConstructive receipt. Help filing 1040x How To Report Interest IncomeSchedule B (Form 1040A or 1040). Help filing 1040x Worksheet for savings bonds distributed from a retirement or profit-sharing plan. Help filing 1040x File Form 1099-INT with the IRS. Help filing 1040x Dividends and Other DistributionsDividends not reported on Form 1099-DIV. Help filing 1040x Nominees. Help filing 1040x Ordinary Dividends Capital Gain Distributions Nondividend Distributions Liquidating Distributions Distributions of Stock and Stock Rights Other Distributions How To Report Dividend IncomeElection. Help filing 1040x Independent contractor. Help filing 1040x Investment interest deducted. Help filing 1040x Exception 1. Help filing 1040x Exception 2. Help filing 1040x Undistributed capital gains. Help filing 1040x File Form 1099-DIV with the IRS. Help filing 1040x Stripped Preferred Stock REMICs, FASITs, and Other CDOsREMICs Collateralized Debt Obligations (CDOs) FASITs S CorporationsLimit on losses and deductions. Help filing 1040x Passive activity losses. Help filing 1040x Form 8582. Help filing 1040x Investment ClubsInvestments in name of member. Help filing 1040x Tax Treatment of the Club Topics - This chapter discusses: Interest Income , Discount on Debt Instruments , When To Report Interest Income , How To Report Interest Income , Dividends and Other Distributions , How To Report Dividend Income , Stripped Preferred Stock , Real estate mortgage investment conduits (REMICs), financial asset securitization investment trusts (FASITs), and other collateralized debt obligations (CDOs) , S Corporations , and Investment Clubs . Help filing 1040x Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 537 Installment Sales 590 Individual Retirement Arrangements (IRAs) 925 Passive Activity and At-Risk Rules 1212 Guide to Original Issue Discount (OID) Instruments Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends Schedule D (Form 1040) Capital Gains and Losses 1040 U. Help filing 1040x S. Help filing 1040x Individual Income Tax Return 1040A U. Help filing 1040x S. Help filing 1040x Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1099 General Instructions for Certain Information Returns 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains 3115 Application for Change in Accounting Method 6251 Alternative Minimum Tax — Individuals 8582 Passive Activity Loss Limitations 8615 Tax for Certain Children Who Have Unearned Income 8814 Parents' Election To Report Child's Interest and Dividends 8815 Exclusion of Interest From Series EE and I U. Help filing 1040x S. Help filing 1040x Savings Bonds Issued After 1989 8818 Optional Form To Record Redemption of Series EE and I U. Help filing 1040x S. Help filing 1040x Savings Bonds Issued After 1989 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets 8960 Net Investment Income Tax—Individuals, Estates, and Trusts See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Help filing 1040x General Information A few items of general interest are covered here. Help filing 1040x Recordkeeping. Help filing 1040x You should keep a list showing sources and investment income amounts you receive during the year. Help filing 1040x Also keep the forms you receive showing your investment income (Forms 1099-INT, Interest Income, and 1099-DIV, Dividends and Distributions, for example) as an important part of your records. Help filing 1040x Net investment income tax (NIIT). Help filing 1040x   Beginning in 2013, you may be subject to the NIIT. Help filing 1040x The NIIT is a 3. Help filing 1040x 8% tax on the lesser of your net investment income or the amount of your modified adjusted gross income (MAGI) that is over a threshold amount based on your filing status. Help filing 1040x    Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household (with qualifying person) $200,000 Qualifying Widow(er) with dependent child $250,000    For more information, see Form 8960 and Instructions for Form 8960. Help filing 1040x Tax on unearned income of certain children. Help filing 1040x   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Help filing 1040x This may happen if all of the following are true. Help filing 1040x The child had more than $2,000 of unearned income. Help filing 1040x The child is required to file a tax return. Help filing 1040x The child was: Under age 18 at the end of 2013, Age 18 at the end of 2013 and did not have earned income that was more than half of the child's support, or A full-time student over age 18 and under age 24 at the end of 2013 and did not have earned income that was more than half of the child's support. Help filing 1040x At least one of the child's parents was alive at the end of 2013. Help filing 1040x The child does not file a joint return for 2013. Help filing 1040x A child born on January 1, 1996, is considered to be age 18 at the end of 2013; a child born on January 1, 1995, is considered to be age 19 at the end of 2013; a child born on January 1, 1990, is considered to be age 24 at the end of 2013. Help filing 1040x   If all of these statements are true, Form 8615 must be completed and attached to the child's tax return. Help filing 1040x If any of these statements is not true, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Help filing 1040x    However, the parent can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Help filing 1040x Use Form 8814 for this purpose. Help filing 1040x   For more information about the tax on unearned income of children and the parents' election, see Publication 929, Tax Rules for Children and Dependents. Help filing 1040x Beneficiary of an estate or trust. Help filing 1040x   Interest, dividends, and other investment income you receive as a beneficiary of an estate or trust is generally taxable income. Help filing 1040x You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Help filing 1040x , from the fiduciary. Help filing 1040x Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Help filing 1040x Social security number (SSN). Help filing 1040x   You must give your name and SSN or individual tax identification number (ITIN) to any person required by federal tax law to make a return, statement, or other document that relates to you. Help filing 1040x This includes payers of interest and dividends. Help filing 1040x If you do not give your SSN or ITIN to the payer of interest, you may have to pay a penalty. Help filing 1040x SSN for joint account. Help filing 1040x   If the funds in a joint account belong to one person, list that person's name first on the account and give that person's SSN to the payer. Help filing 1040x (For information on who owns the funds in a joint account, see Joint accounts , later. Help filing 1040x ) If the joint account contains combined funds, give the SSN of the person whose name is listed first on the account. Help filing 1040x This is because only one name and SSN can be shown on Form 1099. Help filing 1040x   These rules apply both to joint ownership by a married couple and to joint ownership by other individuals. Help filing 1040x For example, if you open a joint savings account with your child using funds belonging to the child, list the child's name first on the account and give the child's SSN. Help filing 1040x Custodian account for your child. Help filing 1040x   If your child is the actual owner of an account that is recorded in your name as custodian for the child, give the child's SSN to the payer. Help filing 1040x For example, you must give your child's SSN to the payer of dividends on stock owned by your child, even though the dividends are paid to you as custodian. Help filing 1040x Penalty for failure to supply SSN. Help filing 1040x   You will be subject to a penalty if, when required, you fail to: Include your SSN on any return, statement, or other document, Give your SSN to another person who must include it on any return, statement, or other document, or Include the SSN of another person on any return, statement, or other document. Help filing 1040x The penalty is $50 for each failure up to a maximum penalty of $100,000 for any calendar year. Help filing 1040x   You will not be subject to this penalty if you can show that your failure to provide the SSN was due to reasonable cause and not to willful neglect. Help filing 1040x   If you fail to supply an SSN, you may also be subject to backup withholding. Help filing 1040x Backup withholding. Help filing 1040x   Your investment income is generally not subject to regular withholding. Help filing 1040x However, it may be subject to backup withholding to ensure that income tax is collected on the income. Help filing 1040x Under backup withholding, the bank, broker, or other payer of interest, original issue discount (OID), dividends, cash patronage dividends, or royalties must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Help filing 1040x   Backup withholding applies if: You do not give the payer your identification number (either a social security number or an employer identification number) in the required manner, The IRS notifies the payer that you gave an incorrect identification number, The IRS notifies the payer that you are subject to backup withholding on interest or dividends because you have underreported interest or dividends on your income tax return, or You are required, but fail, to certify that you are not subject to backup withholding for the reason described in (3). Help filing 1040x Certification. Help filing 1040x   For new accounts paying interest or dividends, you must certify under penalties of perjury that your SSN is correct and that you are not subject to backup withholding. Help filing 1040x Your payer will give you a Form W-9, Request for Taxpayer Identification Number and Certification, or similar form, to make this certification. Help filing 1040x If you fail to make this certification, backup withholding may begin immediately on your new account or investment. Help filing 1040x Underreported interest and dividends. Help filing 1040x   You will be considered to have underreported your interest and dividends if the IRS has determined for a tax year that: You failed to include any part of a reportable interest or dividend payment required to be shown on your return, or You were required to file a return and to include a reportable interest or dividend payment on that return, but you failed to file the return. Help filing 1040x How to stop backup withholding due to underreporting. Help filing 1040x   If you have been notified that you underreported interest or dividends, you can request a determination from the IRS to prevent backup withholding from starting or to stop backup withholding once it has begun. Help filing 1040x You must show that at least one of the following situations applies. Help filing 1040x No underreporting occurred. Help filing 1040x You have a bona fide dispute with the IRS about whether underreporting occurred. Help filing 1040x Backup withholding will cause or is causing an undue hardship, and it is unlikely that you will underreport interest and dividends in the future. Help filing 1040x You have corrected the underreporting by filing a return if you did not previously file one and by paying all taxes, penalties, and interest due for any underreported interest or dividend payments. Help filing 1040x   If the IRS determines that backup withholding should stop, it will provide you with a certification and will notify the payers who were sent notices earlier. Help filing 1040x How to stop backup withholding due to an incorrect identification number. Help filing 1040x   If you have been notified by a payer that you are subject to backup withholding because you have provided an incorrect SSN or employer identification number, you can stop it by following the instructions the payer gives you. Help filing 1040x Reporting backup withholding. Help filing 1040x   If backup withholding is deducted from your interest or dividend income or other reportable payment, the bank or other business must give you an information return for the year (for example, a Form 1099-INT) indicating the amount withheld. Help filing 1040x The information return will show any backup withholding as “Federal income tax withheld. Help filing 1040x ” Nonresident aliens. Help filing 1040x    Generally, payments made to nonresident aliens are not subject to backup withholding. Help filing 1040x You can use Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, to certify exempt status. Help filing 1040x However, this does not exempt you from the 30% (or lower treaty) withholding rate that may apply to your investment income. Help filing 1040x For information on the 30% rate, see Publication 519, U. Help filing 1040x S. Help filing 1040x Tax Guide for Aliens. Help filing 1040x Penalties. Help filing 1040x   There are civil and criminal penalties for giving false information to avoid backup withholding. Help filing 1040x The civil penalty is $500. Help filing 1040x The criminal penalty, upon conviction, is a fine of up to $1,000, or imprisonment of up to 1 year, or both. Help filing 1040x Where to report investment income. Help filing 1040x   Table 1-1 gives an overview of the forms and schedules to use to report some common types of investment income. Help filing 1040x But see the rest of this publication for detailed information about reporting investment income. Help filing 1040x Joint accounts. Help filing 1040x   If two or more persons hold property (such as a savings account, bond, or stock) as joint tenants, tenants by the entirety, or tenants in common, each person's share of any interest or dividends from the property is determined by local law. Help filing 1040x Community property states. Help filing 1040x   If you are married and receive a distribution that is community income, one-half of the distribution is generally considered to be received by each spouse. Help filing 1040x If you file separate returns, you must each report one-half of any taxable distribution. Help filing 1040x See Publication 555, Community Property, for more information on community income. Help filing 1040x   If the distribution is not considered community property and you and your spouse file separate returns, each of you must report your separate taxable distributions. Help filing 1040x Example. Help filing 1040x You and your spouse have a joint money market account. Help filing 1040x Under state law, half the income from the account belongs to you, and half belongs to your spouse. Help filing 1040x If you file separate returns, you each report half the income. Help filing 1040x Income from property given to a child. Help filing 1040x   Property you give as a parent to your child under the Model Gifts of Securities to Minors Act, the Uniform Gifts to Minors Act, or any similar law becomes the child's property. Help filing 1040x   Income from the property is taxable to the child, except that any part used to satisfy a legal obligation to support the child is taxable to the parent or guardian having that legal obligation. Help filing 1040x Savings account with parent as trustee. Help filing 1040x   Interest income from a savings account opened for a minor child, but placed in the name and subject to the order of the parents as trustees, is taxable to the child if, under the law of the state in which the child resides, both of the following are true. Help filing 1040x The savings account legally belongs to the child. Help filing 1040x The parents are not legally permitted to use any of the funds to support the child. Help filing 1040x Table 1-1. Help filing 1040x Where To Report Common Types of Investment Income (For detailed information about reporting investment income, see the rest of this publication, especially How To Report Interest Income and How To Report Dividend Income in chapter 1. Help filing 1040x ) Type of Income If you file Form 1040, report on . Help filing 1040x . Help filing 1040x . Help filing 1040x If you can file Form 1040A, report on . Help filing 1040x . Help filing 1040x . Help filing 1040x If you can file Form 1040EZ, report on . Help filing 1040x . Help filing 1040x . Help filing 1040x Tax-exempt interest (Form 1099-INT, box 8) Line 8b Line 8b Space to the left of line 2 (enter “TEI” and the amount) Taxable interest that totals $1,500 or less Line 8a (You may need to file Schedule B as well. Help filing 1040x ) Line 8a (You may need to file Schedule B as well. Help filing 1040x ) Line 2 Taxable interest that totals more than $1,500 Line 8a; also use Schedule B, line 1 Line 8a; also use Schedule B, line 1   Savings bond interest you will exclude because of higher education expenses Schedule B; also use Form 8815 Schedule B; also use Form 8815   Ordinary dividends that total $1,500 or less Line 9a (You may need to file Schedule B as well. Help filing 1040x ) Line 9a (You may need to file Schedule B as well. Help filing 1040x )   Ordinary dividends that total more than $1,500 Line 9a; also use Schedule B, line 5 Line 9a; also use Schedule B, line 5   Qualified dividends (if you do not have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2 Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2   Qualified dividends (if you have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet, line 2 You cannot use Form 1040A    You cannot use Form 1040EZ Capital gain distributions (if you do not have to file Schedule D) Line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3 Line 10; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3   Capital gain distributions (if you have to file Schedule D) Schedule D, line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     Section 1250, 1202, or collectibles gain (Form 1099-DIV, box 2b, 2c, or 2d) Form 8949 and Schedule D     Nondividend distributions (Form 1099-DIV, box 3) Generally not reported*     Undistributed capital gains (Form 2439, boxes 1a - 1d) Schedule D     Gain or loss from sales of stocks or bonds Line 13; also use Form 8949, Schedule D, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet You cannot use Form 1040A   Gain or loss from exchanges of like-kind investment property Line 13; also use Schedule D, Form 8824, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     *Report any amounts in excess of your basis in your mutual fund shares on Form 8949. Help filing 1040x Use Part II if you held the shares more than 1 year. Help filing 1040x Use Part I if you held your mutual fund shares 1 year or less. Help filing 1040x For details on Form 8949, see Reporting Capital Gains and Losses in chapter 4, and the Instructions for Form 8949. Help filing 1040x Accuracy-related penalty. Help filing 1040x   An accuracy-related penalty of 20% can be charged for underpayments of tax due to negligence or disregard of rules or regulations or substantial understatement of tax. Help filing 1040x For information on the penalty and any interest that applies, see Penalties in chapter 2. Help filing 1040x Interest Income This section discusses the tax treatment of different types of interest income. Help filing 1040x In general, any interest that you receive or that is credited to your account and can be withdrawn is taxable income. Help filing 1040x (It does not have to be entered in your passbook. Help filing 1040x ) Exceptions to this rule are discussed later. Help filing 1040x Form 1099-INT. Help filing 1040x   Interest income is generally reported to you on Form 1099-INT, or a similar statement, by banks, savings and loans, and other payers of interest. Help filing 1040x This form shows you the interest you received during the year. Help filing 1040x Keep this form for your records. Help filing 1040x You do not have to attach it to your tax return. Help filing 1040x   Report on your tax return the total interest income you receive for the tax year. Help filing 1040x Interest not reported on Form 1099-INT. Help filing 1040x   Even if you do not receive Form 1099-INT, you must still report all of your interest income. Help filing 1040x For example, you may receive distributive shares of interest from partnerships or S corporations. Help filing 1040x This interest is reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Help filing 1040x , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Help filing 1040x Nominees. Help filing 1040x   Generally, if someone receives interest as a nominee for you, that person must give you a Form 1099-INT showing the interest received on your behalf. Help filing 1040x   If you receive a Form 1099-INT that includes amounts belonging to another person, see the discussion on Nominee distributions , later, under How To Report Interest Income. Help filing 1040x Incorrect amount. Help filing 1040x   If you receive a Form 1099-INT that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Help filing 1040x The new Form 1099-INT you receive will be marked “Corrected. Help filing 1040x ” Form 1099-OID. Help filing 1040x   Reportable interest income also may be shown on Form 1099-OID, Original Issue Discount. Help filing 1040x For more information about amounts shown on this form, see Original Issue Discount (OID) , later in this chapter. Help filing 1040x Exempt-interest dividends. Help filing 1040x   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Help filing 1040x (However, see Information reporting requirement , next. Help filing 1040x ) Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Help filing 1040x You do not reduce your basis for distributions that are exempt-interest dividends. Help filing 1040x Information reporting requirement. Help filing 1040x   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file. Help filing 1040x This is an information reporting requirement and does not change the exempt-interest dividends into taxable income. Help filing 1040x See How To Report Interest Income , later. Help filing 1040x Note. Help filing 1040x Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Help filing 1040x The exempt-interest dividends subject to the alternative minimum tax are shown in box 11 of Form 1099-DIV. Help filing 1040x See Form 6251 and its instructions for more information about this tax. Help filing 1040x Private activity bonds are discussed later under State or Local Government Obligations. Help filing 1040x Interest on VA dividends. Help filing 1040x   Interest on insurance dividends left on deposit with the Department of Veterans Affairs (VA) is not taxable. Help filing 1040x This includes interest paid on dividends on converted United States Government Life Insurance policies and on National Service Life Insurance policies. Help filing 1040x Individual retirement arrangements (IRAs). Help filing 1040x   Interest on a Roth IRA generally is not taxable. Help filing 1040x Interest on a traditional IRA is tax deferred. Help filing 1040x You generally do not include it in your income until you make withdrawals from the IRA. Help filing 1040x See Publication 590 for more information. Help filing 1040x Taxable Interest — General Taxable interest includes interest you receive from bank accounts, loans you make to others, and other sources. Help filing 1040x The following are some sources of taxable interest. Help filing 1040x Dividends that are actually interest. Help filing 1040x   Certain distributions commonly called dividends are actually interest. Help filing 1040x You must report as interest so-called “dividends” on deposits or on share accounts in: Cooperative banks, Credit unions, Domestic building and loan associations, Domestic savings and loan associations, Federal savings and loan associations, and Mutual savings banks. Help filing 1040x  The “dividends” will be shown as interest income on Form 1099-INT. Help filing 1040x Money market funds. Help filing 1040x   Money market funds are offered by nonbank financial institutions such as mutual funds and stock brokerage houses, and pay dividends. Help filing 1040x Generally, amounts you receive from money market funds should be reported as dividends, not as interest. Help filing 1040x Certificates of deposit and other deferred interest accounts. Help filing 1040x   If you open any of these accounts, interest may be paid at fixed intervals of 1 year or less during the term of the account. Help filing 1040x You generally must include this interest in your income when you actually receive it or are entitled to receive it without paying a substantial penalty. Help filing 1040x The same is true for accounts that mature in 1 year or less and pay interest in a single payment at maturity. Help filing 1040x If interest is deferred for more than 1 year, see Original Issue Discount (OID) , later. Help filing 1040x Interest subject to penalty for early withdrawal. Help filing 1040x   If you withdraw funds from a deferred interest account before maturity, you may have to pay a penalty. Help filing 1040x You must report the total amount of interest paid or credited to your account during the year, without subtracting the penalty. Help filing 1040x See Penalty on early withdrawal of savings under How To Report Interest Income, later, for more information on how to report the interest and deduct the penalty. Help filing 1040x Money borrowed to invest in certificate of deposit. Help filing 1040x   The interest you pay on money borrowed from a bank or savings institution to meet the minimum deposit required for a certificate of deposit from the institution and the interest you earn on the certificate are two separate items. Help filing 1040x You must report the total interest you earn on the certificate in your income. Help filing 1040x If you itemize deductions, you can deduct the interest you pay as investment interest, up to the amount of your net investment income. Help filing 1040x See Interest Expenses in chapter 3. Help filing 1040x Example. Help filing 1040x You deposited $5,000 with a bank and borrowed $5,000 from the bank to make up the $10,000 minimum deposit required to buy a 6-month certificate of deposit. Help filing 1040x The certificate earned $575 at maturity in 2013, but you received only $265, which represented the $575 you earned minus $310 interest charged on your $5,000 loan. Help filing 1040x The bank gives you a Form 1099-INT for 2013 showing the $575 interest you earned. Help filing 1040x The bank also gives you a statement showing that you paid $310 interest for 2013. Help filing 1040x You must include the $575 in your income. Help filing 1040x If you itemize your deductions on Schedule A (Form 1040), Itemized Deductions, you can deduct $310, subject to the net investment income limit. Help filing 1040x Gift for opening account. Help filing 1040x   If you receive noncash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest. Help filing 1040x   For deposits of less than $5,000, gifts or services valued at more than $10 must be reported as interest. Help filing 1040x For deposits of $5,000 or more, gifts or services valued at more than $20 must be reported as interest. Help filing 1040x The value is determined by the cost to the financial institution. Help filing 1040x Example. Help filing 1040x You open a savings account at your local bank and deposit $800. Help filing 1040x The account earns $20 interest. Help filing 1040x You also receive a $15 calculator. Help filing 1040x If no other interest is credited to your account during the year, the Form 1099-INT you receive will show $35 interest for the year. Help filing 1040x You must report $35 interest income on your tax return. Help filing 1040x Interest on insurance dividends. Help filing 1040x   Interest on insurance dividends left on deposit with an insurance company that can be withdrawn annually is taxable to you in the year it is credited to your account. Help filing 1040x However, if you can withdraw it only on the anniversary date of the policy (or other specified date), the interest is taxable in the year that date occurs. Help filing 1040x Prepaid insurance premiums. Help filing 1040x   Any increase in the value of prepaid insurance premiums, advance premiums, or premium deposit funds is interest if it is applied to the payment of premiums due on insurance policies or made available for you to withdraw. Help filing 1040x U. Help filing 1040x S. Help filing 1040x obligations. Help filing 1040x   Interest on U. Help filing 1040x S. Help filing 1040x obligations, such as U. Help filing 1040x S. Help filing 1040x Treasury bills, notes, and bonds, issued by any agency or instrumentality of the United States is taxable for federal income tax purposes. Help filing 1040x Interest on tax refunds. Help filing 1040x   Interest you receive on tax refunds is taxable income. Help filing 1040x Interest on condemnation award. Help filing 1040x   If the condemning authority pays you interest to compensate you for a delay in payment of an award, the interest is taxable. Help filing 1040x Installment sale payments. Help filing 1040x   If a contract for the sale or exchange of property provides for deferred payments, it also usually provides for interest payable with the deferred payments. Help filing 1040x That interest is taxable when you receive it. Help filing 1040x If little or no interest is provided for in a deferred payment contract, part of each payment may be treated as interest. Help filing 1040x See Unstated Interest and Original Issue Discount (OID) in Publication 537. Help filing 1040x Interest on annuity contract. Help filing 1040x   Accumulated interest on an annuity contract you sell before its maturity date is taxable. Help filing 1040x Usurious interest. Help filing 1040x   Usurious interest is interest charged at an illegal rate. Help filing 1040x This is taxable as interest unless state law automatically changes it to a payment on the principal. Help filing 1040x Interest income on frozen deposits. Help filing 1040x   Exclude from your gross income interest on frozen deposits. Help filing 1040x A deposit is frozen if, at the end of the year, you cannot withdraw any part of the deposit because: The financial institution is bankrupt or insolvent, or The state in which the institution is located has placed limits on withdrawals because other financial institutions in the state are bankrupt or insolvent. Help filing 1040x   The amount of interest you must exclude is the interest that was credited on the frozen deposits minus the sum of: The net amount you withdrew from these deposits during the year, and The amount you could have withdrawn as of the end of the year (not reduced by any penalty for premature withdrawals of a time deposit). Help filing 1040x If you receive a Form 1099-INT for interest income on deposits that were frozen at the end of 2013, see Frozen deposits under How To Report Interest Income for information about reporting this interest income exclusion on your tax return. Help filing 1040x   The interest you exclude is treated as credited to your account in the following year. Help filing 1040x You must include it in income in the year you can withdraw it. Help filing 1040x Example. Help filing 1040x $100 of interest was credited on your frozen deposit during the year. Help filing 1040x You withdrew $80 but could not withdraw any more as of the end of the year. Help filing 1040x You must include $80 in your income and exclude $20 from your income for the year. Help filing 1040x You must include the $20 in your income for the year you can withdraw it. Help filing 1040x Bonds traded flat. Help filing 1040x    If you buy a bond at a discount when interest has been defaulted or when the interest has accrued but has not been paid, the transaction is described as trading a bond flat. Help filing 1040x The defaulted or unpaid interest is not income and is not taxable as interest if paid later. Help filing 1040x When you receive a payment of that interest, it is a return of capital that reduces the remaining cost basis of your bond. Help filing 1040x Interest that accrues after the date of purchase, however, is taxable interest income for the year received or accrued. Help filing 1040x See Bonds Sold Between Interest Dates , later in this chapter. Help filing 1040x Below-Market Loans If you make a below-market gift or demand loan, you must report as interest income any forgone interest (defined later) from that loan. Help filing 1040x The below-market loan rules and exceptions are described in this section. Help filing 1040x For more information, see section 7872 of the Internal Revenue Code and its regulations. Help filing 1040x If you receive a below-market loan, you may be able to deduct the forgone interest as well as any interest you actually paid, but not if it is personal interest. Help filing 1040x Loans subject to the rules. Help filing 1040x   The rules for below-market loans apply to: Gift loans, Pay-related loans, Corporation-shareholder loans, Tax avoidance loans, and Certain loans made to qualified continuing care facilities under a continuing care contract. Help filing 1040x A pay-related loan is any below-market loan between an employer and an employee or between an independent contractor and a person for whom the contractor provides services. Help filing 1040x A tax avoidance loan is any below-market loan where the avoidance of federal tax is one of the main purposes of the interest arrangement. Help filing 1040x Forgone interest. Help filing 1040x   For any period, forgone interest is: The amount of interest that would be payable for that period if interest accrued on the loan at the applicable federal rate and was payable annually on December 31, minus Any interest actually payable on the loan for the period. Help filing 1040x Applicable federal rate. Help filing 1040x   Applicable federal rates are published by the IRS each month in the Internal Revenue Bulletin. Help filing 1040x Some IRS offices have these bulletins available for research. Help filing 1040x See chapter 5, How To Get Tax Help , for other ways to get this information. Help filing 1040x Rules for below-market loans. Help filing 1040x   The rules that apply to a below-market loan depend on whether the loan is a gift loan, demand loan, or term loan. Help filing 1040x Gift and demand loans. Help filing 1040x   A gift loan is any below-market loan where the forgone interest is in the nature of a gift. Help filing 1040x   A demand loan is a loan payable in full at any time upon demand by the lender. Help filing 1040x A demand loan is a below-market loan if no interest is charged or if interest is charged at a rate below the applicable federal rate. Help filing 1040x   A demand loan or gift loan that is a below-market loan is generally treated as an arm's-length transaction in which the lender is treated as having made: A loan to the borrower in exchange for a note that requires the payment of interest at the applicable federal rate, and An additional payment to the borrower in an amount equal to the forgone interest. Help filing 1040x The borrower is generally treated as transferring the additional payment back to the lender as interest. Help filing 1040x The lender must report that amount as interest income. Help filing 1040x   The lender's additional payment to the borrower is treated as a gift, dividend, contribution to capital, pay for services, or other payment, depending on the substance of the transaction. Help filing 1040x The borrower may have to report this payment as taxable income, depending on its classification. Help filing 1040x These transfers are considered to occur annually, generally on December 31. Help filing 1040x Term loans. Help filing 1040x   A term loan is any loan that is not a demand loan. Help filing 1040x A term loan is a below-market loan if the amount of the loan is more than the present value of all payments due under the loan. Help filing 1040x   A lender who makes a below-market term loan other than a gift loan is treated as transferring an additional lump-sum cash payment to the borrower (as a dividend, contribution to capital, etc. Help filing 1040x ) on the date the loan is made. Help filing 1040x The amount of this payment is the amount of the loan minus the present value, at the applicable federal rate, of all payments due under the loan. Help filing 1040x An equal amount is treated as original issue discount (OID). Help filing 1040x The lender must report the annual part of the OID as interest income. Help filing 1040x The borrower may be able to deduct the OID as interest expense. Help filing 1040x See Original Issue Discount (OID) , later. Help filing 1040x Exceptions to the below-market loan rules. Help filing 1040x   Exceptions to the below-market loan rules are discussed here. Help filing 1040x Exception for loans of $10,000 or less. Help filing 1040x   The rules for below-market loans do not apply to any day on which the total outstanding amount of loans between the borrower and lender is $10,000 or less. Help filing 1040x This exception applies only to: Gift loans between individuals if the gift loan is not directly used to buy or carry income-producing assets, and Pay-related loans or corporation-shareholder loans if the avoidance of federal tax is not a principal purpose of the interest arrangement. Help filing 1040x This exception does not apply to a term loan described in (2) earlier that previously has been subject to the below-market loan rules. Help filing 1040x Those rules will continue to apply even if the outstanding balance is reduced to $10,000 or less. Help filing 1040x Exception for loans to continuing care facilities. Help filing 1040x   Loans to qualified continuing care facilities under continuing care contracts are not subject to the rules for below-market loans for the calendar year if the lender or the lender's spouse is age 62 or older at the end of the year. Help filing 1040x For the definitions of qualified continuing care facility and continuing care contract, see Internal Revenue Code section 7872(h). Help filing 1040x Exception for loans without significant tax effect. Help filing 1040x   Loans are excluded from the below-market loan rules if their interest arrangements do not have a significant effect on the federal tax liability of the borrower or the lender. Help filing 1040x These loans include: Loans made available by the lender to the general public on the same terms and conditions that are consistent with the lender's customary business practice; Loans subsidized by a federal, state, or municipal government that are made available under a program of general application to the public; Certain employee-relocation loans; Certain loans from a foreign person, unless the interest income would be effectively connected with the conduct of a U. Help filing 1040x S. Help filing 1040x trade or business and would not be exempt from U. Help filing 1040x S. Help filing 1040x tax under an income tax treaty; Gift loans to a charitable organization, contributions to which are deductible, if the total outstanding amount of loans between the organization and lender is $250,000 or less at all times during the tax year; and Other loans on which the interest arrangement can be shown to have no significant effect on the federal tax liability of the lender or the borrower. Help filing 1040x For a loan described in (6) above, all the facts and circumstances are used to determine if the interest arrangement has a significant effect on the federal tax liability of the lender or borrower. Help filing 1040x Some factors to be considered are: Whether items of income and deduction generated by the loan offset each other; The amount of these items; The cost to you of complying with the below-market loan rules, if they were to apply; and Any reasons other than taxes for structuring the transaction as a below-market loan. Help filing 1040x If you structure a transaction to meet this exception and one of the principal purposes of that structure is the avoidance of federal tax, the loan will be considered a tax-avoidance loan, and this exception will not apply. Help filing 1040x Limit on forgone interest for gift loans of $100,000 or less. Help filing 1040x   For gift loans between individuals, if the outstanding loans between the lender and borrower total $100,000 or less, the forgone interest to be included in income by the lender and deducted by the borrower is limited to the amount of the borrower's net investment income for the year. Help filing 1040x If the borrower's net investment income is $1,000 or less, it is treated as zero. Help filing 1040x This limit does not apply to a loan if the avoidance of federal tax is one of the main purposes of the interest arrangement. Help filing 1040x Effective dates. Help filing 1040x    These rules apply to term loans made after June 6, 1984, and to demand loans outstanding after that date. Help filing 1040x U. Help filing 1040x S. Help filing 1040x Savings Bonds This section provides tax information on U. Help filing 1040x S. Help filing 1040x savings bonds. Help filing 1040x It explains how to report the interest income on these bonds and how to treat transfers of these bonds. Help filing 1040x U. Help filing 1040x S. Help filing 1040x savings bonds currently offered to individuals include Series EE bonds and Series I bonds. Help filing 1040x For other information on U. Help filing 1040x S. Help filing 1040x savings bonds, write to:  For Series HH/H: Bureau of the Fiscal Service Division of Customer Assistance P. Help filing 1040x O. Help filing 1040x Box 2186 Parkersburg, WV 26106-2186  For Series EE and I paper savings bonds: Bureau of the Fiscal Service Division of Customer Assistance P. Help filing 1040x O. Help filing 1040x Box 7012 Parkersburg, WV 26106-7012  For Series EE and I electronic bonds: Bureau of the Fiscal Service  Division of Customer Assistance P. Help filing 1040x O. Help filing 1040x Box 7015 Parkersburg, WV 26106-7015 Or, on the Internet, visit: www. Help filing 1040x treasurydirect. Help filing 1040x gov/indiv/indiv. Help filing 1040x htm. Help filing 1040x Accrual method taxpayers. Help filing 1040x   If you use an accrual method of accounting, you must report interest on U. Help filing 1040x S. Help filing 1040x savings bonds each year as it accrues. Help filing 1040x You cannot postpone reporting interest until you receive it or until the bonds mature. Help filing 1040x Cash method taxpayers. Help filing 1040x   If you use the cash method of accounting, as most individual taxpayers do, you generally report the interest on U. Help filing 1040x S. Help filing 1040x savings bonds when you receive it. Help filing 1040x But see Reporting options for cash method taxpayers , later. Help filing 1040x Series HH bonds. Help filing 1040x   These bonds were issued at face value. Help filing 1040x Interest is paid twice a year by direct deposit to your bank account. Help filing 1040x If you are a cash method taxpayer, you must report interest on these bonds as income in the year you receive it. Help filing 1040x   Series HH bonds were first offered in 1980 and last offered in August 2004. Help filing 1040x Before 1980, series H bonds were issued. Help filing 1040x Series H bonds are treated the same as series HH bonds. Help filing 1040x If you are a cash method taxpayer, you must report the interest when you receive it. Help filing 1040x   Series H bonds have a maturity period of 30 years. Help filing 1040x Series HH bonds mature in 20 years. Help filing 1040x The last series H bonds matured in 2009. Help filing 1040x The last series HH bonds will mature in 2024. Help filing 1040x Series EE and series I bonds. Help filing 1040x   Interest on these bonds is payable when you redeem the bonds. Help filing 1040x The difference between the purchase price and the redemption value is taxable interest. Help filing 1040x Series EE bonds. Help filing 1040x   Series EE bonds were first offered in January 1980 and have a maturity period of 30 years. Help filing 1040x Before July 1980, series E bonds were issued. Help filing 1040x The original 10-year maturity period of series E bonds has been extended to 40 years for bonds issued before December 1965 and 30 years for bonds issued after November 1965. Help filing 1040x Paper series EE and series E bonds are issued at a discount. Help filing 1040x The face value is payable to you at maturity. Help filing 1040x Electronic series EE bonds are issued at their face value. Help filing 1040x The face value plus accrued interest is payable to you at maturity. Help filing 1040x As of January 1, 2012, paper savings bonds were no longer sold at financial institutions. Help filing 1040x    Owners of paper series EE bonds can convert them to electronic bonds. Help filing 1040x These converted bonds do not retain the denomination listed on the paper certificate but are posted at their purchase price (with accrued interest). Help filing 1040x Series I bonds. Help filing 1040x   Series I bonds were first offered in 1998. Help filing 1040x These are inflation-indexed bonds issued at their face amount with a maturity period of 30 years. Help filing 1040x The face value plus all accrued interest is payable to you at maturity. Help filing 1040x Reporting options for cash method taxpayers. Help filing 1040x   If you use the cash method of reporting income, you can report the interest on series EE, series E, and series I bonds in either of the following ways. Help filing 1040x Method 1. Help filing 1040x Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year in which they mature. Help filing 1040x (However, see Savings bonds traded , later. Help filing 1040x )  Note. Help filing 1040x Series EE bonds issued in 1983 matured in 2013. Help filing 1040x If you have used method 1, you generally must report the interest on these bonds on your 2013 return. Help filing 1040x The last series E bonds were issued in 1980 and matured in 2010. Help filing 1040x If you used method 1, you generally should have reported the interest on these bonds on your 2010 return. Help filing 1040x Method 2. Help filing 1040x Choose to report the increase in redemption value as interest each year. Help filing 1040x  You must use the same method for all series EE, series E, and series I bonds you own. Help filing 1040x If you do not choose method 2 by reporting the increase in redemption value as interest each year, you must use method 1. Help filing 1040x If you plan to cash your bonds in the same year you will pay for higher educational expenses, you may want to use method 1 because you may be able to exclude the interest from your income. Help filing 1040x To learn how, see Education Savings Bond Program, later. Help filing 1040x Change from method 1. Help filing 1040x   If you want to change your method of reporting the interest from method 1 to method 2, you can do so without permission from the IRS. Help filing 1040x In the year of change, you must report all interest accrued to date and not previously reported for all your bonds. Help filing 1040x   Once you choose to report the interest each year, you must continue to do so for all series EE, series E, and series I bonds you own and for any you get later, unless you request permission to change, as explained next. Help filing 1040x Change from method 2. Help filing 1040x   To change from method 2 to method 1, you must request permission from the IRS. Help filing 1040x Permission for the change is automatically granted if you send the IRS a statement that meets all the following requirements. Help filing 1040x You have typed or printed the following number at the top: “131. Help filing 1040x ” It includes your name and social security number under “131. Help filing 1040x ” It includes the year of change (both the beginning and ending dates). Help filing 1040x It identifies the savings bonds for which you are requesting this change. Help filing 1040x It includes your agreement to: Report all interest on any bonds acquired during or after the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest; and Report all interest on the bonds acquired before the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, with the exception of the interest reported in prior tax years. Help filing 1040x   You must attach this statement to your tax return for the year of change, which you must file by the due date (including extensions). Help filing 1040x   You can have an automatic extension of 6 months from the due date of your return for the year of change (excluding extensions) to file the statement with an amended return. Help filing 1040x On the statement, type or print “Filed pursuant to section 301. Help filing 1040x 9100-2. Help filing 1040x ” To get this extension, you must have filed your original return for the year of the change by the due date (including extensions). Help filing 1040x    By the date you file the original statement with your return, you must also send a signed copy to the address below. Help filing 1040x    Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) P. Help filing 1040x O. Help filing 1040x Box 7604 Benjamin Franklin Station Washington, DC 20044   If you use a private delivery service, send the signed copy to the address below. Help filing 1040x Internal Revenue Service Attention: CC:IT&A  (Automatic Rulings Branch) Room 5336 1111 Constitution Avenue, NW Washington, DC 20224    Instead of filing this statement, you can request permission to change from method 2 to method 1 by filing Form 3115. Help filing 1040x In that case, follow the form instructions for an automatic change. Help filing 1040x No user fee is required. Help filing 1040x Co-owners. Help filing 1040x   If a U. Help filing 1040x S. Help filing 1040x savings bond is issued in the names of co-owners, such as you and your child or you and your spouse, interest on the bond is generally taxable to the co-owner who bought the bond. Help filing 1040x One co-owner's funds used. Help filing 1040x   If you used your funds to buy the bond, you must pay the tax on the interest. Help filing 1040x This is true even if you let the other co-owner redeem the bond and keep all the proceeds. Help filing 1040x Under these circumstances, the co-owner who redeemed the bond will receive a Form 1099-INT at the time of redemption and must provide you with another Form 1099-INT showing the amount of interest from the bond taxable to you. Help filing 1040x The co-owner who redeemed the bond is a “nominee. Help filing 1040x ” See Nominee distributions under How To Report Interest Income, later, for more information about how a person who is a nominee reports interest income belonging to another person. Help filing 1040x Both co-owners' funds used. Help filing 1040x   If you and the other co-owner each contribute part of the bond's purchase price, the interest is generally taxable to each of you, in proportion to the amount each of you paid. Help filing 1040x Community property. Help filing 1040x   If you and your spouse live in a community property state and hold bonds as community property, one-half of the interest is considered received by each of you. Help filing 1040x If you file separate returns, each of you generally must report one-half of the bond interest. Help filing 1040x For more information about community property, see Publication 555. Help filing 1040x Table 1-2. Help filing 1040x   These rules are also shown in Table 1-2. Help filing 1040x Child as only owner. Help filing 1040x   Interest on U. Help filing 1040x S. Help filing 1040x savings bonds bought for and registered only in the name of your child is income to your child, even if you paid for the bonds and are named as beneficiary. Help filing 1040x If the bonds are series EE, series E, or series I bonds, the interest on the bonds is income to your child in the earlier of the year the bonds are cashed or disposed of or the year the bonds mature, unless your child chooses to report the interest income each year. Help filing 1040x Choice to report interest each year. Help filing 1040x   The choice to report the accrued interest each year can be made either by your child or by you for your child. Help filing 1040x This choice is made by filing an income tax return that shows all the interest earned to date, and by stating on the return that your child chooses to report the interest each year. Help filing 1040x Either you or your child should keep a copy of this return. Help filing 1040x   Unless your child is otherwise required to file a tax return for any year after making this choice, your child does not have to file a return only to report the annual accrual of U. Help filing 1040x S. Help filing 1040x savings bond interest under this choice. Help filing 1040x However, see Tax on unearned income of certain children , earlier, under General Information. Help filing 1040x Neither you nor your child can change the way you report the interest unless you request permission from the IRS, as discussed earlier under Change from method 2 . Help filing 1040x Ownership transferred. Help filing 1040x   If you bought series E, series EE, or series I bonds entirely with your own funds and had them reissued in your co-owner's name or beneficiary's name alone, you must include in your gross income for the year of reissue all interest that you earned on these bonds and have not previously reported. Help filing 1040x But, if the bonds were reissued in your name alone, you do not have to report the interest accrued at that time. Help filing 1040x   This same rule applies when bonds (other than bonds held as community property) are transferred between spouses or incident to divorce. Help filing 1040x Example. Help filing 1040x You bought series EE bonds entirely with your own funds. Help filing 1040x You did not choose to report the accrued interest each year. Help filing 1040x Later, you transfer the bonds to your former spouse under a divorce agreement. Help filing 1040x You must include the deferred accrued interest, from the date of the original issue of the bonds to the date of transfer, in your income in the year of transfer. Help filing 1040x Your former spouse includes in income the interest on the bonds from the date of transfer to the date of redemption. Help filing 1040x Table 1-2. Help filing 1040x Who Pays the Tax on U. Help filing 1040x S. Help filing 1040x Savings Bond Interest IF . Help filing 1040x . Help filing 1040x . Help filing 1040x THEN the interest must be reported by . Help filing 1040x . Help filing 1040x . Help filing 1040x you buy a bond in your name and the name of another person as co-owners, using only your own funds you. Help filing 1040x you buy a bond in the name of another person, who is the sole owner of the bond the person for whom you bought the bond. Help filing 1040x you and another person buy a bond as co-owners, each contributing part of the purchase price both you and the other co-owner, in proportion to the amount each paid for the bond. Help filing 1040x you and your spouse, who live in a community property state, buy a bond that is community property you and your spouse. Help filing 1040x If you file separate returns, both you and your spouse generally report one-half of the interest. Help filing 1040x Purchased jointly. Help filing 1040x   If you and a co-owner each contributed funds to buy series E, series EE, or series I bonds jointly and later have the bonds reissued in the co-owner's name alone, you must include in your gross income for the year of reissue your share of all the interest earned on the bonds that you have not previously reported. Help filing 1040x The former co-owner does not have to include in gross income at the time of reissue his or her share of the interest earned that was not reported before the transfer. Help filing 1040x This interest, however, as well as all interest earned after the reissue, is income to the former co-owner. Help filing 1040x   This income-reporting rule also applies when the bonds are reissued in the name of your former co-owner and a new co-owner. Help filing 1040x But the new co-owner will report only his or her share of the interest earned after the transfer. Help filing 1040x   If bonds that you and a co-owner bought jointly are reissued to each of you separately in the same proportion as your contribution to the purchase price, neither you nor your co-owner has to report at that time the interest earned before the bonds were reissued. Help filing 1040x Example 1. Help filing 1040x You and your spouse each spent an equal amount to buy a $1,000 series EE savings bond. Help filing 1040x The bond was issued to you and your spouse as co-owners. Help filing 1040x You both postpone reporting interest on the bond. Help filing 1040x You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Help filing 1040x At that time neither you nor your spouse has to report the interest earned to the date of reissue. Help filing 1040x Example 2. Help filing 1040x You bought a $1,000 series EE savings bond entirely with your own funds. Help filing 1040x The bond was issued to you and your spouse as co-owners. Help filing 1040x You both postponed reporting interest on the bond. Help filing 1040x You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Help filing 1040x You must report half the interest earned to the date of reissue. Help filing 1040x Transfer to a trust. Help filing 1040x   If you own series E, series EE, or series I bonds and transfer them to a trust, giving up all rights of ownership, you must include in your income for that year the interest earned to the date of transfer if you have not already reported it. Help filing 1040x However, if you are considered the owner of the trust and if the increase in value both before and after the transfer continues to be taxable to you, you can continue to defer reporting the interest earned each year. Help filing 1040x You must include the total interest in your income in the year you cash or dispose of the bonds or the year the bonds finally mature, whichever is earlier. Help filing 1040x   The same rules apply to previously unreported interest on series EE or series E bonds if the transfer to a trust consisted of series HH or series H bonds you acquired in a trade for the series EE or series E bonds. Help filing 1040x See Savings bonds traded , later. Help filing 1040x Decedents. Help filing 1040x   The manner of reporting interest income on series E, series EE, or series I bonds, after the death of the owner (decedent), depends on the accounting and income-reporting methods previously used by the decedent. Help filing 1040x Decedent who reported interest each year. Help filing 1040x   If the bonds transferred because of death were owned by a person who used an accrual method, or who used the cash method and had chosen to report the interest each year, the interest earned in the year of death up to the date of death must be reported on that person's final return. Help filing 1040x The person who acquires the bonds includes in income only interest earned after the date of death. Help filing 1040x Decedent who postponed reporting interest. Help filing 1040x   If the transferred bonds were owned by a decedent who had used the cash method and had not chosen to report the interest each year, and who had bought the bonds entirely with his or her own funds, all interest earned before death must be reported in one of the following ways. Help filing 1040x The surviving spouse or personal representative (executor, administrator, etc. Help filing 1040x ) who files the final income tax return of the decedent can choose to include on that return all interest earned on the bonds before the decedent's death. Help filing 1040x The person who acquires the bonds then includes in income only interest earned after the date of death. Help filing 1040x If the choice in (1) is not made, the interest earned up to the date of death is income in respect of the decedent and should not be included in the decedent's final return. Help filing 1040x All interest earned both before and after the decedent's death (except any part reported by the estate on its income tax return) is income to the person who acquires the bonds. Help filing 1040x If that person uses the cash method and does not choose to report the interest each year, he or she can postpone reporting it until the year the bonds are cashed or disposed of or the year they mature, whichever is earlier. Help filing 1040x In the year that person reports the interest, he or she can claim a deduction for any federal estate tax paid on the part of the interest included in the decedent's estate. Help filing 1040x For more information on income in respect of a decedent, see Publication 559, Survivors, Executors, and Administrators. Help filing 1040x Example 1. Help filing 1040x Your uncle, a cash method taxpayer, died and left you a $1,000 series EE bond. Help filing 1040x He had bought the bond for $500 and had not chosen to report the interest each year. Help filing 1040x At the date of death, interest of $200 had accrued on the bond, and its value of $700 was included in your uncle's estate. Help filing 1040x Your uncle's executor chose not to include the $200 accrued interest in your uncle's final income tax return. Help filing 1040x The $200 is income in respect of the decedent. Help filing 1040x You are a cash method taxpayer and do not choose to report the interest each year as it is earned. Help filing 1040x If you cash the bond when it reaches maturity value of $1,000, you report $500 interest income—the difference between maturity value of $1,000 and the original cost of $500. Help filing 1040x For that year, you can deduct (as a miscellaneous itemized deduction not subject to the 2%-of-adjusted-gross-income limit) any federal estate tax paid because the $200 interest was included in your uncle's estate. Help filing 1040x Example 2. Help filing 1040x If, in Example 1 , the executor had chosen to include the $200 accrued interest in your uncle's final return, you would report only $300 as interest when you cashed the bond at maturity. Help filing 1040x $300 is the interest earned after your uncle's death. Help filing 1040x Example 3. Help filing 1040x If, in Example 1 , you make or have made the choice to report the increase in redemption value as interest each year, you include in gross income for the year you acquire the bond all of the unreported increase in value of all series E, series EE, and series I bonds you hold, including the $200 on the bond you inherited from your uncle. Help filing 1040x Example 4. Help filing 1040x When your aunt died, she owned series HH bonds that she had acquired in a trade for series EE bonds. Help filing 1040x You were the beneficiary of these bonds. Help filing 1040x Your aunt used the cash method and did not choose to report the interest on the series EE bonds each year as it accrued. Help filing 1040x Your aunt's executor chose not to include any interest earned before your aunt's death on her final return. Help filing 1040x The income in respect of the decedent is the sum of the unreported interest on the series EE bonds and the interest, if any, payable on the series HH bonds but not received as of the date of your aunt's death. Help filing 1040x You must report any interest received during the year as income on your return. Help filing 1040x The part of the interest payable but not received before your aunt's death is income in respect of the decedent and may qualify for the estate tax deduction. Help filing 1040x For information on when to report the interest on the series EE bonds traded, see Savings bonds traded , later. Help filing 1040x Savings bonds distributed from a retirement or profit-sharing plan. Help filing 1040x   If you acquire a U. Help filing 1040x S. Help filing 1040x savings bond in a taxable distribution from a retirement or profit-sharing plan, your income for the year of distribution includes the bond's redemption value (its cost plus the interest accrued before the distribution). Help filing 1040x When you redeem the bond (whether in the year of distribution or later), your interest income includes only the interest accrued after the bond was distributed. Help filing 1040x To figure the interest reported as a taxable distribution and your interest income when you redeem the bond, see Worksheet for savings bonds distributed from a retirement or profit-sharing plan under How To Report Interest Income, later. Help filing 1040x Savings bonds traded. Help filing 1040x   If you postponed reporting the interest on your series EE or series E bonds, you did not recognize taxable income when you traded the bonds for series HH or series H bonds, unless you received cash in the trade. Help filing 1040x (You cannot trade series I bonds for series HH bonds. Help filing 1040x After August 31, 2004, you cannot trade any other series of bonds for series HH bonds. Help filing 1040x ) Any cash you received is income up to the amount of the interest earned on the bonds traded. Help filing 1040x When your series HH or series H bonds mature, or if you dispose of them before maturity, you report as interest the difference between their redemption value and your cost. Help filing 1040x Your cost is the sum of the amount you paid for the traded series EE or series E bonds plus any amount you had to pay at the time of the trade. Help filing 1040x Example. Help filing 1040x You traded series EE bonds (on which you postponed reporting the interest) for $2,500 in series HH bonds and $223 in cash. Help filing 1040x You reported the $223 as taxable income on your tax return. Help filing 1040x At the time of the trade, the series EE bonds had accrued interest of $523 and a redemption value of $2,723. Help filing 1040x You hold the series HH bonds until maturity, when you receive $2,500. Help filing 1040x You must report $300 as interest income in the year of maturity. Help filing 1040x This is the difference between their redemption value, $2,500, and your cost, $2,200 (the amount you paid for the series EE bonds). Help filing 1040x (It is also the difference between the accrued interest of $523 on the series EE bonds and the $223 cash received on the trade. Help filing 1040x ) Choice to report interest in year of trade. Help filing 1040x   You could have chosen to treat all of the previously unreported accrued interest on series EE or series E bonds traded for series HH bonds as income in the year of the trade. Help filing 1040x If you made this choice, it is treated as a change from method 1. Help filing 1040x See Change from method 1 under Series EE and series I bonds, earlier. Help filing 1040x Form 1099-INT for U. Help filing 1040x S. Help filing 1040x savings bond interest. Help filing 1040x   When you cash a bond, the bank or other payer that redeems it must give you a Form 1099-INT if the interest part of the payment you receive is $10 or more. Help filing 1040x Box 3 of your Form 1099-INT should show the interest as the difference between the amount you received and the amount paid for the bond. Help filing 1040x However, your Form 1099-INT may show more interest than you have to include on your income tax return. Help filing 1040x For example, this may happen if any of the following are true. Help filing 1040x You chose to report the increase in the redemption value of the bond each year. Help filing 1040x The interest shown on your Form 1099-INT will not be reduced by amounts previously included in income. Help filing 1040x You received the bond from a decedent. Help filing 1040x The interest shown on your Form 1099-INT will not be reduced by any interest reported by the decedent before death, or on the decedent's final return, or by the estate on the estate's income tax return. Help filing 1040x Ownership of the bond was transferred. Help filing 1040x The interest shown on your Form 1099-INT will not be reduced by interest that accrued before the transfer. Help filing 1040x You were named as a co-owner, and the other co-owner contributed funds to buy the bond. Help filing 1040x The interest shown on your Form 1099-INT will not be reduced by the amount you received as nominee for the other co-owner. Help filing 1040x (See Co-owners , earlier in this section, for more information about the reporting requirements. Help filing 1040x ) You received the bond in a taxable distribution from a retirement or profit-sharing plan. Help filing 1040x The interest shown on your Form 1099-INT will not be reduced by the interest portion of the amount taxable as a distribution from the plan and not taxable as interest. Help filing 1040x (This amount is generally shown on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Help filing 1040x , for the year of distribution. Help filing 1040x )   For more information on including the correct amount of interest on your return, see U. Help filing 1040x S. Help filing 1040x savings bond interest previously reported or Nominee distributions under How To Report Interest Income, later. Help filing 1040x    Interest on U. Help filing 1040x S. Help filing 1040x savings bonds is exempt from state and local taxes. Help filing 1040x The Form 1099-INT you receive will indicate the amount that is for U. Help filing 1040x S. Help filing 1040x savings bonds interest in box 3. Help filing 1040x Do not include this income on your state or local income tax return. Help filing 1040x Education Savings Bond Program You may be able to exclude from income all or part of the interest you receive on the redemption of qualified U. Help filing 1040x S. Help filing 1040x savings bonds during the year if you pay qualified higher educational expenses during the same year. Help filing 1040x This exclusion is known as the Education Savings Bond Program. Help filing 1040x You do not qualify for this exclusion if your filing status is married filing separately. Help filing 1040x Form 8815. Help filing 1040x   Use Form 8815 to figure your exclusion. Help filing 1040x Attach the form to your Form 1040 or Form 1040A. Help filing 1040x Qualified U. Help filing 1040x S. Help filing 1040x savings bonds. Help filing 1040x   A qualified U. Help filing 1040x S. Help filing 1040x savings bond is a series EE bond issued after 1989 or a series I bond. Help filing 1040x The bond must be issued either in your name (sole owner) or in your and your spouse's names (co-owners). Help filing 1040x You must be at least 24 years old before the bond's issue date. Help filing 1040x For example, a bond bought by a parent and issued in the name of his or her child under age 24 does not qualify for the exclusion by the parent or child. Help filing 1040x    The issue date of a bond may be earlier than the date the bond is purchased because the issue date assigned to a bond is the first day of the month in which it is purchased. Help filing 1040x Beneficiary. Help filing 1040x   You can designate any individual (including a child) as a beneficiary of the bond. Help filing 1040x Verification by IRS. Help filing 1040x   If you claim the exclusion, the IRS will check it by using bond redemption information from the Department of Treasury. Help filing 1040x Qualified expenses. Help filing 1040x   Qualified higher educational expenses are tuition and fees required for you, your spouse, or your dependent (for whom you claim an exemption) to attend an eligible educational institution. Help filing 1040x   Qualified expenses include any contribution you make to a qualified tuition program or to a Coverdell education savings account. Help filing 1040x For information about these programs, see Publication 970, Tax Benefits for Education. Help filing 1040x   Qualified expenses do not include expenses for room and board or for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. Help filing 1040x Eligible educational institutions. Help filing 1040x   These institutions include most public, private, and nonprofit universities, colleges, and vocational schools that are accredited and eligible to participate in student aid programs run by the Department of Education. Help filing 1040x Reduction for certain benefits. Help filing 1040x   You must reduce your qualified higher educational expenses by all of the following tax-free benefits. Help filing 1040x Tax-free part of scholarships and fellowships. Help filing 1040x Expenses used to figure the tax-free portion of distributions from a Coverdell ESA. Help filing 1040x Expenses used to figure the tax-free portion of distributions from a qualified tuition program. Help filing 1040x Any tax-free payments (other than gifts or inheritances) received as educational assistance, such as: Veterans' educational assistance benefits, Qualified tuition reductions, or Employer-provided educational assistance. Help filing 1040x Any expense used in figuring the American Opportunity and lifetime learning credits. Help filing 1040x For information about these benefits, see Publication 970. Help filing 1040x Amount excludable. Help filing 1040x   If the total proceeds (interest and principal) from the qualified U. Help filing 1040x S. Help filing 1040x savings bonds you redeem during the year are not more than your adjusted qualified higher educational expenses for the year, you may be able to exclude all of the interest. Help filing 1040x If the proceeds are more than the expenses, you may be able to exclude only part of the interest. Help filing 1040x   To determine the excludable amount, multiply the interest part of the proceeds by a fraction. Help filing 1040x The numer