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

TurboTax Federal Free Edition - File Taxes Online

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

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


© 2012 - 2018 All rights reserved.

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

Irs 1040 X

Free Turbo Tax 2008Www Irs Gov FreefileStudent Tax Return 2011Download Ez FormFederal Income Tax Forms1040 Ez Tax FormHow Can I Amend My 2011 Tax ReturnIrs Gov OrgFiling Past Taxes1040ez Fillable FormIrs Income Tax Forms 20102011 Tax ReturnsAmending A Tax Return 2012Turbotax Military DiscountMilitary Taxes By StateFree Online Tax PreparationH 7 R Block Free FileCan You File A 1040x OnlineIrs GoveState Income Tax EfileEz1040 FormState Tax Return OnlineHow To Amend A Tax ReturnAmended Tax Form 2012File 1040 Ez OnlineFiling A 1040xHow To File A 2011 Tax ReturnFile For Extension 2011 Taxes FreeFiling 2012 Tax Return LateTax Cut Hr BlockFree Efile Of State TaxesFree Turbo Tax 2013 DownloadComplete 2005 Taxes OnlineH & R Block MilitaryWho Can File 1040ezDidnt File 2012 Taxes1040 Ez 2011Tax Form 1040x Amended Return1040 Ez FormAmending Tax Return Online

Irs 1040 X

Irs 1040 x 4. Irs 1040 x   Foreign Earned Income and Housing: Exclusion – Deduction Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Who Qualifies for the Exclusions and the Deduction? RequirementsTax Home in Foreign Country Bona Fide Residence Test Physical Presence Test Waiver of Time Requirements U. Irs 1040 x S. Irs 1040 x Travel Restrictions Foreign Earned Income Foreign Earned Income ExclusionLimit on Excludable Amount Choosing the Exclusion Foreign Housing Exclusion and DeductionHousing Amount Foreign Housing Exclusion Foreign Housing Deduction Married Couples Form 2555 and Form 2555-EZForm 2555-EZ Form 2555 Topics - This chapter discusses: Who qualifies for the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, The requirements that must be met to claim either exclusion or the deduction, How to figure the foreign earned income exclusion, and How to figure the foreign housing exclusion and the foreign housing deduction. Irs 1040 x Useful Items - You may want to see: Publication 519 U. Irs 1040 x S. Irs 1040 x Tax Guide for Aliens 570 Tax Guide for Individuals With Income from U. Irs 1040 x S. Irs 1040 x Possessions 596 Earned Income Credit (EIC) Form (and Instructions) 1040X Amended U. Irs 1040 x S. Irs 1040 x Individual Income Tax Return 2555 Foreign Earned Income 2555-EZ Foreign Earned Income Exclusion See chapter 7 for information about getting these publications and forms. Irs 1040 x Who Qualifies for the Exclusions and the Deduction? If you meet certain requirements, you may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction. Irs 1040 x If you are a U. Irs 1040 x S. Irs 1040 x citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. Irs 1040 x However, you may qualify to exclude from income up to $97,600 of your foreign earnings. Irs 1040 x In addition, you can exclude or deduct certain foreign housing amounts. Irs 1040 x See Foreign Earned Income Exclusion and Foreign Housing Exclusion and Deduction, later. Irs 1040 x You also may be entitled to exclude from income the value of meals and lodging provided to you by your employer. Irs 1040 x See Exclusion of Meals and Lodging, later. Irs 1040 x Requirements To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must meet all three of the following requirements. Irs 1040 x Your tax home must be in a foreign country. Irs 1040 x You must have foreign earned income. Irs 1040 x You must be one of the following. Irs 1040 x A U. Irs 1040 x S. Irs 1040 x citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Irs 1040 x A U. Irs 1040 x S. Irs 1040 x resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Irs 1040 x A U. Irs 1040 x S. Irs 1040 x citizen or a U. Irs 1040 x S. Irs 1040 x resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months. Irs 1040 x See Publication 519 to find out if you are a U. Irs 1040 x S. Irs 1040 x resident alien for tax purposes and whether you keep that alien status when you temporarily work abroad. Irs 1040 x If you are a nonresident alien married to a U. Irs 1040 x S. Irs 1040 x citizen or resident alien, and both you and your spouse choose to treat you as a resident alien, you are a resident alien for tax purposes. Irs 1040 x For information on making the choice, see the discussion in chapter 1 under Nonresident Alien Spouse Treated as a Resident . Irs 1040 x Waiver of minimum time requirements. Irs 1040 x   The minimum time requirements for bona fide residence and physical presence can be waived if you must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. Irs 1040 x This is fully explained under Waiver of Time Requirements , later. Irs 1040 x   See Figure 4-A and information in this chapter to determine if you are eligible to claim either exclusion or the deduction. Irs 1040 x Tax Home in Foreign Country To qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, your tax home must be in a foreign country throughout your period of bona fide residence or physical presence abroad. Irs 1040 x Bona fide residence and physical presence are explained later. Irs 1040 x Tax Home Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Irs 1040 x Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Irs 1040 x Having a “tax home” in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes. Irs 1040 x If you do not have a regular or main place of business because of the nature of your work, your tax home may be the place where you regularly live. Irs 1040 x If you have neither a regular or main place of business nor a place where you regularly live, you are considered an itinerant and your tax home is wherever you work. Irs 1040 x You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States. Irs 1040 x However, your abode is not necessarily in the United States while you are temporarily in the United States. Irs 1040 x Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United States, whether or not your spouse or dependents use the dwelling. Irs 1040 x “Abode” has been variously defined as one's home, habitation, residence, domicile, or place of dwelling. Irs 1040 x It does not mean your principal place of business. Irs 1040 x “Abode” has a domestic rather than a vocational meaning and does not mean the same as “tax home. Irs 1040 x ” The location of your abode often will depend on where you maintain your economic, family, and personal ties. Irs 1040 x Example 1. Irs 1040 x You are employed on an offshore oil rig in the territorial waters of a foreign country and work a 28-day on/28-day off schedule. Irs 1040 x You return to your family residence in the United States during your off periods. Irs 1040 x You are considered to have an abode in the United States and do not satisfy the tax home test in the foreign country. Irs 1040 x You cannot claim either of the exclusions or the housing deduction. Irs 1040 x Example 2. Irs 1040 x For several years, you were a marketing executive with a producer of machine tools in Toledo, Ohio. Irs 1040 x In November of last year, your employer transferred you to London, England, for a minimum of 18 months to set up a sales operation for Europe. Irs 1040 x Before you left, you distributed business cards showing your business and home addresses in London. Irs 1040 x You kept ownership of your home in Toledo but rented it to another family. Irs 1040 x You placed your car in storage. Irs 1040 x In November of last year, you moved your spouse, children, furniture, and family pets to a home your employer rented for you in London. Irs 1040 x Shortly after moving, you leased a car and you and your spouse got British driving licenses. Irs 1040 x Your entire family got library cards for the local public library. Irs 1040 x You and your spouse opened bank accounts with a London bank and secured consumer credit. Irs 1040 x You joined a local business league and both you and your spouse became active in the neighborhood civic association and worked with a local charity. Irs 1040 x Your abode is in London for the time you live there. Irs 1040 x You satisfy the tax home test in the foreign country. Irs 1040 x Please click here for the text description of the image. Irs 1040 x Figure 4–A Can I Claim the Exclusion or Deduction? Temporary or Indefinite Assignment The location of your tax home often depends on whether your assignment is temporary or indefinite. Irs 1040 x If you are temporarily absent from your tax home in the United States on business, you may be able to deduct your away-from-home expenses (for travel, meals, and lodging), but you would not qualify for the foreign earned income exclusion. Irs 1040 x If your new work assignment is for an indefinite period, your new place of employment becomes your tax home and you would not be able to deduct any of the related expenses that you have in the general area of this new work assignment. Irs 1040 x If your new tax home is in a foreign country and you meet the other requirements, your earnings may qualify for the foreign earned income exclusion. Irs 1040 x If you expect your employment away from home in a single location to last, and it does last, for 1 year or less, it is temporary unless facts and circumstances indicate otherwise. Irs 1040 x If you expect it to last for more than 1 year, it is indefinite. Irs 1040 x If you expect it to last for 1 year or less, but at some later date you expect it to last longer than 1 year, it is temporary (in the absence of facts and circumstances indicating otherwise) until your expectation changes. Irs 1040 x Once your expectation changes, it is indefinite. Irs 1040 x Foreign Country To meet the bona fide residence test or the physical presence test, you must live in or be present in a foreign country. Irs 1040 x A foreign country includes any territory under the sovereignty of a government other than that of the United States. Irs 1040 x The term “foreign country” includes the country's airspace and territorial waters, but not international waters and the airspace above them. Irs 1040 x It also includes the seabed and subsoil of those submarine areas adjacent to the country's territorial waters over which it has exclusive rights under international law to explore and exploit the natural resources. Irs 1040 x The term “foreign country” does not include Antarctica or U. Irs 1040 x S. Irs 1040 x possessions such as Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, the U. Irs 1040 x S. Irs 1040 x Virgin Islands, and Johnston Island. Irs 1040 x For purposes of the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, the terms “foreign,” “abroad,” and “overseas” refer to areas outside the United States and those areas listed or described in the previous sentence. Irs 1040 x American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands Residence or presence in a U. Irs 1040 x S. Irs 1040 x possession does not qualify you for the foreign earned income exclusion. Irs 1040 x You may, however, qualify for an exclusion of your possession income on your U. Irs 1040 x S. Irs 1040 x return. Irs 1040 x American Samoa. Irs 1040 x   There is a possession exclusion available to individuals who are bona fide residents of American Samoa for the entire tax year. Irs 1040 x Gross income from sources within American Samoa may be eligible for this exclusion. Irs 1040 x Income that is effectively connected with the conduct of a trade or business within American Samoa also may be eligible for this exclusion. Irs 1040 x Use Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa, to figure the exclusion. Irs 1040 x Guam and the Commonwealth of the Northern Mariana Islands. Irs 1040 x   An exclusion will be available to residents of Guam and the Commonwealth of the Northern Mariana Islands if, and when, new implementation agreements take effect between the United States and those possessions. Irs 1040 x   For more information, see Publication 570. Irs 1040 x Puerto Rico and U. Irs 1040 x S. Irs 1040 x Virgin Islands Residents of Puerto Rico and the U. Irs 1040 x S. Irs 1040 x Virgin Islands cannot claim the foreign earned income exclusion or the foreign housing exclusion. Irs 1040 x Puerto Rico. Irs 1040 x   Generally, if you are a U. Irs 1040 x S. Irs 1040 x citizen who is a bona fide resident of Puerto Rico for the entire tax year, you are not subject to U. Irs 1040 x S. Irs 1040 x tax on income from Puerto Rican sources. Irs 1040 x This does not include amounts paid for services performed as an employee of the United States. Irs 1040 x However, you are subject to U. Irs 1040 x S. Irs 1040 x tax on your income from sources outside Puerto Rico. Irs 1040 x In figuring your U. Irs 1040 x S. Irs 1040 x tax, you cannot deduct expenses allocable to income not subject to tax. Irs 1040 x Bona Fide Residence Test You meet the bona fide residence test if you are a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Irs 1040 x You can use the bona fide residence test to qualify for the exclusions and the deduction only if you are either: A U. Irs 1040 x S. Irs 1040 x citizen, or A U. Irs 1040 x S. Irs 1040 x resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect. Irs 1040 x You do not automatically acquire bona fide resident status merely by living in a foreign country or countries for 1 year. Irs 1040 x If you go to a foreign country to work on a particular job for a specified period of time, you ordinarily will not be regarded as a bona fide resident of that country even though you work there for 1 tax year or longer. Irs 1040 x The length of your stay and the nature of your job are only two of the factors to be considered in determining whether you meet the bona fide residence test. Irs 1040 x Bona fide residence. Irs 1040 x   To meet the bona fide residence test, you must have established a bona fide residence in a foreign country. Irs 1040 x   Your bona fide residence is not necessarily the same as your domicile. Irs 1040 x Your domicile is your permanent home, the place to which you always return or intend to return. Irs 1040 x Example. Irs 1040 x You could have your domicile in Cleveland, Ohio, and a bona fide residence in Edinburgh, Scotland, if you intend to return eventually to Cleveland. Irs 1040 x The fact that you go to Scotland does not automatically make Scotland your bona fide residence. Irs 1040 x If you go there as a tourist, or on a short business trip, and return to the United States, you have not established bona fide residence in Scotland. Irs 1040 x But if you go to Scotland to work for an indefinite or extended period and you set up permanent quarters there for yourself and your family, you probably have established a bona fide residence in a foreign country, even though you intend to return eventually to the United States. Irs 1040 x You are clearly not a resident of Scotland in the first instance. Irs 1040 x However, in the second, you are a resident because your stay in Scotland appears to be permanent. Irs 1040 x If your residency is not as clearly defined as either of these illustrations, it may be more difficult to decide whether you have established a bona fide residence. Irs 1040 x Determination. Irs 1040 x   Questions of bona fide residence are determined according to each individual case, taking into account factors such as your intention, the purpose of your trip, and the nature and length of your stay abroad. Irs 1040 x   To meet the bona fide residence test, you must show the Internal Revenue Service (IRS) that you have been a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Irs 1040 x The IRS decides whether you are a bona fide resident of a foreign country largely on the basis of facts you report on Form 2555. Irs 1040 x IRS cannot make this determination until you file Form 2555. Irs 1040 x Statement to foreign authorities. Irs 1040 x   You are not considered a bona fide resident of a foreign country if you make a statement to the authorities of that country that you are not a resident of that country, and the authorities: Hold that you are not subject to their income tax laws as a resident, or Have not made a final decision on your status. Irs 1040 x Special agreements and treaties. Irs 1040 x   An income tax exemption provided in a treaty or other international agreement will not in itself prevent you from being a bona fide resident of a foreign country. Irs 1040 x Whether a treaty prevents you from becoming a bona fide resident of a foreign country is determined under all provisions of the treaty, including specific provisions relating to residence or privileges and immunities. Irs 1040 x Example 1. Irs 1040 x You are a U. Irs 1040 x S. Irs 1040 x citizen employed in the United Kingdom by a U. Irs 1040 x S. Irs 1040 x employer under contract with the U. Irs 1040 x S. Irs 1040 x Armed Forces. Irs 1040 x You are not subject to the North Atlantic Treaty Status of Forces Agreement. Irs 1040 x You may be a bona fide resident of the United Kingdom. Irs 1040 x Example 2. Irs 1040 x You are a U. Irs 1040 x S. Irs 1040 x citizen in the United Kingdom who qualifies as an “employee” of an armed service or as a member of a “civilian component” under the North Atlantic Treaty Status of Forces Agreement. Irs 1040 x You are not a bona fide resident of the United Kingdom. Irs 1040 x Example 3. Irs 1040 x You are a U. Irs 1040 x S. Irs 1040 x citizen employed in Japan by a U. Irs 1040 x S. Irs 1040 x employer under contract with the U. Irs 1040 x S. Irs 1040 x Armed Forces. Irs 1040 x You are subject to the agreement of the Treaty of Mutual Cooperation and Security between the United States and Japan. Irs 1040 x Being subject to the agreement does not make you a bona fide resident of Japan. Irs 1040 x Example 4. Irs 1040 x You are a U. Irs 1040 x S. Irs 1040 x citizen employed as an “official” by the United Nations in Switzerland. Irs 1040 x You are exempt from Swiss taxation on the salary or wages paid to you by the United Nations. Irs 1040 x This does not prevent you from being a bona fide resident of Switzerland. Irs 1040 x Effect of voting by absentee ballot. Irs 1040 x   If you are a U. Irs 1040 x S. Irs 1040 x citizen living abroad, you can vote by absentee ballot in any election held in the United States without risking your status as a bona fide resident of a foreign country. Irs 1040 x   However, if you give information to the local election officials about the nature and length of your stay abroad that does not match the information you give for the bona fide residence test, the information given in connection with absentee voting will be considered in determining your status, but will not necessarily be conclusive. Irs 1040 x Uninterrupted period including entire tax year. Irs 1040 x   To meet the bona fide residence test, you must reside in a foreign country or countries for an uninterrupted period that includes an entire tax year. Irs 1040 x An entire tax year is from January 1 through December 31 for taxpayers who file their income tax returns on a calendar year basis. Irs 1040 x   During the period of bona fide residence in a foreign country, you can leave the country for brief or temporary trips back to the United States or elsewhere for vacation or business. Irs 1040 x To keep your status as a bona fide resident of a foreign country, you must have a clear intention of returning from such trips, without unreasonable delay, to your foreign residence or to a new bona fide residence in another foreign country. Irs 1040 x Example 1. Irs 1040 x You arrived with your family in Lisbon, Portugal, on November 1, 2011. Irs 1040 x Your assignment is indefinite, and you intend to live there with your family until your company sends you to a new post. Irs 1040 x You immediately established residence there. Irs 1040 x You spent April of 2012 at a business conference in the United States. Irs 1040 x Your family stayed in Lisbon. Irs 1040 x Immediately following the conference, you returned to Lisbon and continued living there. Irs 1040 x On January 1, 2013, you completed an uninterrupted period of residence for a full tax year (2012), and you meet the bona fide residence test. Irs 1040 x Example 2. Irs 1040 x Assume the same facts as in Example 1, except that you transferred back to the United States on December 13, 2012. Irs 1040 x You would not meet the bona fide residence test because your bona fide residence in the foreign country, although it lasted more than a year, did not include a full tax year. Irs 1040 x You may, however, qualify for the foreign earned income exclusion or the housing exclusion or deduction under the physical presence test (discussed later). Irs 1040 x Bona fide resident for part of a year. Irs 1040 x   Once you have established bona fide residence in a foreign country for an uninterrupted period that includes an entire tax year, you are a bona fide resident of that country for the period starting with the date you actually began the residence and ending with the date you abandon the foreign residence. Irs 1040 x Your period of bona fide residence can include an entire tax year plus parts of 2 other tax years. Irs 1040 x Example. Irs 1040 x You were a bona fide resident of Singapore from March 1, 2011, through September 14, 2013. Irs 1040 x On September 15, 2013, you returned to the United States. Irs 1040 x Since you were a bona fide resident of a foreign country for all of 2012, you were also a bona fide resident of a foreign country from March 1, 2011, through the end of 2011 and from January 1, 2013, through September 14, 2013. Irs 1040 x Reassignment. Irs 1040 x   If you are assigned from one foreign post to another, you may or may not have a break in foreign residence between your assignments, depending on the circumstances. Irs 1040 x Example 1. Irs 1040 x You were a resident of Pakistan from October 1, 2012, through November 30, 2013. Irs 1040 x On December 1, 2013, you and your family returned to the United States to wait for an assignment to another foreign country. Irs 1040 x Your household goods also were returned to the United States. Irs 1040 x Your foreign residence ended on November 30, 2013, and did not begin again until after you were assigned to another foreign country and physically entered that country. Irs 1040 x Since you were not a bona fide resident of a foreign country for the entire tax year of 2012 or 2013 you do not meet the bona fide residence test in either year. Irs 1040 x You may, however, qualify for the foreign earned income exclusion or the housing exclusion or deduction under the physical presence test, discussed later. Irs 1040 x Example 2. Irs 1040 x Assume the same facts as in Example 1, except that upon completion of your assignment in Pakistan you were given a new assignment to Turkey. Irs 1040 x On December 1, 2013, you and your family returned to the United States for a month's vacation. Irs 1040 x On January 2, 2014, you arrived in Turkey for your new assignment. Irs 1040 x Because you did not interrupt your bona fide residence abroad, you meet the bona fide residence test. Irs 1040 x Physical Presence Test You meet the physical presence test if you are physically present in a foreign country or countries 330 full days during a period of 12 consecutive months. Irs 1040 x The 330 days do not have to be consecutive. Irs 1040 x Any U. Irs 1040 x S. Irs 1040 x citizen or resident alien can use the physical presence test to qualify for the exclusions and the deduction. Irs 1040 x The physical presence test is based only on how long you stay in a foreign country or countries. Irs 1040 x This test does not depend on the kind of residence you establish, your intentions about returning, or the nature and purpose of your stay abroad. Irs 1040 x 330 full days. Irs 1040 x   Generally, to meet the physical presence test, you must be physically present in a foreign country or countries for at least 330 full days during a 12-month period. Irs 1040 x You can count days you spent abroad for any reason. Irs 1040 x You do not have to be in a foreign country only for employment purposes. Irs 1040 x You can be on vacation. Irs 1040 x   You do not meet the physical presence test if illness, family problems, a vacation, or your employer's orders cause you to be present for less than the required amount of time. Irs 1040 x Exception. Irs 1040 x   You can be physically present in a foreign country or countries for less than 330 full days and still meet the physical presence test if you are required to leave a country because of war or civil unrest. Irs 1040 x See Waiver of Time Requirements, later. Irs 1040 x Full day. Irs 1040 x   A full day is a period of 24 consecutive hours, beginning at midnight. Irs 1040 x Travel. Irs 1040 x    When you leave the United States to go directly to a foreign country or when you return directly to the United States from a foreign country, the time you spend on or over international waters does not count toward the 330-day total. Irs 1040 x Example. Irs 1040 x You leave the United States for France by air on June 10. Irs 1040 x You arrive in France at 9:00 a. Irs 1040 x m. Irs 1040 x on June 11. Irs 1040 x Your first full day of physical presence in France is June 12. Irs 1040 x Passing over foreign country. Irs 1040 x   If, in traveling from the United States to a foreign country, you pass over a foreign country before midnight of the day you leave, the first day you can count toward the 330-day total is the day following the day you leave the United States. Irs 1040 x Example. Irs 1040 x You leave the United States by air at 9:30 a. Irs 1040 x m. Irs 1040 x on June 10 to travel to Kenya. Irs 1040 x You pass over western Africa at 11:00 p. Irs 1040 x m. Irs 1040 x on June 10 and arrive in Kenya at 12:30 a. Irs 1040 x m. Irs 1040 x on June 11. Irs 1040 x Your first full day in a foreign country is June 11. Irs 1040 x Change of location. Irs 1040 x   You can move about from one place to another in a foreign country or to another foreign country without losing full days. Irs 1040 x If any part of your travel is not within any foreign country and takes less than 24 hours, you are considered to be in a foreign country during that part of travel. Irs 1040 x Example 1. Irs 1040 x You leave Ireland by air at 11:00 p. Irs 1040 x m. Irs 1040 x on July 6 and arrive in Sweden at 5:00 a. Irs 1040 x m. Irs 1040 x on July 7. Irs 1040 x Your trip takes less than 24 hours and you lose no full days. Irs 1040 x Example 2. Irs 1040 x You leave Norway by ship at 10:00 p. Irs 1040 x m. Irs 1040 x on July 6 and arrive in Portugal at 6:00 a. Irs 1040 x m. Irs 1040 x on July 8. Irs 1040 x Since your travel is not within a foreign country or countries and the trip takes more than 24 hours, you lose as full days July 6, 7, and 8. Irs 1040 x If you remain in Portugal, your next full day in a foreign country is July 9. Irs 1040 x In United States while in transit. Irs 1040 x   If you are in transit between two points outside the United States and are physically present in the United States for less than 24 hours, you are not treated as present in the United States during the transit. Irs 1040 x You are treated as traveling over areas not within any foreign country. Irs 1040 x    Please click here for the text description of the image. Irs 1040 x Figure 4-B How to figure the 12-month period. Irs 1040 x   There are four rules you should know when figuring the 12-month period. Irs 1040 x Your 12-month period can begin with any day of the month. Irs 1040 x It ends the day before the same calendar day, 12 months later. Irs 1040 x Your 12-month period must be made up of consecutive months. Irs 1040 x Any 12-month period can be used if the 330 days in a foreign country fall within that period. Irs 1040 x You do not have to begin your 12-month period with your first full day in a foreign country or end it with the day you leave. Irs 1040 x You can choose the 12-month period that gives you the greatest exclusion. Irs 1040 x In determining whether the 12-month period falls within a longer stay in the foreign country, 12-month periods can overlap one another. Irs 1040 x Example 1. Irs 1040 x You are a construction worker who works on and off in a foreign country over a 20-month period. Irs 1040 x You might pick up the 330 full days in a 12-month period only during the middle months of the time you work in the foreign country because the first few and last few months of the 20-month period are broken up by long visits to the United States. Irs 1040 x Example 2. Irs 1040 x You work in New Zealand for a 20-month period from January 1, 2012, through August 31, 2013, except that you spend 28 days in February 2012 and 28 days in February 2013 on vacation in the United States. Irs 1040 x You are present in New Zealand for at least 330 full days during each of the following two 12-month periods: January 1, 2012 – December 31, 2012 and September 1, 2012 – August 31, 2013. Irs 1040 x By overlapping the 12-month periods in this way, you meet the physical presence test for the whole 20-month period. Irs 1040 x See Figure 4-B, on the previous page. Irs 1040 x Waiver of Time Requirements Both the bona fide residence test and the physical presence test contain minimum time requirements. Irs 1040 x The minimum time requirements can be waived, however, if you must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. Irs 1040 x You must be able to show that you reasonably could have expected to meet the minimum time requirements if not for the adverse conditions. Irs 1040 x To qualify for the waiver, you must actually have your tax home in the foreign country and be a bona fide resident of, or be physically present in, the foreign country on or before the beginning date of the waiver. Irs 1040 x Early in 2014, the IRS will publish in the Internal Revenue Bulletin a list of the only countries that qualify for the waiver for 2013 and the effective dates. Irs 1040 x If you left one of the countries on or after the date listed for each country, you can meet the bona fide residence test or physical presence test for 2013 without meeting the minimum time requirement. Irs 1040 x However, in figuring your exclusion, the number of your qualifying days of bona fide residence or physical presence includes only days of actual residence or presence within the country. Irs 1040 x U. Irs 1040 x S. Irs 1040 x Travel Restrictions If you are present in a foreign country in violation of U. Irs 1040 x S. Irs 1040 x law, you will not be treated as a bona fide resident of a foreign country or as physically present in a foreign country while you are in violation of the law. Irs 1040 x Income that you earn from sources within such a country for services performed during a period of violation does not qualify as foreign earned income. Irs 1040 x Your housing expenses within that country (or outside that country for housing your spouse or dependents) while you are in violation of the law cannot be included in figuring your foreign housing amount. Irs 1040 x For 2013, the only country to which travel restrictions applied was Cuba. Irs 1040 x The restrictions applied for the entire year. Irs 1040 x However, individuals working at the U. Irs 1040 x S. Irs 1040 x Naval Base at Guantanamo Bay in Cuba are not in violation of U. Irs 1040 x S. Irs 1040 x law. Irs 1040 x Personal service income earned by individuals at the base is eligible for the foreign earned income exclusion provided the other requirements are met. Irs 1040 x Foreign Earned Income To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income. Irs 1040 x Foreign earned income generally is income you receive for services you perform during a period in which you meet both of the following requirements. Irs 1040 x Your tax home is in a foreign country. Irs 1040 x You meet either the bona fide residence test or the physical presence test. Irs 1040 x To determine whether your tax home is in a foreign country, see Tax Home in Foreign Country, earlier. Irs 1040 x To determine whether you meet either the bona fide residence test or the physical presence test, see Bona Fide Residence Test and Physical Presence Test, earlier. Irs 1040 x Foreign earned income does not include the following amounts. Irs 1040 x The value of meals and lodging that you exclude from your income because the meals and lodging were furnished for the convenience of your employer. Irs 1040 x Pension or annuity payments you receive, including social security benefits (see Pensions and annuities, later). Irs 1040 x Pay you receive as an employee of the U. Irs 1040 x S. Irs 1040 x Government. Irs 1040 x (See U. Irs 1040 x S. Irs 1040 x Government Employees, later. Irs 1040 x ) Amounts you include in your income because of your employer's contributions to a nonexempt employee trust or to a nonqualified annuity contract. Irs 1040 x Any unallowable moving expense deduction that you choose to recapture as explained under Moving Expense Attributable to Foreign Earnings in 2 Years in chapter 5. Irs 1040 x Payments you receive after the end of the tax year following the tax year in which you performed the services that earned the income. Irs 1040 x Earned income. Irs 1040 x   This is pay for personal services performed, such as wages, salaries, or professional fees. Irs 1040 x The list that follows classifies many types of income into three categories. Irs 1040 x The column headed Variable Income lists income that may fall into either the earned income category, the unearned income category, or partly into both. Irs 1040 x For more information on earned and unearned income, see Earned and Unearned Income, later. Irs 1040 x Earned Income Unearned Income Variable Income Salaries and wages Dividends Business profits Commissions Interest Royalties Bonuses Capital gains Rents Professional fees Gambling winnings Scholarships and fellowships Tips Alimony     Social security benefits     Pensions     Annuities     In addition to the types of earned income listed, certain noncash income and allowances or reimbursements are considered earned income. Irs 1040 x Noncash income. Irs 1040 x   The fair market value of property or facilities provided to you by your employer in the form of lodging, meals, or use of a car is earned income. Irs 1040 x Allowances or reimbursements. Irs 1040 x   Earned income includes allowances or reimbursements you receive, such as the following amounts. Irs 1040 x    Cost-of-living allowances. Irs 1040 x Overseas differential. Irs 1040 x Family allowance. Irs 1040 x Reimbursement for education or education allowance. Irs 1040 x Home leave allowance. Irs 1040 x Quarters allowance. Irs 1040 x Reimbursement for moving or moving allowance (unless excluded from income as discussed later in Reimbursement of employee expenses under Earned and Unearned Income). Irs 1040 x Source of Earned Income The source of your earned income is the place where you perform the services for which you received the income. Irs 1040 x Foreign earned income is income you receive for working in a foreign country. Irs 1040 x Where or how you are paid has no effect on the source of the income. Irs 1040 x For example, income you receive for work done in Austria is income from a foreign source even if the income is paid directly to your bank account in the United States and your employer is located in New York City. Irs 1040 x Example. Irs 1040 x You are a U. Irs 1040 x S. Irs 1040 x citizen, a bona fide resident of Canada, and working as a mining engineer. Irs 1040 x Your salary is $76,800 per year. Irs 1040 x You also receive a $6,000 cost-of-living allowance, and a $6,000 education allowance. Irs 1040 x Your employment contract did not indicate that you were entitled to these allowances only while outside the United States. Irs 1040 x Your total income is $88,800. Irs 1040 x You work a 5-day week, Monday through Friday. Irs 1040 x After subtracting your vacation, you have a total of 240 workdays in the year. Irs 1040 x You worked in the United States during the year for 6 weeks (30 workdays). Irs 1040 x The following shows how to figure the part of your income that is for work done in Canada during the year. Irs 1040 x   Number of days worked in Canada during the year (210) × Total income ($88,800) = $77,700     Number of days of work during the year for which payment was made (240)   Your foreign source earned income is $77,700. Irs 1040 x Earned and Unearned Income Earned income was defined earlier as pay for personal services performed. Irs 1040 x Some types of income are not easily identified as earned or unearned income. Irs 1040 x Some of these types of income are further explained here. Irs 1040 x Income from a sole proprietorship or partnership. Irs 1040 x   Income from a business in which capital investment is an important part of producing the income may be unearned income. Irs 1040 x If you are a sole proprietor or partner and your personal services are also an important part of producing the income, the part of the income that represents the value of your personal services will be treated as earned income. Irs 1040 x Capital a factor. Irs 1040 x   If capital investment is an important part of producing income, no more than 30% of your share of the net profits of the business is earned income. Irs 1040 x   If you have no net profits, the part of your gross profit that represents a reasonable allowance for personal services actually performed is considered earned income. Irs 1040 x Because you do not have a net profit, the 30% limit does not apply. Irs 1040 x Example 1. Irs 1040 x You are a U. Irs 1040 x S. Irs 1040 x citizen and meet the bona fide residence test. Irs 1040 x You invest in a partnership based in Cameroon that is engaged solely in selling merchandise outside the United States. Irs 1040 x You perform no services for the partnership. Irs 1040 x At the end of the tax year, your share of the net profits is $80,000. Irs 1040 x The entire $80,000 is unearned income. Irs 1040 x Example 2. Irs 1040 x Assume that in Example 1 you spend time operating the business. Irs 1040 x Your share of the net profits is $80,000; 30% of your share of the profits is $24,000. Irs 1040 x If the value of your services for the year is $15,000, your earned income is limited to the value of your services, $15,000. Irs 1040 x Capital not a factor. Irs 1040 x   If capital is not an income-producing factor and personal services produce the business income, the 30% rule does not apply. Irs 1040 x The entire amount of business income is earned income. Irs 1040 x Example. Irs 1040 x You and Lou Green are management consultants and operate as equal partners in performing services outside the United States. Irs 1040 x Because capital is not an income- producing factor, all the income from the partnership is considered earned income. Irs 1040 x Income from a corporation. Irs 1040 x   The salary you receive from a corporation is earned income only if it represents a reasonable allowance as compensation for work you do for the corporation. Irs 1040 x Any amount over what is considered a reasonable salary is unearned income. Irs 1040 x Example 1. Irs 1040 x You are a U. Irs 1040 x S. Irs 1040 x citizen and an officer and stockholder of a corporation in Honduras. Irs 1040 x You perform no work or service of any kind for the corporation. Irs 1040 x During the tax year you receive a $10,000 “salary” from the corporation. Irs 1040 x The $10,000 clearly is not for personal services and is unearned income. Irs 1040 x Example 2. Irs 1040 x You are a U. Irs 1040 x S. Irs 1040 x citizen and work full time as secretary-treasurer of your corporation. Irs 1040 x During the tax year you receive $100,000 as salary from the corporation. Irs 1040 x If $80,000 is a reasonable allowance as pay for the work you did, then $80,000 is earned income. Irs 1040 x Stock options. Irs 1040 x   You may have earned income if you disposed of stock that you got by exercising a stock option granted to you under an employee stock purchase plan. Irs 1040 x   If your gain on the disposition of stock you got by exercising an option is treated as capital gain, your gain is unearned income. Irs 1040 x   However, if you disposed of the stock less than 2 years after you were granted the option or less than 1 year after you got the stock, part of the gain on the disposition may be earned income. Irs 1040 x It is considered received in the year you disposed of the stock and earned in the year you performed the services for which you were granted the option. Irs 1040 x Any part of the earned income that is due to work you did outside the United States is foreign earned income. Irs 1040 x   See Publication 525, Taxable and Nontaxable Income, for a discussion of the treatment of stock options. Irs 1040 x Pensions and annuities. Irs 1040 x    For purposes of the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, amounts received as pensions or annuities are unearned income. Irs 1040 x Royalties. Irs 1040 x   Royalties from the leasing of oil and mineral lands and patents generally are a form of rent or dividends and are unearned income. Irs 1040 x   Royalties received by a writer are earned income if they are received: For the transfer of property rights of the writer in the writer's product, or Under a contract to write a book or series of articles. Irs 1040 x Rental income. Irs 1040 x   Generally, rental income is unearned income. Irs 1040 x If you perform personal services in connection with the production of rent, up to 30% of your net rental income can be considered earned income. Irs 1040 x Example. Irs 1040 x Larry Smith, a U. Irs 1040 x S. Irs 1040 x citizen living in Australia, owns and operates a rooming house in Sydney. Irs 1040 x If he is operating the rooming house as a business that requires capital and personal services, he can consider up to 30% of net rental income as earned income. Irs 1040 x On the other hand, if he just owns the rooming house and performs no personal services connected with its operation, except perhaps making minor repairs and collecting rents, none of his net income from the house is considered earned income. Irs 1040 x It is all unearned income. Irs 1040 x Professional fees. Irs 1040 x   If you are engaged in a professional occupation (such as a doctor or lawyer), all fees received in the performance of these services are earned income. Irs 1040 x Income of an artist. Irs 1040 x   Income you receive from the sale of paintings you created is earned income. Irs 1040 x Scholarships and fellowships. Irs 1040 x   Any portion of a scholarship or fellowship grant that is paid to you for teaching, research or other services is considered earned income if you must include it in your gross income. Irs 1040 x If the payer of the grant is required to provide you with a Form W-2, Wage and Tax Statement, these amounts will be listed as wages. Irs 1040 x    Certain scholarship and fellowship income may be exempt under other provisions. Irs 1040 x See Publication 970, Tax Benefits for Education, chapter 1. Irs 1040 x Use of employer's property or facilities. Irs 1040 x   If you receive fringe benefits in the form of the right to use your employer's property or facilities, the fair market value of that right is earned income. Irs 1040 x Fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being required to buy or sell, and both having reasonable knowledge of all the necessary facts. Irs 1040 x Example. Irs 1040 x You are privately employed and live in Japan all year. Irs 1040 x You are paid a salary of $6,000 a month. Irs 1040 x You live rent-free in a house provided by your employer that has a fair rental value of $3,000 a month. Irs 1040 x The house is not provided for your employer's convenience. Irs 1040 x You report on the calendar-year, cash basis. Irs 1040 x You received $72,000 salary from foreign sources plus $36,000 fair rental value of the house, or a total of $108,000 of earned income. Irs 1040 x Reimbursement of employee expenses. Irs 1040 x   If you are reimbursed under an accountable plan (defined below) for expenses you incur on your employer's behalf and you have adequately accounted to your employer for the expenses, do not include the reimbursement for those expenses in your earned income. Irs 1040 x   The expenses for which you are reimbursed are not considered allocable (related) to your earned income. Irs 1040 x If expenses and reimbursement are equal, there is nothing to allocate to excluded income. Irs 1040 x If expenses are more than the reimbursement, the unreimbursed expenses are considered to have been incurred in producing earned income and must be divided between your excluded and included income in determining the amount of unreimbursed expenses you can deduct. Irs 1040 x (See chapter 5. Irs 1040 x ) If the reimbursement is more than the expenses, no expenses remain to be divided between excluded and included income and the excess reimbursement must be included in earned income. Irs 1040 x   These rules do not apply to the following individuals. Irs 1040 x Straight-commission salespersons. Irs 1040 x Employees who have arrangements with their employers under which taxes are not withheld on a percentage of the commissions because the employers consider that percentage to be attributable to the employees' expenses. Irs 1040 x Accountable plan. Irs 1040 x   An accountable plan is a reimbursement or allowance arrangement that includes all three of the following rules. Irs 1040 x The expenses covered under the plan must have a business connection. Irs 1040 x The employee must adequately account to the employer for these expenses within a reasonable period of time. Irs 1040 x The employee must return any excess reimbursement or allowance within a reasonable period of time. Irs 1040 x Reimbursement of moving expenses. Irs 1040 x   Reimbursement of moving expenses may be earned income. Irs 1040 x You must include as earned income: Any reimbursements of, or payments for, nondeductible moving expenses, Reimbursements that are more than your deductible expenses and that you do not return to your employer, Any reimbursements made (or treated as made) under a nonaccountable plan (any plan that does not meet the rules listed above for an accountable plan), even if they are for deductible expenses, and Any reimbursement of moving expenses you deducted in an earlier year. Irs 1040 x This section discusses reimbursements that must be included in earned income. Irs 1040 x Publication 521, Moving Expenses, discusses additional rules that apply to moving expense deductions and reimbursements. Irs 1040 x   The rules for determining when the reimbursement is considered earned or where the reimbursement is considered earned may differ somewhat from the general rules previously discussed. Irs 1040 x   Although you receive the reimbursement in one tax year, it may be considered earned for services performed, or to be performed, in another tax year. Irs 1040 x You must report the reimbursement as income on your return in the year you receive it, even if it is considered earned during a different year. Irs 1040 x Move from U. Irs 1040 x S. Irs 1040 x to foreign country. Irs 1040 x   If you move from the United States to a foreign country, your moving expense reimbursement is generally considered pay for future services to be performed at the new location. Irs 1040 x The reimbursement is considered earned solely in the year of the move if you qualify for the exclusion for a period that includes at least 120 days during that tax year. Irs 1040 x   If you are neither a bona fide resident of nor physically present in a foreign country or countries for a period that includes 120 days during the year of the move, a portion of the reimbursement is considered earned in the year of the move and a portion is considered earned in the year following the year of the move. Irs 1040 x To figure the amount earned in the year of the move, multiply the reimbursement by a fraction. Irs 1040 x The numerator (top number) is the number of days in your qualifying period that fall within the year of the move, and the denominator (bottom number) is the total number of days in the year of the move. Irs 1040 x   The difference between the total reimbursement and the amount considered earned in the year of the move is the amount considered earned in the year following the year of the move. Irs 1040 x The part earned in each year is figured as shown in the following example. Irs 1040 x Example. Irs 1040 x You are a U. Irs 1040 x S. Irs 1040 x citizen working in the United States. Irs 1040 x You were told in October 2012 that you were being transferred to a foreign country. Irs 1040 x You arrived in the foreign country on December 15, 2012, and you are a bona fide resident for the remainder of 2012 and all of 2013. Irs 1040 x Your employer reimbursed you $2,000 in January 2013 for the part of the moving expense that you were not allowed to deduct. Irs 1040 x Because you did not qualify for the exclusion under the bona fide residence test for at least 120 days in 2012 (the year of the move), the reimbursement is considered pay for services performed in the foreign country for both 2012 and 2013. Irs 1040 x You figure the part of the reimbursement for services performed in the foreign country in 2012 by multiplying the total reimbursement by a fraction. Irs 1040 x The fraction is the number of days during which you were a bona fide resident in 2012 (the year of the move) divided by 366. Irs 1040 x The remaining part of the reimbursement is for services performed in the foreign country in 2013. Irs 1040 x This computation is used only to determine when the reimbursement is considered earned. Irs 1040 x You would include the amount of the reimbursement in income in 2013, the year you received it. Irs 1040 x Move between foreign countries. Irs 1040 x   If you move between foreign countries, any moving expense reimbursement that you must include in income will be considered earned in the year of the move if you qualify for the foreign earned income exclusion for a period that includes at least 120 days in the year of the move. Irs 1040 x Move to U. Irs 1040 x S. Irs 1040 x   If you move to the United States, the moving expense reimbursement that you must include in income is generally considered to be U. Irs 1040 x S. Irs 1040 x source income. Irs 1040 x   However, if under either an agreement between you and your employer or a statement of company policy that is reduced to writing before your move to the foreign country, your employer will reimburse you for your move back to the United States regardless of whether you continue to work for the employer, the includible reimbursement is considered compensation for past services performed in the foreign country. Irs 1040 x The includible reimbursement is considered earned in the year of the move if you qualify for the foreign earned income exclusion for a period that includes at least 120 days during that year. Irs 1040 x Otherwise, you treat the includible reimbursement as received for services performed in the foreign country in the year of the move and the year immediately before the year of the move. Irs 1040 x   See the discussion under Move from U. Irs 1040 x S. Irs 1040 x to foreign country , earlier, to figure the amount of the includible reimbursement considered earned in the year of the move. Irs 1040 x The amount earned in the year before the year of the move is the difference between the total includible reimbursement and the amount earned in the year of the move. Irs 1040 x Example. Irs 1040 x You are a U. Irs 1040 x S. Irs 1040 x citizen employed in a foreign country. Irs 1040 x You retired from employment with your employer on March 31, 2013, and returned to the United States after having been a bona fide resident of the foreign country for several years. Irs 1040 x A written agreement with your employer entered into before you went abroad provided that you would be reimbursed for your move back to the United States. Irs 1040 x In April 2013, your former employer reimbursed you $4,000 for the part of the cost of your move back to the United States that you were not allowed to deduct. Irs 1040 x Because you were not a bona fide resident of a foreign country or countries for a period that included at least 120 days in 2013 (the year of the move), the includible reimbursement is considered pay for services performed in the foreign country for both 2013 and 2012. Irs 1040 x You figure the part of the moving expense reimbursement for services performed in the foreign country for 2013 by multiplying the total includible reimbursement by a fraction. Irs 1040 x The fraction is the number of days of foreign residence during the year (90) divided by the number of days in the year (365). Irs 1040 x The remaining part of the includible reimbursement is for services performed in the foreign country in 2012. Irs 1040 x You report the amount of the includible reimbursement in 2013, the year you received it. Irs 1040 x    In this example, if you met the physical presence test for a period that included at least 120 days in 2013, the moving expense reimbursement would be considered earned entirely in the year of the move. Irs 1040 x Storage expense reimbursements. Irs 1040 x   If you are reimbursed for storage expenses, the reimbursement is for services you perform during the period of time for which the storage expenses are incurred. Irs 1040 x U. Irs 1040 x S. Irs 1040 x Government Employees For purposes of the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, foreign earned income does not include any amounts paid by the United States or any of its agencies to its employees. Irs 1040 x This includes amounts paid from both appropriated and nonappropriated funds. Irs 1040 x The following organizations (and other organizations similarly organized and operated under United States Army, Navy, or Air Force regulations) are integral parts of the Armed Forces, agencies, or instrumentalities of the United States. Irs 1040 x United States Armed Forces exchanges. Irs 1040 x Commissioned and noncommissioned officers' messes. Irs 1040 x Armed Forces motion picture services. Irs 1040 x Kindergartens on foreign Armed Forces installations. Irs 1040 x Amounts paid by the United States or its agencies to persons who are not their employees may qualify for exclusion or deduction. Irs 1040 x If you are a U. Irs 1040 x S. Irs 1040 x Government employee paid by a U. Irs 1040 x S. Irs 1040 x agency that assigned you to a foreign government to perform specific services for which the agency is reimbursed by the foreign government, your pay is from the U. Irs 1040 x S. Irs 1040 x Government and does not qualify for exclusion or deduction. Irs 1040 x If you have questions about whether you are an employee or an independent contractor, get Publication 15-A, Employer's Supplemental Tax Guide. Irs 1040 x American Institute in Taiwan. Irs 1040 x   Amounts paid by the American Institute in Taiwan are not foreign earned income for purposes of the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction. Irs 1040 x If you are an employee of the American Institute in Taiwan, allowances you receive are exempt from U. Irs 1040 x S. Irs 1040 x tax up to the amount that equals tax-exempt allowances received by civilian employees of the U. Irs 1040 x S. Irs 1040 x Government. Irs 1040 x Allowances. Irs 1040 x   Cost-of-living and foreign-area allowances paid under certain acts of Congress to U. Irs 1040 x S. Irs 1040 x civilian officers and employees stationed in Alaska and Hawaii or elsewhere outside the 48 contiguous states and the District of Columbia can be excluded from gross income. Irs 1040 x Post differentials are wages that must be included in gross income, regardless of the act of Congress under which they are paid. Irs 1040 x More information. Irs 1040 x   Publication 516, U. Irs 1040 x S. Irs 1040 x Government Civilian Employees Stationed Abroad, has more information for U. Irs 1040 x S. Irs 1040 x Government employees abroad. Irs 1040 x Exclusion of Meals and Lodging You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met. Irs 1040 x The meals are furnished: On the business premises of your employer, and For the convenience of your employer. Irs 1040 x The lodging is furnished: On the business premises of your employer, For the convenience of your employer, and As a condition of your employment. Irs 1040 x If these conditions are met, do not include the value of the meals or lodging in your income, even if a law or your employment contract says that they are provided as compensation. Irs 1040 x Amounts you do not include in income because of these rules are not foreign earned income. Irs 1040 x If you receive a Form W-2, excludable amounts should not be included in the total reported in box 1 as wages. Irs 1040 x Family. Irs 1040 x   Your family, for this purpose, includes only your spouse and your dependents. Irs 1040 x Lodging. Irs 1040 x   The value of lodging includes the cost of heat, electricity, gas, water, sewer service, and similar items needed to make the lodging fit to live in. Irs 1040 x Business premises of employer. Irs 1040 x   Generally, the business premises of your employer is wherever you work. Irs 1040 x For example, if you work as a housekeeper, meals and lodging provided in your employer's home are provided on the business premises of your employer. Irs 1040 x Similarly, meals provided to cowhands while herding cattle on land leased or owned by their employer are considered provided on the premises of their employer. Irs 1040 x Convenience of employer. Irs 1040 x   Whether meals or lodging are provided for your employer's convenience must be determined from all the facts and circumstances. Irs 1040 x Meals furnished at no charge are considered provided for your employer's convenience if there is a good business reason for providing them, other than to give you more pay. Irs 1040 x   On the other hand, if your employer provides meals to you or your family as a means of giving you more pay, and there is no other business reason for providing them, their value is extra income to you because they are not furnished for the convenience of your employer. Irs 1040 x Condition of employment. Irs 1040 x   Lodging is provided as a condition of employment if you must accept the lodging to properly carry out the duties of your job. Irs 1040 x You must accept lodging to properly carry out your duties if, for example, you must be available for duty at all times or you could not perform your duties if the lodging was not furnished. Irs 1040 x Foreign camps. Irs 1040 x   If the lodging is in a camp located in a foreign country, the camp is considered part of your employer's business premises. Irs 1040 x The camp must be: Provided for your employer's convenience because the place where you work is in a remote area where satisfactory housing is not available to you on the open market within a reasonable commuting distance, Located as close as reasonably possible in the area where you work, and Provided in a common area or enclave that is not available to the general public for lodging or accommodations and that normally houses at least ten employees. Irs 1040 x Foreign Earned Income Exclusion If your tax home is in a foreign country and you meet the bona fide residence test or the physical presence test, you can choose to exclude from your income a limited amount of your foreign earned income. Irs 1040 x Foreign earned income was defined earlier in this chapter. Irs 1040 x You also can choose to exclude from your income a foreign housing amount. Irs 1040 x This is explained later under Foreign Housing Exclusion. Irs 1040 x If you choose to exclude a foreign housing amount, you must figure the foreign housing exclusion before you figure the foreign earned income exclusion. Irs 1040 x Your foreign earned income exclusion is limited to your foreign earned income minus your foreign housing exclusion. Irs 1040 x If you choose to exclude foreign earned income, you cannot deduct, exclude, or claim a credit for any item that can be allocated to or charged against the excluded amounts. Irs 1040 x This includes any expenses, losses, and other normally deductible items allocable to the excluded income. Irs 1040 x For more information about deductions and credits, see chapter 5 . Irs 1040 x Limit on Excludable Amount You may be able to exclude up to $97,600 of your foreign earned income in 2013. Irs 1040 x You cannot exclude more than the smaller of: $97,600, or Your foreign earned income (discussed earlier) for the tax year minus your foreign housing exclusion (discussed later). Irs 1040 x If both you and your spouse work abroad and each of you meets either the bona fide residence test or the physical presence test, you can each choose the foreign earned income exclusion. Irs 1040 x You do not both need to meet the same test. Irs 1040 x Together, you and your spouse can exclude as much as $195,200. Irs 1040 x Paid in year following work. Irs 1040 x   Generally, you are considered to have earned income in the year in which you do the work for which you receive the income, even if you work in one year but are not paid until the following year. Irs 1040 x If you report your income on a cash basis, you report the income on your return for the year you receive it. Irs 1040 x If you work one year, but are not paid for that work until the next year, the amount you can exclude in the year you are paid is the amount you could have excluded in the year you did the work if you had been paid in that year. Irs 1040 x For an exception to this general rule, see Year-end payroll period, later. Irs 1040 x Example. Irs 1040 x You were a bona fide resident of Brazil for all of 2012 and 2013. Irs 1040 x You report your income on the cash basis. Irs 1040 x In 2012, you were paid $84,200 for work you did in Brazil during that year. Irs 1040 x You excluded all of the $84,200 from your income in 2012. Irs 1040 x In 2013, you were paid $117,300 for your work in Brazil. Irs 1040 x $18,800 was for work you did in 2012 and $98,500 was for work you did in 2013. Irs 1040 x You can exclude $10,900 of the $18,800 from your income in 2013. Irs 1040 x This is the $95,100 maximum exclusion in 2012 minus the $84,200 actually excluded that year. Irs 1040 x You must include the remaining $7,900 in income in 2013 because you could not have excluded that income in 2012 if you had received it that year. Irs 1040 x You can exclude $97,600 of the $98,500 you were paid for work you did in 2013 from your 2013 income. Irs 1040 x Your total foreign earned income exclusion for 2013 is $108,500 ($10,900 for work you did in 2012 and $97,600 for work you did in 2013). Irs 1040 x You would include in your 2013 income $8,800 ($7,900 for the work you did in 2012 and $900 for the work you did in 2013). Irs 1040 x Year-end payroll period. Irs 1040 x   There is an exception to the general rule that income is considered earned in the year you do the work for which you receive the income. Irs 1040 x If you are a cash-basis taxpayer, any salary or wage payment you receive after the end of the year in which you do the work for which you receive the pay is considered earned entirely in the year you receive it if all four of the following apply. Irs 1040 x The period for which the payment is made is a normal payroll period of your employer that regularly applies to you. Irs 1040 x The payroll period includes the last day of your tax year (December 31 if you figure your taxes on a calendar-year basis). Irs 1040 x The payroll period is not longer than 16 days. Irs 1040 x The payday comes at the same time in relation to the payroll period that it would normally come and it comes before the end of the next payroll period. Irs 1040 x Example. Irs 1040 x You are paid twice a month. Irs 1040 x For the normal payroll period that begins on the first of the month and ends on the fifteenth of the month, you are paid on the sixteenth day of the month. Irs 1040 x For the normal payroll period that begins on the sixteenth of the month and ends on the last day of the month, you are paid on the first day of the following month. Irs 1040 x Because all of the above conditions are met, the pay you received on January 1, 2013, is considered earned in 2013. Irs 1040 x Income earned over more than 1 year. Irs 1040 x   Regardless of when you actually receive income, you must apply it to the year in which you earned it in figuring your excludable amount for that year. Irs 1040 x For example, a bonus may be based on work you did over several years. Irs 1040 x You determine the amount of the bonus that is considered earned in a particular year in two steps. Irs 1040 x Divide the bonus by the number of calendar months in the period when you did the work that resulted in the bonus. Irs 1040 x Multiply the result of (1) by the number of months you did the work during the year. Irs 1040 x This is the amount that is subject to the exclusion limit for that tax year. Irs 1040 x Income received more than 1 year after it was earned. Irs 1040 x   You cannot exclude income you receive after the end of the year following the year you do the work to earn it. Irs 1040 x Example. Irs 1040 x   You were a bona fide resident of Sweden for 2011, 2012, and 2013. Irs 1040 x You report your income on the cash basis. Irs 1040 x In 2011, you were paid $69,000 for work you did in Sweden that year and in 2012 you were paid $74,000 for that year's work in Sweden. Irs 1040 x You excluded all the income on your 2011 and 2012 returns. Irs 1040 x   In 2013, you were paid $92,000; $82,000 for your work in Sweden during 2013, and $10,000 for work you did in Sweden in 2011. Irs 1040 x You cannot exclude any of the $10,000 for work done in 2011 because you received it after the end of the year following the year in which you earned it. Irs 1040 x You must include the $10,000 in income. Irs 1040 x You can exclude all of the $82,000 received for work you did in 2013. Irs 1040 x Community income. Irs 1040 x   The maximum exclusion applies separately to the earnings of spouses. Irs 1040 x Ignore any community property laws when you figure your limit on the foreign earned income exclusion. Irs 1040 x Part-year exclusion. Irs 1040 x   If the period for which you qualify for the foreign earned income exclusion includes only part of the year, you must adjust the maximum limit based on the number of qualifying days in the year. Irs 1040 x The number of qualifying days is the number of days in the year within the period on which you both: Have your tax home in a foreign country, and Meet either the bona fide residence test or the physical presence test. Irs 1040 x   For this purpose, you can count as qualifying days all days within a period of 12 consecutive months once you are physically present and have your tax home in a foreign country for 330 full days. Irs 1040 x To figure your maximum exclusion, multiply the maximum excludable amount for the year by the number of your qualifying days in the year, and then divide the result by the number of days in the year. Irs 1040 x Example. Irs 1040 x You report your income on the calendar-year basis and you qualified for the foreign earned income exclusion under the bona fide residence test for 75 days in 2013. Irs 1040 x You can exclude a maximum of 75/365 of $97,600, or $20,055, of your foreign earned income for 2013. Irs 1040 x If you qualify under the bona fide residence test for all of 2014, you can exclude your foreign earned income up to the 2014 limit. Irs 1040 x Physical presence test. Irs 1040 x   Under the physical presence test, a 12-month period can be any period of 12 consecutive months that includes 330 full days. Irs 1040 x If you qualify for the foreign earned income exclusion under the physical presence test for part of a year, it is important to carefully choose the 12-month period that will allow the maximum exclusion for that year. Irs 1040 x Example. Irs 1040 x You are physically present and have your tax home in a foreign country for a 16-month period from June 1, 2012, through September 30, 2013, except for 16 days in December 2012 when you were on vacation in the United States. Irs 1040 x You figure the maximum exclusion for 2012 as follows. Irs 1040 x Beginning with June 1, 2012, count forward 330 full days. Irs 1040 x Do not count the 16 days you spent in the United States. Irs 1040 x The 330th day, May 12, 2013, is the last day of a 12-month period. Irs 1040 x Count backward 12 months from May 11, 2013, to find the first day of this 12-month period, May 12, 2012. Irs 1040 x This 12-month period runs from May 12, 2012, through May 11, 2013. Irs 1040 x Count the total days during 2012 that fall within this 12-month period. Irs 1040 x This is 234 days (May 12, 2012 – December 31, 2012). Irs 1040 x Multiply $95,100 (the maximum exclusion for 2012) by the fraction 234/366 to find your maximum exclusion for 2012 ($60,802). Irs 1040 x You figure the maximum exclusion for 2013 in the opposite manner. Irs 1040 x Beginning with your last full day, September 30, 2013, count backward 330 full days. Irs 1040 x Do not count the 16 days you spent in the United States. Irs 1040 x That day, October 20, 2012, is the first day of a 12-month period. Irs 1040 x Count forward 12 months from October 20, 2012, to find the last day of this 12-month period, October 19, 2013. Irs 1040 x This 12-month period runs from October 20, 2012, through October 19, 2013. Irs 1040 x Count the total days during 2013 that fall within this 12-month period. Irs 1040 x This is 292 days (January 1, 2013 – October 19, 2013). Irs 1040 x Multiply $97,600, the maximum limit, by the fraction 292/365 to find your maximum exclusion for 2013 ($78,080). Irs 1040 x Choosing the Exclusion The foreign earned income exclusion is voluntary. Irs 1040 x You can choose the exclusion by completing the appropriate parts of Form 2555. Irs 1040 x When You Can Choose the Exclusion Your initial choice of the exclusion on Form 2555 or Form 2555-EZ generally must be made with one of the following returns. Irs 1040 x A return filed by the due date (including any extensions). Irs 1040 x A return amending a timely-filed return. Irs 1040 x Amended returns generally must be filed by the later of 3 years after the filing date of the original return or 2 years after the tax is paid. Irs 1040 x A return filed within 1 year from the original due date of the return (determined without regard to any extensions). Irs 1040 x Filing after the above periods. Irs 1040 x   You can choose the exclusion on a return filed after the periods described above if you owe no federal income tax after taking into account the exclusion. Irs 1040 x If you owe federal income tax after taking into account the exclusion, you can choose the exclusion on a return filed after the periods described earlier if you file before the IRS discovers that you failed to choose the exclusion. Irs 1040 x Whether or not you owe federal income tax after taking the exclusion into account, if you file your return after the periods described earlier, you must type or legibly print at the top of the first page of the Form 1040 “Filed pursuant to section 1. Irs 1040 x 911-7(a)(2)(i)(D). Irs 1040 x ” If you owe federal income tax after taking into account the foreign earned income exclusion and the IRS discovered that you failed to choose the exclusion, you may still be able to choose the exclusion. Irs 1040 x You must request a private letter ruling under Income Tax Regulation 301. Irs 1040 x 9100-3 and Revenue Procedure 2013-1, 2013-1 I. Irs 1040 x R. Irs 1040 x B. Irs 1040 x 1, available at www. Irs 1040 x irs. Irs 1040 x gov/irb/2013-01_IRB/ar06. Irs 1040 x html. Irs 1040 x Effect of Choosing the Exclusion Once you choose to exclude your foreign earned income, that choice remains in effect for that year and all later years unless you revoke it. Irs 1040 x Foreign tax credit or deduction. Irs 1040 x  
Print - Click this link to Print this page

Taxpayer Advocate Service

The Taxpayer Advocate Service (TAS) is your voice at the IRS. Our job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. We offer free help to guide you through the often-confusing process of resolving your tax problems that you haven’t been able to solve on your own. Remember, the worst thing you can do is nothing at all!
 

ALERT: Beware of Phishing Scam Mentioning TAS
Emails claiming to be from Taxpayer Advocate Service are bogus. Don’t click on links and please report emails to the IRS.

IRS Seeks Volunteers for Taxpayer Advocacy Panel
The IRS seeks civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP), a federal advisory committee that listens to taxpayers, identifies major taxpayer concerns, and makes recommendations for improving IRS services. Deadline is April 11.

 About TAS

 

 Get Help

   

 News and Information

 

 Connect With Us

 

 

Page Last Reviewed or Updated: 27-Mar-2014

The Irs 1040 X

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