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Tax Rates And Tables

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Tax Rates And Tables

Tax rates and tables 6. Tax rates and tables   Dual-Status Tax Year Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Tax Year Income Subject to Tax Restrictions for Dual-Status Taxpayers Exemptions How To Figure TaxIncome Tax Credits and Payments Forms To File When and Where To File Introduction You have a dual-status tax year when you have been both a resident alien and a nonresident alien in the same year. Tax rates and tables Dual status does not refer to your citizenship; it refers only to your resident status in the United States. Tax rates and tables In determining your U. Tax rates and tables S. Tax rates and tables income tax liability for a dual-status tax year, different rules apply for the part of the year you are a resident of the United States and the part of the year you are a nonresident. Tax rates and tables The most common dual-status tax years are the years of arrival and departure. Tax rates and tables See Dual-Status Aliens in chapter 1. Tax rates and tables If you are married and choose to be treated as a U. Tax rates and tables S. Tax rates and tables resident for the entire year, as explained in chapter 1, the rules of this chapter do not apply to you for that year. Tax rates and tables Topics - This chapter discusses: Income subject to tax, Restrictions for dual-status taxpayers, Exemptions, How to figure the tax, Forms to file, When and where to file, and How to fill out a dual-status return. Tax rates and tables Useful Items - You may want to see: Publication 503 Child and Dependent Care Expenses 514 Foreign Tax Credit for Individuals 575 Pension and Annuity Income Form (and Instructions) 1040 U. Tax rates and tables S. Tax rates and tables Individual Income Tax Return 1040-C U. Tax rates and tables S. Tax rates and tables Departing Alien Income Tax Return 1040-ES Estimated Tax for Individuals 1040-ES (NR) U. Tax rates and tables S. Tax rates and tables Estimated Tax for Nonresident Alien Individuals 1040NR U. Tax rates and tables S. Tax rates and tables Nonresident Alien Income Tax Return 1116 Foreign Tax Credit See chapter 12 for information about getting these publications and forms. Tax rates and tables Tax Year You must file your tax return on the basis of an annual accounting period called a tax year. Tax rates and tables If you have not previously established a fiscal tax year, your tax year is the calendar year. Tax rates and tables A calendar year is 12 consecutive months ending on December 31. Tax rates and tables If you have previously established a regular fiscal year (12 consecutive months ending on the last day of a month other than December, or a 52–53 week year) and are considered to be a U. Tax rates and tables S. Tax rates and tables resident for any calendar year, you will be treated as a U. Tax rates and tables S. Tax rates and tables resident for any part of your fiscal year that falls within that calendar year. Tax rates and tables Income Subject to Tax For the part of the year you are a resident alien, you are taxed on income from all sources. Tax rates and tables Income from sources outside the United States is taxable if you receive it while you are a resident alien. Tax rates and tables The income is taxable even if you earned it while you were a nonresident alien or if you became a nonresident alien after receiving it and before the end of the year. Tax rates and tables For the part of the year you are a nonresident alien, you are taxed on income from U. Tax rates and tables S. Tax rates and tables sources and on certain foreign source income treated as effectively connected with a U. Tax rates and tables S. Tax rates and tables trade or business. Tax rates and tables (The rules for treating foreign source income as effectively connected are discussed in chapter 4 under Foreign Income. Tax rates and tables ) Income from sources outside the United States that is not effectively connected with a trade or business in the United States is not taxable if you receive it while you are a nonresident alien. Tax rates and tables The income is not taxable even if you earned it while you were a resident alien or if you became a resident alien or a U. Tax rates and tables S. Tax rates and tables citizen after receiving it and before the end of the year. Tax rates and tables Income from U. Tax rates and tables S. Tax rates and tables sources is taxable whether you receive it while a nonresident alien or a resident alien unless specifically exempt under the Internal Revenue Code or a tax treaty provision. Tax rates and tables Generally, tax treaty provisions apply only to the part of the year you were a nonresident. Tax rates and tables In certain cases, however, treaty provisions may apply while you were a resident alien. Tax rates and tables See chapter 9 for more information. Tax rates and tables When determining what income is taxed in the United States, you must consider exemptions under U. Tax rates and tables S. Tax rates and tables tax law as well as the reduced tax rates and exemptions provided by tax treaties between the United States and certain foreign countries. Tax rates and tables For a further discussion of tax treaties, see chapter 9. Tax rates and tables Restrictions for Dual-Status Taxpayers The following restrictions apply if you are filing a tax return for a dual-status tax year. Tax rates and tables 1) Standard deduction. Tax rates and tables   You cannot use the standard deduction allowed on Form 1040. Tax rates and tables However, you can itemize any allowable deductions. Tax rates and tables 2) Exemptions. Tax rates and tables   Your total deduction for the exemptions for your spouse and allowable dependents cannot be more than your taxable income (figured without deducting personal exemptions) for the period you are a resident alien. Tax rates and tables 3) Head of household. Tax rates and tables   You cannot use the head of household Tax Table column or Tax Computation Worksheet. Tax rates and tables 4) Joint return. Tax rates and tables   You cannot file a joint return. Tax rates and tables However, see Choosing Resident Alien Status under Dual-Status Aliens in chapter 1. Tax rates and tables 5) Tax rates. Tax rates and tables   If you are married and a nonresident of the United States for all or part of the tax year and you do not choose to file jointly as discussed in chapter 1, you must use the Tax Table column or Tax Computation Worksheet for married filing separately to figure your tax on income effectively connected with a U. Tax rates and tables S. Tax rates and tables trade or business. Tax rates and tables You cannot use the Tax Table column or Tax Computation Worksheet for married filing jointly or single. Tax rates and tables However, you may be able to file as single if you lived apart from your spouse during the last 6 months of the year and you are a: Married resident of Canada, Mexico, or South Korea, or Married U. Tax rates and tables S. Tax rates and tables national. Tax rates and tables  See the instructions for Form 1040NR to see if you qualify. Tax rates and tables    A U. Tax rates and tables S. Tax rates and tables national is an individual who, although not a U. Tax rates and tables S. Tax rates and tables citizen, owes his or her allegiance to the United States. Tax rates and tables U. Tax rates and tables S. Tax rates and tables nationals include American Samoans and Northern Mariana Islanders who chose to become U. Tax rates and tables S. Tax rates and tables nationals instead of U. Tax rates and tables S. Tax rates and tables citizens. Tax rates and tables 6) Tax credits. Tax rates and tables   You cannot claim the education credits, the earned income credit, or the credit for the elderly or the disabled unless: You are married, and You choose to be treated as a resident for all of 2013 by filing a joint return with your spouse who is a U. Tax rates and tables S. Tax rates and tables citizen or resident, as discussed in chapter 1. Tax rates and tables Exemptions As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Tax rates and tables Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Tax rates and tables The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Tax rates and tables You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Tax rates and tables Special rules apply to exemptions for the part of the tax year you are a nonresident alien if you are a: Resident of Canada, Mexico, or South Korea, U. Tax rates and tables S. Tax rates and tables national, or Student or business apprentice from India. Tax rates and tables For more information, see Exemptions in chapter 5. Tax rates and tables How To Figure Tax When you figure your U. Tax rates and tables S. Tax rates and tables tax for a dual-status year, you are subject to different rules for the part of the year you are a resident and the part of the year you are a nonresident. Tax rates and tables Income All income for your period of residence and all income that is effectively connected with a trade or business in the United States for your period of nonresidence, after allowable deductions, is added and taxed at the rates that apply to U. Tax rates and tables S. Tax rates and tables citizens and residents. Tax rates and tables Income that is not connected with a trade or business in the United States for your period of nonresidence is subject to the flat 30% rate or lower treaty rate. Tax rates and tables You cannot take any deductions against this income. Tax rates and tables Social security and railroad retirement benefits. Tax rates and tables   During the part of the year you are a nonresident alien, 85% of any U. Tax rates and tables S. Tax rates and tables social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Tax rates and tables (See The 30% Tax in chapter 4. Tax rates and tables )   During the part of the year you are a resident alien, part of the social security and the equivalent portion of tier 1 railroad retirement benefits will be taxed at graduated rates if your modified adjusted gross income plus half of these benefits is more than a certain base amount. Tax rates and tables Use the Social Security Benefits Worksheet in the Form 1040 instructions to help you figure the taxable part of your social security and equivalent tier 1 railroad retirement benefits for the part of the year you were a resident alien. Tax rates and tables If you received U. Tax rates and tables S. Tax rates and tables social security benefits while you were a nonresident alien, the Social Security Administration will send you Form SSA-1042S showing your combined benefits for the entire year and the amount of tax withheld. Tax rates and tables You will not receive separate statements for the benefits received during your periods of U. Tax rates and tables S. Tax rates and tables residence and nonresidence. Tax rates and tables Therefore, it is important for you to keep careful records of these amounts. Tax rates and tables You will need this information to properly complete your return and determine your tax liability. Tax rates and tables If you received railroad retirement benefits while you were a nonresident alien, the U. Tax rates and tables S. Tax rates and tables Railroad Retirement Board (RRB) will send you Form RRB-1042S, Statement for Nonresident Alien Recipients of Payments by the Railroad Retirement Board, and/or Form RRB-1099-R, Annuities or Pensions by the Railroad Retirement Board. Tax rates and tables If your country of legal residence changed or your rate of tax changed during the tax year, you may receive more than one form. Tax rates and tables Tax Credits and Payments This discussion covers tax credits and payments for dual-status aliens. Tax rates and tables Credits As a dual-status alien, you generally can claim tax credits using the same rules that apply to resident aliens. Tax rates and tables There are certain restrictions that may apply. Tax rates and tables These restrictions are discussed here, along with a brief explanation of credits often claimed by individuals. Tax rates and tables Foreign tax credit. Tax rates and tables   If you have paid or are liable for the payment of income tax to a foreign country on income from foreign sources, you may be able to claim a credit for the foreign taxes. Tax rates and tables   If you claim the foreign tax credit, you generally must file Form 1116 with your income tax return. Tax rates and tables For more information, see the Instructions for Form 1116 and Publication 514. Tax rates and tables Child and dependent care credit. Tax rates and tables   You may qualify for this credit if you pay someone to care for your qualifying child who is under age 13, or your disabled dependent or disabled spouse so that you can work or look for work. Tax rates and tables Generally, you must be able to claim an exemption for your dependent. Tax rates and tables   Married dual-status aliens can claim the credit only if they choose to file a joint return as discussed in chapter 1, or if they qualify as certain married individuals living apart. Tax rates and tables   The amount of your child and dependent care expense that qualifies for the credit in any tax year cannot be more than your earned income for that tax year. Tax rates and tables   For more information, get Publication 503 and Form 2441. Tax rates and tables Retirement savings contributions credit. Tax rates and tables   You may qualify for this credit (also known as the saver's credit) if you made eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement (IRA) in 2013. Tax rates and tables You cannot claim this credit if: You were born after January 1, 1996, You were a full-time student, Your exemption is claimed by someone else on his or her 2013 tax return, or Your adjusted gross income is more than $29,500. Tax rates and tables Use Form 8880 to figure the credit. Tax rates and tables For more information, see Publication 590. Tax rates and tables Child tax credit. Tax rates and tables   You may be able to take this credit if you have a qualifying child. Tax rates and tables   A qualifying child for purposes of the child tax credit is a child who: Was under age 17 at the end of 2013. Tax rates and tables Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew). Tax rates and tables Is a U. Tax rates and tables S. Tax rates and tables citizen, a U. Tax rates and tables S. Tax rates and tables national, or a resident alien. Tax rates and tables Did not provide over half of his or her own support for 2013. Tax rates and tables Lived with you more than half of 2013. Tax rates and tables Temporary absences, such as for school, vacation, or medical care, count as time lived in the home. Tax rates and tables Is claimed as a dependent on your return. Tax rates and tables An adopted child is always treated as your own child. Tax rates and tables An adopted child includes a child lawfully placed with you for legal adoption. Tax rates and tables   See your form instructions for additional details. Tax rates and tables Adoption credit. Tax rates and tables   You may qualify to take a tax credit of up to $12,970 for qualifying expenses paid to adopt an eligible child. Tax rates and tables This amount may be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. Tax rates and tables To claim the adoption credit, file Form 8839 with the U. Tax rates and tables S. Tax rates and tables income tax return that you file. Tax rates and tables   Married dual-status aliens can claim the credit only if they choose to file a joint return with a U. Tax rates and tables S. Tax rates and tables citizen or resident spouse as discussed in chapter 1, or if they qualify as certain married individuals living apart (see Married Persons Not Filing Jointly in the Form 8839 instructions). Tax rates and tables Payments You can report as payments against your U. Tax rates and tables S. Tax rates and tables income tax liability certain taxes you paid, are considered to have paid, or that were withheld from your income. Tax rates and tables These include: Tax withheld from wages earned in the United States, Taxes withheld at the source from various items of income from U. Tax rates and tables S. Tax rates and tables sources other than wages, Estimated tax paid with Form 1040-ES or Form 1040-ES (NR), and Tax paid with Form 1040-C, at the time of departure from the United States. Tax rates and tables Forms To File The U. Tax rates and tables S. Tax rates and tables income tax return you must file as a dual-status alien depends on whether you are a resident alien or a nonresident alien at the end of the tax year. Tax rates and tables Resident at end of year. Tax rates and tables   You must file Form 1040 if you are a dual-status taxpayer who becomes a resident during the year and who is a U. Tax rates and tables S. Tax rates and tables resident on the last day of the tax year. Tax rates and tables Write “Dual-Status Return” across the top of the return. Tax rates and tables Attach a statement to your return to show the income for the part of the year you are a nonresident. Tax rates and tables You can use Form 1040NR or Form 1040NR-EZ as the statement, but be sure to mark “Dual-Status Statement” across the top. Tax rates and tables Nonresident at end of year. Tax rates and tables   You must file Form 1040NR or Form 1040NR-EZ if you are a dual-status taxpayer who gives up residence in the United States during the year and who is not a U. Tax rates and tables S. Tax rates and tables resident on the last day of the tax year. Tax rates and tables Write “Dual-Status Return” across the top of the return. Tax rates and tables Attach a statement to your return to show the income for the part of the year you are a resident. Tax rates and tables You can use Form 1040 as the statement, but be sure to mark “Dual-Status Statement” across the top. Tax rates and tables   If you expatriated or terminated your residency in 2013, you may be required to file an expatriation statement (Form 8854) with your tax return. Tax rates and tables For more information, see Expatriation Tax in chapter 4. Tax rates and tables Statement. Tax rates and tables   Any statement must have your name, address, and taxpayer identification number on it. Tax rates and tables You do not need to sign a separate statement or schedule accompanying your return, because your signature on the return also applies to the supporting statements and schedules. Tax rates and tables When and Where To File If you are a resident alien on the last day of your tax year and report your income on a calendar year basis, you must file no later than April 15 of the year following the close of your tax year. Tax rates and tables If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 4th month following the close of your tax year. Tax rates and tables In either case, file your return with the address for dual-status aliens shown on the back page of the Form 1040 instructions. Tax rates and tables If you are a nonresident alien on the last day of your tax year and you report your income on a calendar year basis, you must file no later than April 15 of the year following the close of your tax year if you receive wages subject to withholding. Tax rates and tables If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 4th month following the close of your tax year. Tax rates and tables If you did not receive wages subject to withholding and you report your income on a calendar year basis, you must file no later than June 15 of the year following the close of your tax year. Tax rates and tables If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 6th month following the close of your tax year. Tax rates and tables In any case, mail your return to:  Department of the Treasury Internal Revenue Service  Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. Tax rates and tables O. Tax rates and tables Box 1303 Charlotte, NC 28201-1303 If the regular due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day that is not a Saturday, Sunday, or legal holiday. Tax rates and tables Prev  Up  Next   Home   More Online Publications
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Real Time Tax Initiative

The Internal Revenue Service held two public meetings, in December 2011 and January 2012, to gather feedback on a potential new structure that would fundamentally change the way taxpayers and tax practitioners prepare and file individual tax returns and that leverages technological innovations.

In an April 2011 speech before the National Press Club, IRS Commissioner Douglas H. Shulman described a vision in which the IRS would move away from the traditional "look back" model of compliance to a "real time" tax process.

Under this vision, the IRS could embed more information return data into its pre-screening filters, and could provide the opportunity for taxpayers to fix the return before it accepts it - if the return contains data that does not match the IRS' records.

The goals of this long-term initiative are to reduce burden for taxpayers and improve overall service and compliance.

The public meetings featured representatives of consumer groups, the tax professional community, government, the employer and payroll community, the software industry and financial industry.  

Real Time Tax System Initiative Power Point

December 8, 2011 Meeting


January 25, 2012 Meeting

Page Last Reviewed or Updated: 27-Feb-2014

The Tax Rates And Tables

Tax rates and tables 14. Tax rates and tables   Excise Taxes Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Fuels Used in FarmingBuyer of fuel, including undyed diesel fuel or undyed kerosene. Tax rates and tables Undyed diesel fuel, undyed kerosene, and Other Fuels (including alternative fuel). Tax rates and tables Custom application of fertilizer and pesticide. Tax rates and tables Fuel not used for farming. Tax rates and tables Dyed Diesel Fuel and Dyed Kerosene Fuels Used in Off-Highway Business Use Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines How To Claim a Credit or RefundCredit only. Tax rates and tables Claiming a Credit Claiming a Refund Including the Credit or Refund in Income Introduction You may be eligible to claim a credit on your income tax return for the federal excise tax on certain fuels. Tax rates and tables You may also be eligible to claim a quarterly refund of the fuel taxes during the year, instead of waiting to claim a credit on your income tax return. Tax rates and tables Whether you can claim a credit or refund depends on whether the fuel was taxed and the purpose (nontaxable use) for which you used the fuel. Tax rates and tables The nontaxable uses of fuel for which a farmer may claim a credit or refund are generally the following. Tax rates and tables Use on a farm for farming purposes. Tax rates and tables Off-highway business use. Tax rates and tables Uses other than as a fuel in a propulsion engine, such as home use. Tax rates and tables Table 14-1 presents an overview of credits and refunds that may be claimed for fuels used for the nontaxable uses listed above. Tax rates and tables See Publication 510, Excise Taxes, for more information. Tax rates and tables Topics - This chapter discusses: Fuels used in farming Dyed diesel fuel and dyed kerosene Fuels used in off-highway business use Fuels used for household purposes How to claim a credit or refund Including the credit or refund in income Useful Items - You may want to see: Publication 510 Excise Taxes Form (and Instructions) 720 Quarterly Federal Excise Tax Return 4136 Credit for Federal Tax Paid on Fuels 8849 Claim for Refund of Excise Taxes See chapter 16 for information about getting publications and forms. Tax rates and tables Fuels Used in Farming Owners, operators, and tenants of farms and certain other persons may be eligible to claim a credit or refund of excise taxes on fuel used in the trade or business of farming, when used on a farm in the United States for farming purposes. Tax rates and tables See Table 14-1 for a list of available fuel tax credits and refunds. Tax rates and tables Fuel is used on a farm for farming purposes only if used in carrying on a trade or business of farming, on a farm in the United States, and for farming purposes. Tax rates and tables Farm. Tax rates and tables   A farm includes livestock, dairy, fish, poultry, fruit, fur-bearing animals, and truck farms, orchards, plantations, ranches, nurseries, ranges, and feed yards for finishing cattle. Tax rates and tables It also includes structures such as greenhouses used primarily for raising agricultural or horticultural commodities. Tax rates and tables A fish farm is an area where fish are grown or raised and not merely caught or harvested. Tax rates and tables Table 14-1. Tax rates and tables Fuel Tax Credits and Refunds at a Glance Use this table to see if you can take a credit or refund for a nontaxable use of the fuel listed. Tax rates and tables Fuel Used On a Farm for Farming Purposes Off-Highway Business Use Household Use or Use Other Than as a Fuel1 Gasoline Credit only Credit or refund None Aviation gasoline Credit only None None Undyed diesel fuel and undyed kerosene Credit or refund Credit or refund2 Credit or refund2 Kerosene for use in aviation Credit or refund None None Dyed diesel fuel and dyed kerosene None None None Other Fuels (including alternative fuels)3 Credit or refund Credit or refund None 1For a use other than as fuel in a propulsion engine. Tax rates and tables 2Applies to undyed kerosene not sold from a blocked pump or, under certain circumstances, for blending with undyed diesel fuel to be used for heating purposes. Tax rates and tables See Reg. Tax rates and tables 48. Tax rates and tables 6427-10 (b)(1) for the definition of a blocked pump. Tax rates and tables 3Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under Internal Revenue Code section 4081. Tax rates and tables It includes the alternative fuels: liquefied petroleum gas (LPG),“P” Series fuels, compressed natural gas (CNG), liquefied hydrogen, any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, liquid fuel derived from biomass, liquid natural gas (LNG), liquefied gas derived from biomass, and compressed gas derived from biomass. Tax rates and tables Farming purposes. Tax rates and tables   As the owner, tenant, or operator and the ultimate purchaser of fuel that you purchased, you use the fuel on a farm for farming purposes if you use it in any of the following ways. Tax rates and tables To cultivate the soil or to raise or harvest any agricultural or horticultural commodity. Tax rates and tables To raise, shear, feed, care for, train, or manage livestock, bees, poultry, fur-bearing animals, or wildlife. Tax rates and tables To operate, manage, conserve, improve, or maintain your farm and its tools and equipment. Tax rates and tables To handle, dry, pack, grade, or store any raw agricultural or horticultural commodity. Tax rates and tables For this use to qualify, you must have produced more than half the commodity so treated during the tax year. Tax rates and tables The more-than-one-half test applies separately to each commodity. Tax rates and tables Commodity means a single raw product. Tax rates and tables For example, apples and peaches are two separate commodities. Tax rates and tables To plant, cultivate, care for, or cut trees or to prepare (other than sawing logs into lumber, chipping, or other milling) trees for market, but only if these activities are incidental to your farming operations. Tax rates and tables Your tree operations are incidental only if they are minor in nature when compared to the total farming operations. Tax rates and tables   If any other person, such as a neighbor or custom operator (independent contractor), performs a service for you on your farm for any of the purposes included in list items (1) or (2), above, you are considered to be the ultimate purchaser who used the fuel on a farm for farming purposes. Tax rates and tables Therefore, you can still claim the credit or refund for the fuel so used. Tax rates and tables However, see Custom application of fertilizer and pesticide, later. Tax rates and tables If the other person performs any other services for you on your farm for purposes not included in list items (1) or (2) above, no one can claim the credit or refund for fuel used on your farm for those other services. Tax rates and tables Buyer of fuel, including undyed diesel fuel or undyed kerosene. Tax rates and tables   If doubt exists whether the owner, tenant, or operator of the farm bought the fuel, determine who actually bore the cost of the fuel. Tax rates and tables For example, if the owner of a farm and his or her tenant equally share the cost of gasoline used on the farm, each can claim a credit for the tax on half the fuel used. Tax rates and tables Undyed diesel fuel, undyed kerosene, and Other Fuels (including alternative fuel). Tax rates and tables   Usually, the farmer is the only person who can make a claim for credit or refund for the tax on undyed diesel fuel, undyed kerosene, or other fuels (including alternative fuel) used for farming purposes. Tax rates and tables However, see Custom application of fertilizer and pesticide, next. Tax rates and tables Also see Dyed Diesel Fuel and Dyed Kerosene, later. Tax rates and tables Example. Tax rates and tables Farm owner Haleigh Blue hired custom operator Tyler Steele to cultivate the soil on her farm. Tax rates and tables Tyler used 200 gallons of undyed diesel fuel that he purchased to perform the work on Haleigh's farm. Tax rates and tables In addition, Haleigh hired contractor Lee Brown to pack and store her apple crop. Tax rates and tables Lee bought 25 gallons of undyed diesel fuel to use in packing the apples. Tax rates and tables Haleigh can claim the credit for the 200 gallons of undyed diesel fuel used by Tyler on her farm because it qualifies as fuel used on the farm for farming purposes. Tax rates and tables No one can claim a credit for the 25 gallons used by Lee because that fuel was not used for a farming purpose included in list items (1) or (2), above. Tax rates and tables In the above example, both Tyler Steele and Lee Brown could have purchased dyed (untaxed) diesel fuel for their tasks. Tax rates and tables Custom application of fertilizer and pesticide. Tax rates and tables   Fuel used on a farm for farming purposes includes fuel used in the application (including aerial application) of fertilizer, pesticides, or other substances. Tax rates and tables Generally, the applicator is treated as having used the fuel on a farm for farming purposes. Tax rates and tables For applicators using highway vehicles, only the fuel used on the farm is exempt. Tax rates and tables Fuel used traveling on the highway to and from the farm is taxable. Tax rates and tables Fuel used by an aerial applicator for the direct flight between the airfield and one or more farms is treated as used for a farming purpose. Tax rates and tables For aviation gasoline, the aerial applicator makes the claim as the ultimate purchaser. Tax rates and tables For kerosene used in aviation, the ultimate purchaser may make the claim or waive the right to make the claim to the registered ultimate vendor. Tax rates and tables A sample waiver is included as Model Waiver L in the appendix of Publication 510. Tax rates and tables A registered ultimate vendor is the person who sells undyed diesel fuel, undyed kerosene, or kerosene for use in aviation to the user (ultimate purchaser) of the fuel for use on a farm for farming purposes. Tax rates and tables To claim a credit or refund of tax, the ultimate vendor must be registered with the Internal Revenue Service at the time the claim is made. Tax rates and tables However, registered ultimate vendors cannot make claims for undyed diesel fuel and undyed kerosene sold for use on a farm for farming purposes. Tax rates and tables Fuel not used for farming. Tax rates and tables   You do not use fuel on a farm for farming purposes when you use it in any of the following ways. Tax rates and tables Off the farm, such as on the highway or in noncommercial aviation, even if the fuel is used in transporting livestock, feed, crops, or equipment. Tax rates and tables For personal use, such as lawn mowing. Tax rates and tables In processing, packaging, freezing, or canning operations. Tax rates and tables In processing crude gum into gum spirits of turpentine or gum resin or in processing maple sap into maple syrup or maple sugar. Tax rates and tables All-terrain vehicles (ATVs). Tax rates and tables   Fuel used in ATVs on a farm for farming purposes, discussed earlier, is eligible for a credit or refund of excise taxes on the fuel. Tax rates and tables Fuel used in ATVs for nonfarming purposes is not eligible for a credit or refund of the taxes. Tax rates and tables If ATVs are used both for farming and nonfarming purposes, only that portion of the fuel used for farming purposes is eligible for the credit or refund. Tax rates and tables Dyed Diesel Fuel and Dyed Kerosene If you purchase dyed diesel fuel or dyed kerosene for a nontaxable use, you must use it only on a farm for farming purposes or for other nontaxable purposes. Tax rates and tables For example, you should not use dyed diesel fuel in a truck that is used both on the farm for farming purposes and on the highway, even though the highway use is in connection with farm business. Tax rates and tables Excise tax applies to the fuel used by the truck on the highways. Tax rates and tables In this situation, undyed (taxed) fuel should be purchased for the truck. Tax rates and tables You should keep fuel records of the use of the truck on the farm for farming purposes, and for other uses. Tax rates and tables You may be eligible for a credit or refund for the excise tax on fuel used on the farm for farming purposes. Tax rates and tables Penalty. Tax rates and tables   A penalty is imposed on any person who knowingly uses, sells, or alters dyed diesel fuel or dyed kerosene for any purpose other than a nontaxable use. Tax rates and tables The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. Tax rates and tables After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. Tax rates and tables For more information on this penalty, see Publication 510. Tax rates and tables Fuels Used in Off-Highway Business Use You may be eligible to claim a credit or refund for the excise tax on fuel used in an off-highway business use. Tax rates and tables Off-highway business use. Tax rates and tables   This is any use of fuel in a trade or business or in an income-producing activity. Tax rates and tables The use must not be in a highway vehicle registered or required to be registered for use on public highways. Tax rates and tables Off-highway business use generally does not include any use in a recreational motorboat. Tax rates and tables Examples. Tax rates and tables   Off-highway business use includes the use of fuels in a trade or business in any of the following ways. Tax rates and tables In stationary machines such as generators, compressors, power saws, and similar equipment; For cleaning ; and In forklift trucks, bulldozers, and earthmovers. Tax rates and tables   Off-highway nonbusiness (taxable) use of fuel includes: use in minibikes, snowmobiles, power lawn mowers, chain saws, and other yard equipment. Tax rates and tables For more information, see Publication 510. Tax rates and tables Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines You may be eligible to claim a credit or refund for the excise tax on undyed diesel fuel or kerosene used for home heating, lighting, and cooking. Tax rates and tables This also applies to diesel fuel and kerosene used in a home generator to produce electricity for home use. Tax rates and tables Home use of a fuel does not include use in a propulsion engine and it is not considered an off-highway business use. Tax rates and tables How To Claim a Credit or Refund You may be able to claim a credit or refund of the excise tax on fuels you use for nontaxable uses. Tax rates and tables The basic rules for claiming credits and refunds are listed in Table 14-2 . Tax rates and tables Table 14-2. Tax rates and tables Claiming a Credit or Refund of Excise Taxes This table gives the basic rules for claiming a credit or refund of excise taxes on fuels used for a nontaxable use. Tax rates and tables   Credit Refund Which form to use Form 4136, Credit for Federal Tax Paid on Fuels Form 8849, Claim for Refund of Excise Taxes, and Schedule 1 (Form 8849), Nontaxable Use of Fuels Type of form Annual Quarterly When to file With your income tax return By the last day of the quarter following the last quarter included in the claim Amount of tax Any amount $750 or more1 1You may carry over an amount less than $750 to the next quarter. Tax rates and tables Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. Tax rates and tables You do not have to use any special form, but the records should establish the following information. Tax rates and tables The total number of gallons bought and used during the period covered by your claim. Tax rates and tables The dates of the purchases. Tax rates and tables The names and addresses of suppliers and amounts bought from each during the period covered by your claim. Tax rates and tables The nontaxable use for which you used the fuel. Tax rates and tables The number of gallons used for each nontaxable use. Tax rates and tables It is important that your records separately show the number of gallons used for each nontaxable use that qualifies as a claim. Tax rates and tables For more information about recordkeeping, see Publication 583, Starting a Business and Keeping Records. Tax rates and tables Credit or refund. Tax rates and tables   A credit is an amount that reduces the tax on your income tax return when you file it at the end of the year. Tax rates and tables If you meet certain requirements, you may claim a refund during the year instead of waiting until you file your income tax return. Tax rates and tables Credit only. Tax rates and tables   You can claim the following taxes only as a credit on your income tax return. Tax rates and tables Tax on gasoline and aviation gasoline you used on a farm for farming purposes. Tax rates and tables Tax on fuels (including undyed diesel fuel or undyed kerosene) you used for nontaxable uses if the total for the tax year is less than $750. Tax rates and tables Tax on fuel you did not include in any claim for refund previously filed for any quarter of the tax year. Tax rates and tables Claiming a Credit You make a claim for a fuel tax credit on Form 4136 and attach it to your income tax return. Tax rates and tables Do not claim a credit for any excise tax for which you have filed a refund claim. Tax rates and tables How to claim a credit. Tax rates and tables   How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, trust, or farmers' cooperative association. Tax rates and tables Individuals. Tax rates and tables   You claim the credit on the “Credit for federal tax on fuels” line of your Form 1040. Tax rates and tables If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit. Tax rates and tables Partnership. Tax rates and tables   Partnerships (other than electing large partnerships) claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Tax rates and tables , showing each partner's share of the number of gallons of each fuel sold or used for a nontaxable use, the type of use, and the applicable credit per gallon. Tax rates and tables Each partner claims the credit on his or her income tax return for the partner's share of the fuel used by the partnership. Tax rates and tables An electing large partnership can claim the credit on the “Other payments” line of Form 1065-B, U. Tax rates and tables S. Tax rates and tables Return of Income for Electing Large Partnerships. Tax rates and tables Other entities. Tax rates and tables   Corporations, S corporations, farmers' cooperative associations, and trusts make the claim on the appropriate line of their income tax return. Tax rates and tables When to claim a credit. Tax rates and tables   You can claim a fuel tax credit on your income tax return for the year you used the fuel. Tax rates and tables You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. Tax rates and tables A claim for credit or refund of an overpayment must generally be filed within the later of: Three years from the date the original return was filed, or Two years from the date the tax was paid. Tax rates and tables Claiming a Refund Generally, you may claim a refund of excise taxes on Form 8849. Tax rates and tables Complete and attach to Form 8849 the appropriate Form 8849 schedule(s). Tax rates and tables The instructions for Form 8849 and the separate instructions for each schedule explain the requirements for making a claim for refund. Tax rates and tables If you file Form 720, you can use its Schedule C for your refund claims for the quarter. Tax rates and tables See the Instructions for Form 720. Tax rates and tables Do not claim a refund on Form 8849 for any amount for which you have filed or will file a claim on Form 720 or Form 4136. Tax rates and tables You may file a claim for refund for any quarter of your tax year for which you can claim $750 or more. Tax rates and tables This amount is the excise tax on all fuels used for a nontaxable use during that quarter or any prior quarter (for which no other claim has been filed) during the tax year. Tax rates and tables If you cannot claim at least $750 at the end of a quarter, you carry the amount over to the next quarter of your tax year to determine if you can claim at least $750 for that quarter. Tax rates and tables If you cannot claim at least $750 at the end of the fourth quarter of your tax year, you must claim a credit on your income tax return using Form 4136. Tax rates and tables Only one claim can be filed for a quarter. Tax rates and tables You cannot claim a refund for excise tax on gasoline and aviation gasoline used on a farm for farming purposes. Tax rates and tables You must claim a credit on your income tax return for the tax. Tax rates and tables How to file a quarterly claim. Tax rates and tables   File the claim for refund by filling out Schedule 1 (Form 8849) and attaching it to Form 8849. Tax rates and tables Send it to the address shown in the instructions. Tax rates and tables If you file Form 720, you can use its Schedule C for your refund claims. Tax rates and tables See the Instructions for Form 720. Tax rates and tables When to file a quarterly claim. Tax rates and tables   You must file a quarterly claim by the last day of the first quarter following the last quarter included in the claim. Tax rates and tables If you do not file a timely refund claim for the fourth quarter of your tax year, you will have to claim a credit for that amount on your income tax return, as discussed earlier. Tax rates and tables    In most situations, the amount claimed as a credit or refund will be less than the amount deducted as fuel tax expense because the Leaking Underground Storage Tank (LUST) tax of $0. Tax rates and tables 001 per gallon is generally not subject to credit or refund. Tax rates and tables Including the Credit or Refund in Income Include any credit or refund of excise taxes on fuels in your gross income if you claimed the total cost of the fuel (including the excise taxes) as an expense deduction that reduced your income tax liability. Tax rates and tables Which year you include a credit or refund in gross income depends on whether you use the cash or an accrual method of accounting. Tax rates and tables Cash method. Tax rates and tables   If you use the cash method and file a claim for refund, include the refund amount in gross income for the tax year in which you receive the refund. Tax rates and tables If you claim a credit on your income tax return, include the credit amount in gross income for the tax year in which you file Form 4136. Tax rates and tables If you file an amended return and claim a credit, include the credit amount in gross income for the tax year in which you receive the credit. Tax rates and tables Example. Tax rates and tables Sharon Brown, a farmer who uses the cash method, filed her 2012 Form 1040 on March 3, 2013. Tax rates and tables On her Schedule F, she deducted the total cost of gasoline (including $110 of excise taxes) used on the farm for farming purposes. Tax rates and tables Then, on Form 4136, she claimed the $110 as a credit. Tax rates and tables Sharon reports the $110 as other income on line 8b of her 2013 Schedule F. Tax rates and tables Accrual method. Tax rates and tables   If you use an accrual method, include the amount of credit or refund in gross income for the tax year in which you used the fuels. Tax rates and tables It does not matter whether you filed for a quarterly refund or claimed the entire amount as a credit. Tax rates and tables Example. Tax rates and tables Patty Green, a farmer who uses the accrual method, files her 2012 Form 1040 on April 15, 2013. Tax rates and tables On Schedule F, she deducts the total cost of gasoline (including $155 of excise taxes) she used on the farm for farming purposes during 2012. Tax rates and tables On Form 4136, Patty claims the $155 as a credit. Tax rates and tables She reports the $155 as other income on line 8b of her 2012 Schedule F. Tax rates and tables Prev  Up  Next   Home   More Online Publications