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Tax Return Amendment

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Tax Return Amendment

Tax return amendment 1. Tax return amendment   403(b) Plan Basics Table of Contents What Is a 403(b) Plan? What Are the Benefits of Contributing to a 403(b) Plan?Excluded. Tax return amendment Deducted. Tax return amendment Who Can Participate in a 403(b) Plan?Ministers. Tax return amendment Who Can Set Up a 403(b) Account? How Can Contributions Be Made to My 403(b) Account? Do I Report Contributions on My Tax Return? How Much Can Be Contributed to My 403(b) Account? This chapter introduces you to 403(b) plans and accounts. Tax return amendment Specifically, the chapter answers the following questions. Tax return amendment What is a 403(b) plan? What are the benefits of contributing to a 403(b) plan? Who can participate in a 403(b) plan? Who can set up a 403(b) account? How can contributions be made to my 403(b) account? Do I report contributions on my tax return? How much can be contributed to my 403(b) account? What Is a 403(b) Plan? A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers. Tax return amendment Individual accounts in a 403(b) plan can be any of the following types. Tax return amendment An annuity contract, which is a contract provided through an insurance company, A custodial account, which is an account invested in mutual funds, or A retirement income account set up for church employees. Tax return amendment Generally, retirement income accounts can invest in either annuities or mutual funds. Tax return amendment We use the term “403(b) account” to refer to any one of these funding arrangements throughout this publication, unless otherwise specified. Tax return amendment What Are the Benefits of Contributing to a 403(b) Plan?  There are three benefits to contributing to a 403(b) plan. Tax return amendment The first benefit is that you do not pay income tax on allowable contributions until you begin making withdrawals from the plan, usually after you retire. Tax return amendment Allowable contributions to a 403(b) plan are either excluded or deducted from your income. Tax return amendment However, if your contributions are made to a Roth contribution program, this benefit does not apply. Tax return amendment Instead, you pay income tax on the contributions to the plan but distributions from the plan (if certain requirements are met) are tax free. Tax return amendment Note. Tax return amendment Generally, employees must pay social security and Medicare tax on their contributions to a 403(b) plan, including those made under a salary reduction agreement. Tax return amendment See chapter 4, Limit on Elective Deferrals , for more information. Tax return amendment The second benefit is that earnings and gains on amounts in your 403(b) account are not taxed until you withdraw them. Tax return amendment Earnings and gains on amounts in a Roth contribution program are not taxed if your withdrawals are qualified distributions. Tax return amendment Otherwise, they are taxed when you withdraw them. Tax return amendment The third benefit is that you may be eligible to take a credit for elective deferrals contributed to your 403(b) account. Tax return amendment See chapter 10, Retirement Savings Contributions Credit (Saver's Credit) . Tax return amendment Excluded. Tax return amendment   If an amount is excluded from your income, it is not included in your total wages on your Form W-2. Tax return amendment This means that you do not report the excluded amount on your tax return. Tax return amendment Deducted. Tax return amendment   If an amount is deducted from your income, it is included with your other wages on your Form W-2. Tax return amendment You report this amount on your tax return, but you are allowed to subtract it when figuring the amount of income on which you must pay tax. Tax return amendment Who Can Participate in a 403(b) Plan? Any eligible employee can participate in a 403(b) plan. Tax return amendment Eligible employees. Tax return amendment   The following employees are eligible to participate in a 403(b) plan. Tax return amendment Employees of tax-exempt organizations established under section 501(c)(3). Tax return amendment These organizations are usually referred to as section 501(c)(3) organizations or simply 501(c)(3) organizations. Tax return amendment Employees of public school systems who are involved in the day-to-day operations of a school. Tax return amendment Employees of cooperative hospital service organizations. Tax return amendment Civilian faculty and staff of the Uniformed Services University of the Health Sciences. Tax return amendment Employees of public school systems organized by Indian tribal governments. Tax return amendment Certain ministers (explained next). Tax return amendment Ministers. Tax return amendment   The following ministers are eligible employees for whom a 403(b) account can be established. Tax return amendment Ministers employed by section 501(c)(3) organizations. Tax return amendment Self-employed ministers. Tax return amendment A self-employed minister is treated as employed by a tax-exempt organization that is a qualified employer. Tax return amendment Ministers (chaplains) who meet both of the following requirements. Tax return amendment They are employed by organizations that are not section 501(c)(3) organizations. Tax return amendment They function as ministers in their day-to-day professional responsibilities with their employers. Tax return amendment   Throughout this publication, the term chaplain will be used to mean ministers described in the third category in the list above. Tax return amendment Example. Tax return amendment A minister employed as a chaplain by a state-run prison and a chaplain in the United States Armed Forces are eligible employees because their employers are not section 501(c)(3) organizations and they are employed as ministers. Tax return amendment Who Can Set Up a 403(b) Account? You cannot set up your own 403(b) account. Tax return amendment Only employers can set up 403(b) accounts. Tax return amendment A self-employed minister cannot set up a 403(b) account for his or her benefit. Tax return amendment If you are a self-employed minister, only the organization (denomination) with which you are associated can set up an account for your benefit. Tax return amendment How Can Contributions Be Made to My 403(b) Account? Generally, only your employer can make contributions to your 403(b) account. Tax return amendment However, some plans will allow you to make after-tax contributions (defined below). Tax return amendment The following types of contributions can be made to 403(b) accounts. Tax return amendment Elective deferrals . Tax return amendment These are contributions made under a salary reduction agreement. Tax return amendment This agreement allows your employer to withhold money from your paycheck to be contributed directly into a 403(b) account for your benefit. Tax return amendment Except for Roth contributions, you do not pay income tax on these contributions until you withdraw them from the account. Tax return amendment If your contributions are Roth contributions, you pay taxes on your contributions but any qualified distributions from your Roth account are tax free. Tax return amendment Nonelective contributions . Tax return amendment These are employer contributions that are not made under a salary reduction agreement. Tax return amendment Nonelective contributions include matching contributions, discretionary contributions, and mandatory contributions from your employer. Tax return amendment You do not pay income tax on these contributions until you withdraw them from the account. Tax return amendment After-tax contributions . Tax return amendment These are contributions (that are not Roth contributions) you make with funds that you must include in income on your tax return. Tax return amendment A salary payment on which income tax has been withheld is a source of these contributions. Tax return amendment If your plan allows you to make after-tax contributions, they are not excluded from income and you cannot deduct them on your tax return. Tax return amendment A combination of any of the three contribution types listed above. Tax return amendment Self-employed minister. Tax return amendment   If you are a self-employed minister, you are considered both an employee and an employer, and you can contribute to a retirement income account for your own benefit. Tax return amendment Do I Report Contributions on My Tax Return? Generally, you do not report contributions to your 403(b) account (except Roth contributions) on your tax return. Tax return amendment Your employer will report contributions on your 2013 Form W-2. Tax return amendment Elective deferrals will be shown in box 12 and the Retirement plan box will be checked in box 13. Tax return amendment If you are a self-employed minister or chaplain, see the discussions next. Tax return amendment Self-employed ministers. Tax return amendment   If you are a self-employed minister, you must report the total contributions as a deduction on your tax return. Tax return amendment Deduct your contributions on line 28 of the 2013 Form 1040. Tax return amendment Chaplains. Tax return amendment   If you are a chaplain and your employer does not exclude contributions made to your 403(b) account from your earned income, you may be able to take a deduction for those contributions on your tax return. Tax return amendment    However, if your employer has agreed to exclude the contributions from your earned income, you will not be allowed a deduction on your tax return. Tax return amendment   If you can take a deduction, include your contributions on line 36 of the 2013 Form 1040. Tax return amendment Enter the amount of your deduction and write “403(b)” on the dotted line next to line 36. Tax return amendment How Much Can Be Contributed to My 403(b) Account? There are limits on the amount of contributions that can be made to your 403(b) account each year. Tax return amendment If contributions made to your 403(b) account are more than these contribution limits, penalties may apply. Tax return amendment Chapters 2 through 6 provide information on how to determine the amount that can be contributed to your 403(b) account. Tax return amendment Worksheets are provided in Chapter 9 to help you determine the maximum amount that can be contributed to your 403(b) account each year. Tax return amendment Chapter 7, Excess Contributions , describes how to prevent excess contributions and how to get an excess contribution corrected. Tax return amendment Prev  Up  Next   Home   More Online Publications
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The Tax Return Amendment

Tax return amendment 36. Tax return amendment   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. Tax return amendment Rules for EveryoneRule 1. Tax return amendment Your AGI Must Be Less Than: Rule 2. Tax return amendment You Must Have a Valid Social Security Number (SSN) Rule 3. Tax return amendment Your Filing Status Cannot Be Married Filing Separately Rule 4. Tax return amendment You Must Be a U. Tax return amendment S. Tax return amendment Citizen or Resident Alien All Year Rule 5. Tax return amendment You Cannot File Form 2555 or Form 2555-EZ Rule 6. Tax return amendment Your Investment Income Must Be $3,300 or Less Rule 7. Tax return amendment You Must Have Earned Income Part B. Tax return amendment Rules If You Have a Qualifying ChildRule 8. Tax return amendment Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9. Tax return amendment Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Rule 10. Tax return amendment You Cannot Be a Qualifying Child of Another Taxpayer Part C. Tax return amendment Rules If You Do Not Have a Qualifying ChildRule 11. Tax return amendment You Must Be at Least Age 25 but Under Age 65 Rule 12. Tax return amendment You Cannot Be the Dependent of Another Person Rule 13. Tax return amendment You Cannot Be a Qualifying Child of Another Taxpayer Rule 14. Tax return amendment You Must Have Lived in the United States More Than Half of the Year Part D. Tax return amendment Figuring and Claiming the EICRule 15. Tax return amendment Your Earned Income Must Be Less Than: IRS Will Figure the EIC for You How To Figure the EIC Yourself ExamplesExample 1. Tax return amendment John and Janet Smith (Form 1040A) Example 2. Tax return amendment Kelly Green (Form 1040EZ) What's New Earned income amount is more. Tax return amendment  The maximum amount of income you can earn and still get the credit has increased. Tax return amendment 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). Tax return amendment Your adjusted gross income also must be less than the amount in the above list that applies to you. Tax return amendment For details, see Rules 1 and 15. Tax return amendment Investment income amount is more. Tax return amendment  The maximum amount of investment income you can have and still get the credit has increased to $3,300. Tax return amendment See Rule 6. Tax return amendment Reminders Increased EIC on certain joint returns. Tax return amendment  A married person filing a joint return may get more EIC than someone with the same income but a different filing status. Tax return amendment As a result, the EIC table has different columns for married persons filing jointly than for everyone else. Tax return amendment 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. Tax return amendment Online help. Tax return amendment  You can use the EITC Assistant at www. Tax return amendment irs. Tax return amendment gov/eitc to find out if you are eligible for the credit. Tax return amendment The EITC Assistant is available in English and Spanish. Tax return amendment EIC questioned by IRS. Tax return amendment  The IRS may ask you to provide documents to prove you are entitled to claim the EIC. Tax return amendment We will tell you what documents to send us. Tax return amendment These may include: birth certificates, school records, medical records, etc. Tax return amendment The process of establishing your eligibility will delay your refund. Tax return amendment Introduction The earned income credit (EIC) is a tax credit for certain people who work and have less than $51,567 of earned income. Tax return amendment A tax credit usually means more money in your pocket. Tax return amendment It reduces the amount of tax you owe. Tax return amendment The EIC may also give you a refund. Tax return amendment 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. Tax return amendment 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. Tax return amendment Or, if you prefer, you can let the IRS figure the credit for you. Tax return amendment How will this chapter help you?   This chapter will explain the following. Tax return amendment The rules you must meet to qualify for the EIC. Tax return amendment How to figure the EIC. Tax return amendment 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 . Tax return amendment 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 . Tax return amendment There is one final rule you must meet in Part D, Figuring and Claiming the EIC . Tax return amendment You qualify for the credit if you meet all the rules in each part that applies to you. Tax return amendment If you have a qualifying child, the rules in Parts A, B, and D apply to you. Tax return amendment If you do not have a qualifying child, the rules in Parts A, C, and D apply to you. Tax return amendment Table 36-1, Earned Income Credit in a Nutshell. Tax return amendment   Use Table 36–1 as a guide to Parts A, B, C, and D. Tax return amendment The table is a summary of all the rules in each part. Tax return amendment 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. Tax return amendment 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. Tax return amendment You must also qualify to claim the EIC by meeting all the rules described in this chapter. Tax return amendment 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. Tax return amendment For example, if your arithmetic is incorrect, the IRS can correct it. Tax return amendment If you do not provide a correct social security number, the IRS can deny the EIC. Tax return amendment These kinds of errors are called math or clerical errors. Tax return amendment 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. Tax return amendment If your error was due to fraud, then you cannot claim the EIC for the next 10 years. Tax return amendment More information. Tax return amendment   See chapter 5 in Publication 596 for more detailed information about the disallowance period and Form 8862. Tax return amendment Part A. Tax return amendment Rules for Everyone This part of the chapter discusses Rules 1 through 7. Tax return amendment You must meet all seven rules to qualify for the earned income credit. Tax return amendment 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. Tax return amendment 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. Tax return amendment Rule 1. Tax return amendment 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. Tax return amendment Adjusted gross income (AGI). Tax return amendment   AGI is the amount on line 38 (Form 1040), line 22 (Form 1040A), or line 4 (Form 1040EZ). Tax return amendment If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. Tax return amendment Example. Tax return amendment Your AGI is $38,550, you are single, and you have one qualifying child. Tax return amendment You cannot claim the EIC because your AGI is not less than $37,870. Tax return amendment 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. Tax return amendment Community property. Tax return amendment   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. Tax return amendment This is different from the community property rules that apply under Rule 7 . Tax return amendment Rule 2. Tax return amendment 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). Tax return amendment Any qualifying child listed on Schedule EIC also must have a valid SSN. Tax return amendment (See Rule 8 if you have a qualifying child. Tax return amendment ) 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. Tax return amendment An example of a federally funded benefit is Medicaid. Tax return amendment 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. Tax return amendment S. Tax return amendment citizen or permanent resident, ask the SSA for a new social security card without the legend. Tax return amendment U. Tax return amendment S. Tax return amendment citizen. Tax return amendment   If you were a U. Tax return amendment S. Tax return amendment citizen when you received your SSN, you have a valid SSN. Tax return amendment Valid for work only with INS or DHS authorization. Tax return amendment   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. Tax return amendment SSN missing or incorrect. Tax return amendment   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. Tax return amendment Other taxpayer identification number. Tax return amendment   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). Tax return amendment ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. Tax return amendment No SSN. Tax return amendment   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). Tax return amendment You cannot claim the EIC. Tax return amendment Getting an SSN. Tax return amendment   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. Tax return amendment You can get Form SS-5 online at www. Tax return amendment socialsecurity. Tax return amendment gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. Tax return amendment Filing deadline approaching and still no SSN. Tax return amendment   If the filing deadline is approaching and you still do not have an SSN, you have two choices. Tax return amendment Request an automatic 6-month extension of time to file your return. Tax return amendment You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Tax return amendment S. Tax return amendment Individual Income Tax Return. Tax return amendment For more information, see chapter 1 . Tax return amendment File the return on time without claiming the EIC. Tax return amendment After receiving the SSN, file an amended return (Form 1040X, Amended U. Tax return amendment S. Tax return amendment Individual Income Tax Return) claiming the EIC. Tax return amendment Attach a filled-in Schedule EIC if you have a qualifying child. Tax return amendment Table 36-1. Tax return amendment Earned Income Credit in a Nutshell First, you must meet all the rules in this column. Tax return amendment Second, you must meet all the rules in one of these columns, whichever applies. Tax return amendment Third, you must meet the rule in this column. Tax return amendment Part A. Tax return amendment  Rules for Everyone Part B. Tax return amendment  Rules If You Have a Qualifying Child Part C. Tax return amendment  Rules If You Do Not Have a Qualifying Child Part D. Tax return amendment  Figuring and Claiming the EIC 1. Tax return amendment 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. Tax return amendment 2. Tax return amendment You must have a valid social security number. Tax return amendment  3. Tax return amendment Your filing status cannot be “Married filing separately. Tax return amendment ” 4. Tax return amendment You must be a U. Tax return amendment S. Tax return amendment citizen or resident alien all year. Tax return amendment  5. Tax return amendment You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income). Tax return amendment  6. Tax return amendment Your investment income must be $3,300 or less. Tax return amendment  7. Tax return amendment You must have earned income. Tax return amendment 8. Tax return amendment Your child must meet the relationship, age, residency, and joint return tests. Tax return amendment  9. Tax return amendment Your qualifying child cannot be used by more than one person to claim the EIC. Tax return amendment  10. Tax return amendment You cannot be a qualifying child of another person. Tax return amendment 11. Tax return amendment You must be at least age 25 but under age 65. Tax return amendment  12. Tax return amendment You cannot be the dependent of another person. Tax return amendment  13. Tax return amendment You cannot be a qualifying child of another person. Tax return amendment  14. Tax return amendment You must have lived in the United States more than half of the year. Tax return amendment 15. Tax return amendment 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. Tax return amendment Rule 3. Tax return amendment Your Filing Status Cannot Be Married Filing Separately If you are married, you usually must file a joint return to claim the EIC. Tax return amendment Your filing status cannot be “Married filing separately. Tax return amendment ” Spouse did not live with you. Tax return amendment   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. Tax return amendment In that case, you may be able to claim the EIC. Tax return amendment For detailed information about filing as head of household, see chapter 2 . Tax return amendment Rule 4. Tax return amendment You Must Be a U. Tax return amendment S. Tax return amendment 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. Tax return amendment You can use that filing status only if one spouse is a U. Tax return amendment S. Tax return amendment citizen or resident alien and you choose to treat the nonresident spouse as a U. Tax return amendment S. Tax return amendment resident. Tax return amendment If you make this choice, you and your spouse are taxed on your worldwide income. Tax return amendment 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). Tax return amendment If you need more information on making this choice, get Publication 519, U. Tax return amendment S. Tax return amendment Tax Guide for Aliens. Tax return amendment Rule 5. Tax return amendment 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. Tax return amendment You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. Tax return amendment U. Tax return amendment S. Tax return amendment possessions are not foreign countries. Tax return amendment See Publication 54, Tax Guide for U. Tax return amendment S. Tax return amendment Citizens and Resident Aliens Abroad, for more detailed information. Tax return amendment Rule 6. Tax return amendment 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. Tax return amendment If your investment income is more than $3,300, you cannot claim the credit. Tax return amendment For most people, investment income is the total of the following amounts. Tax return amendment Taxable interest (line 8a of Form 1040 or 1040A). Tax return amendment Tax-exempt interest (line 8b of Form 1040 or 1040A). Tax return amendment Dividend income (line 9a of Form 1040 or 1040A). Tax return amendment Capital gain net income (line 13 of Form 1040, if more than zero, or line 10 of Form 1040A). Tax return amendment 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. Tax return amendment 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. Tax return amendment Rule 7. Tax return amendment You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. Tax return amendment If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. Tax return amendment If you are an employee, earned income includes all the taxable income you get from your employer. Tax return amendment 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. Tax return amendment Earned Income Earned income includes all of the following types of income. Tax return amendment Wages, salaries, tips, and other taxable employee pay. Tax return amendment Employee pay is earned income only if it is taxable. Tax return amendment Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Tax return amendment But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained below. Tax return amendment Net earnings from self-employment. Tax return amendment Gross income received as a statutory employee. Tax return amendment Wages, salaries, and tips. Tax return amendment   Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. Tax return amendment You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). Tax return amendment Nontaxable combat pay election. Tax return amendment   You can elect to include your nontaxable combat pay in earned income for the earned income credit. Tax return amendment Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. Tax return amendment Figure the credit with and without your nontaxable combat pay before making the election. Tax return amendment   If you make the election, you must include in earned income all nontaxable combat pay you received. Tax return amendment If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. Tax return amendment In other words, if one of you makes the election, the other one can also make it but does not have to. Tax return amendment   The amount of your nontaxable combat pay should be shown in box 12 of your Form W-2 with code “Q. Tax return amendment ” Self-employed persons and statutory employees. Tax return amendment   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. Tax return amendment 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. Tax return amendment Each approved form exempts certain income from social security taxes. Tax return amendment Each form is discussed here in terms of what is or is not earned income for the EIC. Tax return amendment Form 4361. Tax return amendment   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. Tax return amendment This includes wages, salaries, tips, and other taxable employee compensation. Tax return amendment A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. Tax return amendment Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. Tax return amendment Examples include fees for performing marriages and honoraria for delivering speeches. Tax return amendment Form 4029. Tax return amendment   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. Tax return amendment However, amounts you received as a self-employed individual do not count as earned income. Tax return amendment Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. Tax return amendment 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. Tax return amendment Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. Tax return amendment You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. Tax return amendment Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Tax return amendment Report taxable pension payments on Form 1040, lines 16a and 16b (or Form 1040A, lines 12a and 12b). Tax return amendment Disability insurance payments. Tax return amendment   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. Tax return amendment It does not matter whether you have reached minimum retirement age. Tax return amendment If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. Tax return amendment ” 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. Tax return amendment Do not include any of these items in your earned income. Tax return amendment Earnings while an inmate. Tax return amendment   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. Tax return amendment This includes amounts for work performed while in a work release program or while in a halfway house. Tax return amendment Workfare payments. Tax return amendment   Nontaxable workfare payments are not earned income for the EIC. Tax return amendment 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. Tax return amendment Community property. Tax return amendment   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. Tax return amendment That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. Tax return amendment 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. Tax return amendment Nevada, Washington, and California domestic partners. Tax return amendment   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. Tax return amendment Your earned income for the EIC does not include any amount earned by your partner. Tax return amendment Your earned income includes the entire amount you earned. Tax return amendment For details, see Publication 555. Tax return amendment Conservation Reserve Program (CRP) payments. Tax return amendment   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. Tax return amendment Nontaxable military pay. Tax return amendment   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. Tax return amendment Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). Tax return amendment See Publication 3, Armed Forces' Tax Guide, for more information. Tax return amendment    Combat pay. Tax return amendment You can elect to include your nontaxable combat pay in earned income for the EIC. Tax return amendment See Nontaxable combat pay election, earlier. Tax return amendment Part B. Tax return amendment 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. Tax return amendment Part B discusses Rules 8 through 10. Tax return amendment 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. Tax return amendment You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. Tax return amendment (You cannot file Form 1040EZ. Tax return amendment ) You also must complete Schedule EIC and attach it to your return. Tax return amendment If you meet all the rules in Part A and this part, read Part D to find out what to do next. Tax return amendment If you do not meet Rule 8, you do not have a qualifying child. Tax return amendment Read Part C to find out if you can get the earned income credit without a qualifying child. Tax return amendment Rule 8. Tax return amendment Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. Tax return amendment The four tests are: Relationship, Age, Residency, and Joint return. Tax return amendment The four tests are illustrated in Figure 36–1. Tax return amendment The paragraphs that follow contain more information about each test. Tax return amendment 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). Tax return amendment The following definitions clarify the relationship test. Tax return amendment Adopted child. Tax return amendment   An adopted child is always treated as your own child. Tax return amendment The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Tax return amendment Foster child. Tax return amendment   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. Tax return amendment An authorized placement agency includes a state or local government agency. Tax return amendment It also includes a tax-exempt organization licensed by a state. Tax return amendment In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. Tax return amendment Example. Tax return amendment 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. Tax return amendment Debbie is your foster child. Tax return amendment 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. Tax return amendment    The following examples and definitions clarify the age test. Tax return amendment Example 1—child not under age 19. Tax return amendment Your son turned 19 on December 10. Tax return amendment 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. Tax return amendment Example 2—child not younger than you or your spouse. Tax return amendment Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. Tax return amendment He is not disabled. Tax return amendment Both you and your spouse are 21 years old and you file a joint return. Tax return amendment Your brother is not your qualifying child because he is not younger than you or your spouse. Tax return amendment Example 3—child younger than your spouse but not younger than you. Tax return amendment The facts are the same as in Example 2 except that your spouse is 25 years old. Tax return amendment Because your brother is younger than your spouse, he is your qualifying child even though he is not younger than you. Tax return amendment Student defined. Tax return amendment   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. Tax return amendment The 5 calendar months need not be consecutive. Tax return amendment   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. Tax return amendment School defined. Tax return amendment   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Tax return amendment However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. Tax return amendment Vocational high school students. Tax return amendment   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. Tax return amendment Permanently and totally disabled. Tax return amendment   Your child is permanently and totally disabled if both of the following apply. Tax return amendment He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Tax return amendment A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Tax return amendment Residency Test Your child must have lived with you in the United States for more than half of 2013. Tax return amendment The following definitions clarify the residency test. Tax return amendment United States. Tax return amendment   This means the 50 states and the District of Columbia. Tax return amendment It does not include Puerto Rico or U. Tax return amendment S. Tax return amendment possessions such as Guam. Tax return amendment Homeless shelter. Tax return amendment   Your home can be any location where you regularly live. Tax return amendment You do not need a traditional home. Tax return amendment 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. Tax return amendment Military personnel stationed outside the United States. Tax return amendment    U. Tax return amendment S. Tax return amendment 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. Tax return amendment Figure 36-1. Tax return amendment Tests for Qualifying Child Please click here for the text description of the image. Tax return amendment Qualifying child Extended active duty. Tax return amendment   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Tax return amendment 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. Tax return amendment Birth or death of a child. Tax return amendment   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. Tax return amendment Temporary absences. Tax return amendment   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. Tax return amendment Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. Tax return amendment Kidnapped child. Tax return amendment    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. Tax return amendment 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. Tax return amendment This treatment applies for all years until the child is returned. Tax return amendment 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. Tax return amendment   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. Tax return amendment Joint Return Test To meet this test, the child cannot file a joint return for the year. Tax return amendment Exception. Tax return amendment   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. Tax return amendment Example 1—child files joint return. Tax return amendment You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Tax return amendment He earned $25,000 for the year. Tax return amendment The couple files a joint return. Tax return amendment Because your daughter and her husband filed a joint return, she is not your qualifying child. Tax return amendment Example 2—child files joint return only to claim a refund of withheld tax. Tax return amendment Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Tax return amendment They do not have a child. Tax return amendment Neither is required to file a tax return. Tax return amendment Taxes were taken out of their pay, so they filed a joint return only to get a refund of the withheld taxes. Tax return amendment The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Tax return amendment Example 3—child files joint return to claim American opportunity credit. Tax return amendment The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Tax return amendment 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. Tax return amendment 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. Tax return amendment The exception to the joint return test does not apply, so your son is not your qualifying child. Tax return amendment Married child. Tax return amendment   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. Tax return amendment Social security number. Tax return amendment   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. Tax return amendment 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. Tax return amendment   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. Tax return amendment For more information about SSNs, see Rule 2 . Tax return amendment Rule 9. Tax return amendment 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. Tax return amendment However, only one of these persons can actually treat the child as a qualifying child. Tax return amendment 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). Tax return amendment The exemption for the child. Tax return amendment The child tax credit. Tax return amendment Head of household filing status. Tax return amendment The credit for child and dependent care expenses. Tax return amendment The exclusion for dependent care benefits. Tax return amendment The EIC. Tax return amendment The other person cannot take any of these benefits based on this qualifying child. Tax return amendment In other words, you and the other person cannot agree to divide these tax benefits between you. Tax return amendment The other person cannot take any of these tax benefits unless he or she has a different qualifying child. Tax return amendment The tiebreaker rules explained next explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. Tax return amendment However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. Tax return amendment Tiebreaker rules. Tax return amendment   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. Tax return amendment If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Tax return amendment 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. Tax return amendment 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. Tax return amendment 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. Tax return amendment 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. Tax return amendment 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. Tax return amendment 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. Tax return amendment See Example 8 . Tax return amendment   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. Tax return amendment See Examples 1 through 13 . Tax return amendment   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. Tax return amendment If the other person cannot claim the EIC. Tax return amendment   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. Tax return amendment See Examples 6 and 7 . Tax return amendment 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. Tax return amendment Examples. Tax return amendment The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. Tax return amendment Example 1. Tax return amendment You and your 2-year-old son Jimmy lived with your mother all year. Tax return amendment You are 25 years old, unmarried, and your AGI is $9,000. Tax return amendment Your only income was $9,000 from a part-time job. Tax return amendment Your mother's only income was $20,000 from her job, and her AGI is $20,000. Tax return amendment Jimmy's father did not live with you or Jimmy. Tax return amendment The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. Tax return amendment 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. Tax return amendment 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). Tax return amendment He is not a qualifying child of anyone else, including his father. Tax return amendment 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). Tax return amendment Example 2. Tax return amendment The facts are the same as in Example 1 except your AGI is $25,000. Tax return amendment Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. Tax return amendment Only you can claim him. Tax return amendment Example 3. Tax return amendment The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. Tax return amendment 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. Tax return amendment 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. Tax return amendment Example 4. Tax return amendment 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. Tax return amendment Only one of you can claim each child. Tax return amendment However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Tax return amendment For example, if you claim one child, your mother can claim the other two. Tax return amendment Example 5. Tax return amendment The facts are the same as in Example 1 except that you are only 18 years old. Tax return amendment This means you are a qualifying child of your mother. Tax return amendment Because of Rule 10 , discussed next, you cannot claim the EIC and cannot claim Jimmy as a qualifying child. Tax return amendment Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. Tax return amendment 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. Tax return amendment Example 6. Tax return amendment The facts are the same as in Example 1 except that your mother earned $50,000 from her job. Tax return amendment Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. Tax return amendment Example 7. Tax return amendment The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. Tax return amendment Your earned income is too high for you to claim the EIC. Tax return amendment But your mother cannot claim the EIC either, because her AGI is not higher than yours. Tax return amendment Example 8. Tax return amendment 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. Tax return amendment 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. Tax return amendment 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. Tax return amendment In other words, each parent's AGI can be treated as $15,000. Tax return amendment Example 9. Tax return amendment You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. Tax return amendment In August and September, Joey lived with you. Tax return amendment For the rest of the year, Joey lived with your husband, who is Joey's father. Tax return amendment 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. Tax return amendment 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. Tax return amendment You and your husband will file separate returns. Tax return amendment Your husband agrees to let you treat Joey as a qualifying child. Tax return amendment 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. Tax return amendment However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. Tax return amendment See Rule 3 . Tax return amendment Example 10. Tax return amendment The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. Tax return amendment In this case, only your husband will be allowed to treat Joey as a qualifying child. Tax return amendment This is because, during 2013, the boy lived with him longer than with you. Tax return amendment You cannot claim the EIC (either with or without a qualifying child). Tax return amendment 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. Tax return amendment See Rule 3 . Tax return amendment Example 11. Tax return amendment You, your 5-year-old son and your son's father lived together all year. Tax return amendment You and your son's father are not married. Tax return amendment 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. Tax return amendment Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. Tax return amendment Neither of you had any other income. Tax return amendment Your son's father agrees to let you treat the child as a qualifying child. Tax return amendment 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. Tax return amendment Example 12. Tax return amendment 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. Tax return amendment In this case, only your son's father will be allowed to treat your son as a qualifying child. Tax return amendment This is because his AGI, $14,000, is more than your AGI, $12,000. Tax return amendment You cannot claim the EIC (either with or without a qualifying child). Tax return amendment Example 13. Tax return amendment You and your 7-year-old niece, your sister's child, lived with your mother all year. Tax return amendment You are 25 years old, and your AGI is $9,300. Tax return amendment Your only income was from a part-time job. Tax return amendment Your mother's AGI is $15,000. Tax return amendment Her only income was from her job. Tax return amendment Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Tax return amendment 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. Tax return amendment However, only your mother can treat her as a qualifying child. Tax return amendment This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Tax return amendment Special rule for divorced or separated parents (or parents who live apart). Tax return amendment   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. Tax return amendment 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. Tax return amendment The child received over half of his or her support for the year from the parents. Tax return amendment The child is in the custody of one or both parents for more than half of 2013. Tax return amendment Either of the following statements is true. Tax return amendment 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. Tax return amendment 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. Tax return amendment 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. Tax return amendment  For details, see chapter 3. Tax return amendment Also see Applying Rule 9 to divorced or separated parents (or parents who live apart) , next. Tax return amendment Applying Rule 9 to divorced or separated parents (or parents who live apart). Tax return amendment   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. Tax return amendment 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. Tax return amendment 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. Tax return amendment Example 1. Tax return amendment You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Tax return amendment Your AGI is $10,000. Tax return amendment Your mother’s AGI is $25,000. Tax return amendment Your son's father did not live with you or your son. Tax return amendment 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. Tax return amendment 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. Tax return amendment You and your mother did not have any child care expenses or dependent care benefits. Tax return amendment 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. Tax return amendment Example 2. Tax return amendment The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. Tax return amendment Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Tax return amendment Example 3. Tax return amendment 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. Tax return amendment Your mother also claims him as a qualifying child for head of household filing status. Tax return amendment You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. Tax return amendment The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. Tax return amendment Rule 10. Tax return amendment You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Tax return amendment ) if all of the following statements are true. Tax return amendment You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Tax return amendment Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Tax return amendment 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. Tax return amendment You lived with that person in the United States for more than half of the year. Tax return amendment 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). Tax return amendment For more details about the tests to be a qualifying child, see Rule 8 . Tax return amendment If you are a qualifying child of another taxpayer, you cannot claim the EIC. Tax return amendment 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. Tax return amendment Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). Tax return amendment Example. Tax return amendment You and your daughter lived with your mother all year. Tax return amendment You are 22 years old, unmarried, and attended a trade school full time. Tax return amendment You had a part-time job and earned $5,700. Tax return amendment You had no other income. Tax return amendment Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. Tax return amendment She can claim the EIC if she meets all the other requirements. Tax return amendment Because you are your mother's qualifying child, you cannot claim the EIC. Tax return amendment This is so even if your mother cannot or does not claim the EIC. Tax return amendment Child of person not required to file a return. Tax return amendment   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. Tax return amendment Example. Tax return amendment 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. Tax return amendment As a result, you are not your mother's qualifying child. Tax return amendment You can claim the EIC if you meet all the other requirements to do so. Tax return amendment   See Rule 10 in Publication 596 for additional examples. Tax return amendment Part C. Tax return amendment 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 . Tax return amendment  Part C discusses Rules 11 through 14. Tax return amendment 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. Tax return amendment If you have a qualifying child, the rules in this part do not apply to you. Tax return amendment You can claim the credit only if you meet all the rules in Parts A, B, and D. Tax return amendment See Rule 8 to find out if you have a qualifying child. Tax return amendment Rule 11. Tax return amendment 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. Tax return amendment 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. Tax return amendment It does not matter which spouse meets the age test, as long as one of the spouses does. Tax return amendment You meet the age test if you were born after December 31, 1948, and before January 2, 1989. Tax return amendment 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. Tax return amendment If neither you nor your spouse meets the age test, you cannot claim the EIC. Tax return amendment Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Tax return amendment Death of spouse. Tax return amendment   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. Tax return amendment Example 1. Tax return amendment You are age 28 and unmarried. Tax return amendment You meet the age test. Tax return amendment Example 2—spouse meets age test. Tax return amendment You are married and filing a joint return. Tax return amendment You are age 23 and your spouse is age 27. Tax return amendment You meet the age test because your spouse is at least age 25 but under age 65. Tax return amendment Example 3—spouse dies in 2013. Tax return amendment You are married and filing a joint return with your spouse who died in August 2013. Tax return amendment You are age 67. Tax return amendment Your spouse would have become age 65 in November 2013. Tax return amendment Because your spouse was under age 65 when she died, you meet the age test. Tax return amendment Rule 12. Tax return amendment 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. Tax return amendment 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. Tax return amendment 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. Tax return amendment 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. Tax return amendment Example 1. Tax return amendment In 2013, you were age 25, single, and living at home with your parents. Tax return amendment You worked and were not a student. Tax return amendment You earned $7,500. Tax return amendment Your parents cannot claim you as a dependent. Tax return amendment 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. Tax return amendment You meet this rule. Tax return amendment You can claim the EIC if you meet all the other requirements. Tax return amendment Example 2. Tax return amendment The facts are the same as in Example 1 , except that you earned $2,000. Tax return amendment Your parents can claim you as a dependent but decide not to. Tax return amendment You do not meet this rule. Tax return amendment You cannot claim the credit because your parents could have claimed you as a dependent. Tax return amendment Joint returns. Tax return amendment   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. Tax return amendment   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. Tax return amendment But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. Tax return amendment Example 1. Tax return amendment You are 26 years old. Tax return amendment You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. Tax return amendment Neither you nor your wife is required to file a tax return. Tax return amendment You do not have a child. Tax return amendment Taxes were taken out of your pay, so you file a joint return only to get a refund of the withheld taxes. Tax return amendment Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. Tax return amendment They can claim exemptions for you and your wife if all the other tests to do so are met. Tax return amendment Example 2. Tax return amendment The facts are the same as in Example 1 except no taxes were taken out of your pay. Tax return amendment 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. Tax return amendment 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. Tax return amendment Your parents cannot claim an exemption for either you or your wife. Tax return amendment Rule 13. Tax return amendment You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Tax return amendment ) if all of the following statements are true. Tax return amendment You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Tax return amendment Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Tax return amendment 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. Tax return amendment You lived with that person in the United States for more than half of the year. Tax return amendment 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). Tax return amendment For more details about the tests to be a qualifying child, see Rule 8 . Tax return amendment If you are a qualifying child of another taxpayer, you cannot claim the EIC. Tax return amendment 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. Tax return amendment Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Tax return amendment Example. Tax return amendment You lived with your mother all year. Tax return amendment You are age 26, unmarried, and permanently and totally disabled. Tax return amendment Your only income was from a community center where you went three days a week to answer telephones. Tax return amendment You earned $5,000 for the year and provided more than half of your own support. Tax return amendment Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. Tax return amendment She can claim the EIC if she meets all the other requirements. Tax return amendment Because you are a qualifying child of your mother, you cannot claim the EIC. Tax return amendment This is so even if your mother cannot or does not claim the EIC. Tax return amendment Joint returns. Tax return amendment   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. Tax return amendment   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. Tax return amendment But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. Tax return amendment Child of person not required to file a return. Tax return amendment   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. Tax return amendment Example. Tax return amendment You lived all year with your father. Tax return amendment You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. Tax return amendment You have no other income, no children, and provided more than half of your own support. Tax return amendment Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Tax return amendment As a result, you are not your father's qualifying child. Tax return amendment You can claim the EIC if you meet all the other requirements to do so. Tax return amendment   See Rule 13 in Publication 596 for additional examples. Tax return amendment Rule 14. Tax return amendment 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. Tax return amendment If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Tax return amendment United States. Tax return amendment   This means the 50 states and the District of Columbia. Tax return amendment It does not include Puerto Rico or U. Tax return amendment S. Tax return amendment possessions such as Guam. Tax return amendment Homeless shelter. Tax return amendment   Your home can be any location where you regularly live. Tax return amendment You do not need a traditional home. Tax return amendment If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. Tax return amendment Military personnel stationed outside the United States. Tax return amendment   U. Tax return amendment S. Tax return amendment 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. Tax return amendment Part D. Tax return amendment 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. Tax return amendment Part D discusses Rule 15 . Tax return amendment 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. Tax return amendment This part of the chapter also explains how to figure the amount of your credit. Tax return amendment You have two choices. Tax return amendment Have the IRS figure the EIC for you. Tax return amendment If you want to do this, see IRS Will Figure the EIC for You . Tax return amendment Figure the EIC yourself. Tax return amendment If you want to do this, see How To Figure the EIC Yourself . Tax return amendment Rule 15. Tax return amendment 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. Tax return amendment Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Tax return amendment Employee pay is earned income only if it is taxable. Tax return amendment Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Tax return amendment But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Tax return amendment Earned income is explained in detail in Rule 7 . Tax return amendment Figuring earned income. Tax return amendment   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. Tax return amendment   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. Tax return amendment   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). Tax return amendment 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. Tax return amendment Scholarship or fellowship grants not reported on a Form W-2. Tax return amendment   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. Tax return amendment Inmate's income. Tax return amendment   Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. Tax return amendment This includes amounts received for work performed while in a work release program or while in a halfway house. Tax return amendment 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). Tax return amendment Pension or annuity from deferred compensation plans. Tax return amendment   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. Tax return amendment 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). Tax return amendment This amount may be reported in box 11 of your Form W-2. Tax return amendment If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. Tax return amendment Clergy. Tax return amendment   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. Tax return amendment Put “Clergy” on the dotted line next to line 64a (Form 1040). Tax return amendment Church employees. Tax return amendment    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. Tax return amendment If you received wages as a