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1040x Electronic Filing

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1040x Electronic Filing

1040x electronic filing 8. 1040x electronic filing   Distributions and Rollovers Table of Contents DistributionsMinimum Required Distributions No Special 10-Year Tax Option Transfer of Interest in 403(b) ContractAfter-tax contributions. 1040x electronic filing Permissive service credit. 1040x electronic filing Tax-Free RolloversHardship exception to rollover rules. 1040x electronic filing Eligible retirement plans. 1040x electronic filing Nonqualifying distributions. 1040x electronic filing Second rollover. 1040x electronic filing Gift Tax Distributions Permissible distributions. 1040x electronic filing   Generally, a distribution cannot be made from a 403(b) account until the employee: Reaches age 59½, Has a severance from employment, Dies, Becomes disabled, In the case of elective deferrals, encounters financial hardship, or Has a qualified reservist distribution. 1040x electronic filing In most cases, the payments you receive or that are made available to you under your 403(b) account are taxable in full as ordinary income. 1040x electronic filing In general, the same tax rules apply to distributions from 403(b) plans that apply to distributions from other retirement plans. 1040x electronic filing These rules are explained in Publication 575. 1040x electronic filing Publication 575 also discusses the additional tax on early distributions from retirement plans. 1040x electronic filing Retired public safety officers. 1040x electronic filing   If you are an eligible retired public safety officer, distributions of up to $3,000, made directly from your 403(b) plan to pay accident, health, or long-term care insurance, are not included in your taxable income. 1040x electronic filing The premiums can be for you, your spouse, or your dependents. 1040x electronic filing   A public safety officer is a law enforcement officer, fire fighter, chaplain, or member of a rescue squad or ambulance crew. 1040x electronic filing   For additional information, see Publication 575. 1040x electronic filing Distribution for active reservist. 1040x electronic filing   The 10% penalty for early withdrawals will not apply to a qualified reservist distribution attributable to elective deferrals from a 403(b) plan. 1040x electronic filing A qualified reservist distribution is a distribution that is made: To an individual who is a reservist or national guardsman and who was ordered or called to active duty for a period in excess of 179 days or for an indefinite period; and During the period beginning on the date of the order or call to duty and ending at the close of the active duty period. 1040x electronic filing Minimum Required Distributions You must receive all, or at least a certain minimum, of your interest accruing after 1986 in the 403(b) plan by April 1 of the calendar year following the later of the calendar year in which you become age 70½, or the calendar year in which you retire. 1040x electronic filing Check with your employer, plan administrator, or provider to find out whether this rule also applies to pre-1987 accruals. 1040x electronic filing If not, a minimum amount of these accruals must begin to be distributed by the later of the end of the calendar year in which you reach age 75 or April 1 of the calendar year following retirement. 1040x electronic filing For each year thereafter, the minimum distribution must be made by the last day of the year. 1040x electronic filing If you do not receive the required minimum distribution, you are subject to a nondeductible 50% excise tax on the difference between the required minimum distribution and the amount actually distributed. 1040x electronic filing No Special 10-Year Tax Option A distribution from a 403(b) plan does not qualify as a lump-sum distribution. 1040x electronic filing This means you cannot use the special 10-year tax option to calculate the taxable portion of a 403(b) distribution. 1040x electronic filing For more information, see Publication 575. 1040x electronic filing Transfer of Interest in 403(b) Contract Contract exchanges. 1040x electronic filing   If you transfer all or part of your interest from a 403(b) contract to another 403(b) contract (held in the same plan), the transfer is tax free, and is referred to as a contract exchange. 1040x electronic filing This was previously known as a 90-24 transfer. 1040x electronic filing A contract exchange is similar to a 90-24 transfer with one major difference. 1040x electronic filing Previously, you were able to accomplish the transfer without your employer’s involvement. 1040x electronic filing After September 24, 2007, all such transfers are accomplished through a contract exchange requiring your employer’s involvement. 1040x electronic filing In addition, the plan must provide for the exchange and the transferred interest must be subject to the same or stricter distribution restrictions. 1040x electronic filing Finally, your accumulated benefit after the exchange must be equal to what it was before the exchange. 1040x electronic filing   Transfers that do not satisfy this rule are plan distributions and are generally taxable as ordinary income. 1040x electronic filing Plan-to-plan transfers. 1040x electronic filing   You may also transfer part or all of your interest from a 403(b) plan to another 403(b) plan if you are an employee of (or were formerly employed by) the employer of the plan to which you would like to transfer. 1040x electronic filing Both the initial plan and the receiving plan must provide for transfers. 1040x electronic filing Your accumulated benefit after the transfer must be at least equal to what it was before the transfer. 1040x electronic filing The new plan’s restrictions on distributions must be the same or stricter than those of the original plan. 1040x electronic filing Tax-free transfers for certain cash distributions. 1040x electronic filing   A tax-free transfer may also apply to a cash distribution of your 403(b) account from an insurance company that is subject to a rehabilitation, conservatorship, insolvency, or similar state proceeding. 1040x electronic filing To receive tax-free treatment, you must do all of the following: Withdraw all the cash to which you are entitled in full settlement of your contract rights or, if less, the maximum permitted by the state. 1040x electronic filing Reinvest the cash distribution in a single policy or contract issued by another insurance company or in a single custodial account subject to the same or stricter distribution restrictions as the original contract not later than 60 days after you receive the cash distribution. 1040x electronic filing Assign all future distribution rights to the new contract or account for investment in that contract or account if you received an amount that is less than what you are entitled to because of state restrictions. 1040x electronic filing   In addition to the preceding requirements, you must provide the new insurer with a written statement containing all of the following information: The gross amount of cash distributed under the old contract. 1040x electronic filing The amount of cash reinvested in the new contract. 1040x electronic filing Your investment in the old contract on the date you receive your first cash distribution. 1040x electronic filing   Also, you must attach the following items to your timely filed income tax return in the year you receive the first distribution of cash. 1040x electronic filing A copy of the statement you gave the new insurer. 1040x electronic filing A statement that includes: The words ELECTION UNDER REV. 1040x electronic filing PROC. 1040x electronic filing 92-44, The name of the company that issued the new contract, and The new policy number. 1040x electronic filing Direct trustee-to-trustee transfer. 1040x electronic filing   If you make a direct trustee-to-trustee transfer, from your governmental 403(b) account to a defined benefit governmental plan, it may not be includible in gross income. 1040x electronic filing   The transfer amount is not includible in gross income if it is made to: Purchase permissive service credits, or Repay contributions and earnings that were previously refunded under a forfeiture of service credit under the plan, or under another plan maintained by a state or local government employer within the same state. 1040x electronic filing After-tax contributions. 1040x electronic filing   For distributions beginning after December 31, 2006, after-tax contributions can be rolled over between a 403(b) plan and a defined benefit plan, IRA, or a defined contribution plan. 1040x electronic filing If the rollover is to or from a 403(b) plan, it must occur through a direct trustee-to-trustee transfer. 1040x electronic filing Permissive service credit. 1040x electronic filing   A permissive service credit is credit for a period of service recognized by a defined benefit governmental plan only if you voluntarily contribute to the plan an amount that does not exceed the amount necessary to fund the benefit attributable to the period of service and the amount contributed is in addition to the regular employee contribution, if any, under the plan. 1040x electronic filing   A permissive service credit may also include service credit for up to 5 years where there is no performance of service, or service credited to provide an increased benefit for service credit which a participant is receiving under the plan. 1040x electronic filing   Check with your plan administrator as to the type and extent of service that may be purchased by this transfer. 1040x electronic filing Tax-Free Rollovers You can generally roll over tax free all or any part of a distribution from a 403(b) plan to a traditional IRA or a non-Roth eligible retirement plan, except for any nonqualifying distributions, described later. 1040x electronic filing You may also roll over any part of a distribution from a 403(b) plan by converting it through a direct rollover, described below, to a Roth IRA. 1040x electronic filing Conversion amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. 1040x electronic filing See Publication 590 for more information about conversion into a Roth IRA. 1040x electronic filing Note. 1040x electronic filing A participant is required to roll over distribution amounts received within 60 days in order for the amount to be treated as nontaxable. 1040x electronic filing Distribution amounts that are rolled over within the 60 days are not subject to the 10% early distribution penalty. 1040x electronic filing Rollovers to and from 403(b) plans. 1040x electronic filing   You can generally roll over tax free all or any part of a distribution from an eligible retirement plan to a 403(b) plan. 1040x electronic filing Beginning January 1, 2008, distributions from tax-qualified retirement plans and tax-sheltered annuities can be converted by making a direct rollover into a Roth IRA subject to the restrictions that currently apply to rollovers from a traditional IRA into a Roth IRA. 1040x electronic filing Converted amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. 1040x electronic filing See Publication 590 for more information on conversion into a Roth IRA. 1040x electronic filing   If a distribution includes both pre-tax contributions and after-tax contributions, the portion of the distribution that is rolled over is treated as consisting first of pre-tax amounts (contributions and earnings that would be includible in income if no rollover occurred). 1040x electronic filing This means that if you roll over an amount that is at least as much as the pre-tax portion of the distribution, you do not have to include any of the distribution in income. 1040x electronic filing   For more information on rollovers and eligible retirement plans, see Publication 575. 1040x electronic filing If you roll over money or other property from a 403(b) plan to an eligible retirement plan, see Publication 575 for information about possible effects on later distributions from the eligible retirement plan. 1040x electronic filing Hardship exception to rollover rules. 1040x electronic filing   The IRS may waive the 60-day rollover period if the failure to waive such requirement would be against equity or good conscience, including cases of casualty, disaster, or other events beyond the reasonable control of an individual. 1040x electronic filing   To obtain a hardship exception, you must apply to the IRS for a waiver of the 60-day rollover requirement. 1040x electronic filing You apply for the waiver by following the general instructions used in requesting a letter ruling. 1040x electronic filing These instructions are stated in Revenue Procedure 2013-4, 2013-1 I. 1040x electronic filing R. 1040x electronic filing B. 1040x electronic filing 126 available at www. 1040x electronic filing irs. 1040x electronic filing gov/irb/2013-01_IRB/ar09. 1040x electronic filing html, or see the latest annual update. 1040x electronic filing You must also pay a user fee with the application. 1040x electronic filing The user fee for a rollover that is less than $50,000 is $500. 1040x electronic filing For rollovers that are $50,000 or more, see Revenue Procedure 2013-8, 2013-1 I. 1040x electronic filing R. 1040x electronic filing B. 1040x electronic filing 237 available at www. 1040x electronic filing irs. 1040x electronic filing gov/irb/2013-01_IRB/ar13. 1040x electronic filing html, or see the latest annual update. 1040x electronic filing   In determining whether to grant a waiver, the IRS will consider all relevant facts and circumstances, including: Whether errors were made by the financial institution; Whether you were unable to complete the rollover due to death, disability, hospitalization, incarceration, restrictions imposed by a foreign country, or postal error; Whether you used the amount distributed (for example, in the case of payment by check, whether you cashed the check); and How much time has passed since the date of distribution. 1040x electronic filing   For additional information on rollovers, see Publication 590. 1040x electronic filing Eligible retirement plans. 1040x electronic filing   The following are considered eligible retirement plans. 1040x electronic filing Individual retirement arrangements. 1040x electronic filing Roth IRA. 1040x electronic filing 403(b) plans. 1040x electronic filing Government eligible 457 plans. 1040x electronic filing Qualified retirement plans. 1040x electronic filing  If the distribution is from a designated Roth account, then the only eligible retirement plan is another designated Roth account or a Roth IRA. 1040x electronic filing Nonqualifying distributions. 1040x electronic filing   You cannot roll over tax free: Minimum required distributions (generally required to begin at age 70½), Substantially equal payments over your life or life expectancy, Substantially equal payments over the joint lives or life expectancies of your beneficiary and you, Substantially equal payments for a period of 10 years or more, Hardship distributions, or Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or excess annual additions and any allocable gains. 1040x electronic filing Rollover of nontaxable amounts. 1040x electronic filing    You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another eligible retirement plan, traditional IRA, or Roth IRA. 1040x electronic filing The transfer must be made either through a direct rollover to an eligible plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional IRA or Roth IRA. 1040x electronic filing   If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution. 1040x electronic filing Direct rollovers of 403(b) plan distributions. 1040x electronic filing   You have the option of having your 403(b) plan make the rollover directly to a traditional IRA, Roth IRA, or new plan. 1040x electronic filing Before you receive a distribution, your plan will give you information on this. 1040x electronic filing It is generally to your advantage to choose this option because your plan will not withhold tax on the distribution if you choose it. 1040x electronic filing Distribution received by you. 1040x electronic filing   If you receive a distribution that qualifies to be rolled over, you can roll over all or any part of the distribution. 1040x electronic filing Generally, you will receive only 80% of the distribution because 20% must be withheld. 1040x electronic filing If you roll over only the 80% you receive, you must pay tax on the 20% you did not roll over. 1040x electronic filing You can replace the 20% that was withheld with other money within the 60-day period to make a 100% rollover. 1040x electronic filing Voluntary deductible contributions. 1040x electronic filing   For tax years 1982 through 1986, employees could make deductible contributions to a 403(b) plan under the individual retirement arrangement (IRA) rules instead of deducting contributions to a traditional IRA. 1040x electronic filing   If you made voluntary deductible contributions to a 403(b) plan under these traditional IRA rules, the distribution of all or part of the accumulated deductible contributions may be rolled over if it otherwise qualifies as a distribution you can roll over. 1040x electronic filing Accumulated deductible contributions are the deductible contributions: Plus Income allocable to the contributions, Gain allocable to the contributions, and Minus Expenses and losses allocable to the contributions, and Distributions from the contributions, income, or gain. 1040x electronic filing Excess employer contributions. 1040x electronic filing   The portion of a distribution from a 403(b) plan transferred to a traditional IRA that was previously included in income as excess employer contributions (discussed earlier) is not an eligible rollover distribution. 1040x electronic filing   Its transfer does not affect the rollover treatment of the eligible portion of the transferred amounts. 1040x electronic filing However, the ineligible portion is subject to the traditional IRA contribution limits and may create an excess IRA contribution subject to a 6% excise tax (see chapter 1 of Publication 590). 1040x electronic filing Qualified domestic relations order. 1040x electronic filing   You may be able to roll over tax free all or any part of an eligible rollover distribution from a 403(b) plan that you receive under a qualified domestic relations order (QDRO). 1040x electronic filing If you receive the interest in the 403(b) plan as an employee's spouse or former spouse under a QDRO, all of the rollover rules apply to you as if you were the employee. 1040x electronic filing You can roll over your interest in the plan to a traditional IRA or another 403(b) plan. 1040x electronic filing For more information on the treatment of an interest received under a QDRO, see Publication 575. 1040x electronic filing Spouses of deceased employees. 1040x electronic filing   If you are the spouse of a deceased employee, you can roll over the qualifying distribution attributable to the employee. 1040x electronic filing You can make the rollover to any eligible retirement plan. 1040x electronic filing   After you roll money and other property over from a 403(b) plan to an eligible retirement plan, and you take a distribution from that plan, you will not be eligible to receive the capital gain treatment or the special averaging treatment for the distribution. 1040x electronic filing Second rollover. 1040x electronic filing   If you roll over a qualifying distribution to a traditional IRA, you can, if certain conditions are satisfied, later roll the distribution into another 403(b) plan. 1040x electronic filing For more information, see IRA as a holding account (conduit IRA) for rollovers to other eligible plans in chapter 1 of Publication 590. 1040x electronic filing Nonspouse beneficiary. 1040x electronic filing   A nonspouse beneficiary may make a direct rollover of a distribution from a 403(b) plan of a deceased participant if the rollover is a direct transfer to an inherited IRA established to receive the distribution. 1040x electronic filing If the rollover is a direct trustee-to-trustee transfer to an IRA established to receive the distribution: The transfer will be treated as an eligible rollover distribution. 1040x electronic filing The IRA will be considered an inherited account. 1040x electronic filing The required minimum distribution rules that apply in instances where the participant dies before the entire interest is distributed will apply to the transferred IRA. 1040x electronic filing    For more information on IRAs, see Publication 590. 1040x electronic filing Frozen deposits. 1040x electronic filing   The 60-day period usually allowed for completing a rollover is extended for any time that the amount distributed is a frozen deposit in a financial institution. 1040x electronic filing The 60-day period cannot end earlier than 10 days after the deposit ceases to be a frozen deposit. 1040x electronic filing   A frozen deposit is any deposit that on any day during the 60-day period cannot be withdrawn because: The financial institution is bankrupt or insolvent, or The state where the institution is located has placed limits on withdrawals because one or more banks in the state are (or are about to be) bankrupt or insolvent. 1040x electronic filing Gift Tax If, by choosing or not choosing an election, or option, you provide an annuity for your beneficiary at or after your death, you may have made a taxable gift equal to the value of the annuity. 1040x electronic filing Joint and survivor annuity. 1040x electronic filing   If the gift is an interest in a joint and survivor annuity where only you and your spouse have the right to receive payments, the gift will generally be treated as qualifying for the unlimited marital deduction. 1040x electronic filing More information. 1040x electronic filing   For information on the gift tax, see Publication 559, Survivors, Executors, and Administrators. 1040x electronic filing Prev  Up  Next   Home   More Online Publications
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The 1040x Electronic Filing

1040x electronic filing 5. 1040x electronic filing   Credits Table of Contents Credit for the Elderly or the DisabledCan You Take the Credit? Figuring the Credit Child and Dependent Care Credit Earned Income Credit (EIC)Do You Qualify for the Earned Income Credit (EIC)? Figuring the EIC This chapter briefly discusses the credit for the elderly or disabled, the child and dependent care credit, and the earned income credit. 1040x electronic filing You may be able to reduce your federal income tax by claiming one or more of these credits. 1040x electronic filing Credit for the Elderly or the Disabled This section explains who qualifies for the credit for the elderly or the disabled and how to figure this credit. 1040x electronic filing For more information, see Publication 524, Credit for the Elderly or the Disabled. 1040x electronic filing You can take the credit only if you file Form 1040 or Form 1040A. 1040x electronic filing You cannot take the credit if you file Form 1040EZ or Form 1040NR. 1040x electronic filing Can You Take the Credit? You can take the credit for the elderly or the disabled if you meet both of the following requirements. 1040x electronic filing You are a qualified individual. 1040x electronic filing Your income is not more than certain limits. 1040x electronic filing  You can use Figure 5-A and Figure 5-B as guides to see if you are eligible for the credit. 1040x electronic filing   Qualified Individual You are a qualified individual for this credit if you are a U. 1040x electronic filing S. 1040x electronic filing citizen or resident alien, and either of the following applies. 1040x electronic filing You were age 65 or older at the end of 2013. 1040x electronic filing You were under age 65 at the end of 2013 and all three of the following statements are true. 1040x electronic filing You retired on permanent and total disability (explained later). 1040x electronic filing You received taxable disability income for 2013. 1040x electronic filing On January 1, 2013, you had not reached mandatory retirement age (defined later under Disability income ). 1040x electronic filing Age 65. 1040x electronic filing You are considered to be age 65 on the day before your 65th birthday. 1040x electronic filing Therefore, you are considered to be age 65 at the end of 2013 if you were born before January 2, 1949. 1040x electronic filing Figure 5-A. 1040x electronic filing Are You a Qualified Individual? This image is too large to be displayed in the current screen. 1040x electronic filing Please click the link to view the image. 1040x electronic filing Figure 5-A, Are you a qualified individual? U. 1040x electronic filing S. 1040x electronic filing citizen or resident alien. 1040x electronic filing   You must be a U. 1040x electronic filing S. 1040x electronic filing citizen or resident alien (or be treated as a resident alien) to take the credit. 1040x electronic filing Generally, you cannot take the credit if you were a nonresident alien at any time during the tax year. 1040x electronic filing Exceptions. 1040x electronic filing   You may be able to take the credit if you are a nonresident alien who is married to a U. 1040x electronic filing S. 1040x electronic filing citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U. 1040x electronic filing S. 1040x electronic filing resident alien. 1040x electronic filing If you make that choice, both you and your spouse are taxed on your worldwide income. 1040x electronic filing   If you were a nonresident alien at the beginning of the year and a resident alien at the end of the year, and you were married to a U. 1040x electronic filing S. 1040x electronic filing citizen or resident alien at the end of the year, you may be able to choose to be treated as a U. 1040x electronic filing S. 1040x electronic filing resident alien for the entire year. 1040x electronic filing In that case, you may be allowed to take the credit. 1040x electronic filing   For information on these choices, see chapter 1 of Publication 519, U. 1040x electronic filing S. 1040x electronic filing Tax Guide for Aliens. 1040x electronic filing Married persons. 1040x electronic filing   Generally, if you are married at the end of the tax year, you and your spouse must file a joint return to take the credit. 1040x electronic filing However, if you and your spouse did not live in the same household at any time during the tax year, you can file either a joint return or separate returns and still take the credit. 1040x electronic filing Head of household. 1040x electronic filing   You can file as head of household and qualify to take the credit even if your spouse lived with you during the first 6 months of the year if you meet certain tests. 1040x electronic filing See Publication 524 and Publication 501. 1040x electronic filing Under age 65. 1040x electronic filing   If you are under age 65 at the end of 2013, you can qualify for the credit only if you are retired on permanent and total disability and have taxable disability income (discussed later under Disability income ). 1040x electronic filing You are considered to be under age 65 at the end of 2013 if you were born after January 1, 1949. 1040x electronic filing You are retired on permanent and total disability if: You were permanently and totally disabled when you retired, and You retired on disability before the end of the tax year. 1040x electronic filing   Even if you do not retire formally, you may be considered retired on disability when you have stopped working because of your disability. 1040x electronic filing If you retired on disability before 1977 and were not permanently and totally disabled at the time, you can qualify for the credit if you were permanently and totally disabled on January 1, 1976, or January 1, 1977. 1040x electronic filing Permanent and total disability. 1040x electronic filing   You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of your physical or mental condition. 1040x electronic filing A physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. 1040x electronic filing See Physician's statement , later. 1040x electronic filing Substantial gainful activity. 1040x electronic filing   Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. 1040x electronic filing   Full-time work (or part-time work done at the employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that you are able to engage in substantial gainful activity. 1040x electronic filing   Substantial gainful activity is not work you do to take care of yourself or your home. 1040x electronic filing It is not unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. 1040x electronic filing However, doing this kind of work may show that you are able to engage in substantial gainful activity. 1040x electronic filing    Figure 5-B. 1040x electronic filing Income Limits IF your filing status is. 1040x electronic filing . 1040x electronic filing . 1040x electronic filing THEN even if you qualify (see Figure 5-A), you CANNOT take the credit if: Your adjusted gross income (AGI)* is equal to or more than. 1040x electronic filing . 1040x electronic filing . 1040x electronic filing OR the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than. 1040x electronic filing . 1040x electronic filing . 1040x electronic filing single, head of household, or qualifying widow(er) with dependent child $17,500 $5,000 married filing jointly and only one spouse qualifies in Figure 5-A $20,000 $5,000 married filing jointly and both spouses qualify in Figure 5-A $25,000 $7,500 married filing separately and you lived apart from your spouse for all of 2013 $12,500 $3,750 *AGI is the amount on Form 1040A, line 22, or Form 1040, line 38      The fact that you have not worked for some time is not, of itself, conclusive evidence that you cannot engage in substantial gainful activity. 1040x electronic filing Physician's statement. 1040x electronic filing   If you are under age 65, you must have your physician complete a statement certifying that you were permanently and totally disabled on the date you retired. 1040x electronic filing   You do not have to file this statement with your tax return, but you must keep it for your records. 1040x electronic filing The Instructions for Schedule R (Form 1040A or 1040) include a statement your physician can complete and that you can keep for your records. 1040x electronic filing Veterans. 1040x electronic filing   If the Department of Veterans Affairs (VA) certifies that you are permanently and totally disabled, you can substitute VA Form 21-0172, Certification of Permanent and Total Disability, for the physician's statement you are required to keep. 1040x electronic filing VA Form 21-0172 must be signed by a person authorized by the VA to do so. 1040x electronic filing You can get this form from your local VA regional office. 1040x electronic filing Physician's statement obtained in earlier year. 1040x electronic filing   If you got a physician's statement in an earlier year and, due to your continued disabled condition, you were unable to engage in any substantial gainful activity during 2013, you may not need to get another physician's statement for 2013. 1040x electronic filing For a detailed explanation of the conditions you must meet, see the instructions for Schedule R (Form 1040A or 1040), Part II. 1040x electronic filing If you meet the required conditions, you must check the box on Schedule R (Form 1040A or 1040), Part II, line 2. 1040x electronic filing   If you checked Schedule R (Form 1040A or 1040), Part I, box 4, 5, or 6, print in the space above the box in Part II, line 2, the first name(s) of the spouse(s) for whom the box is checked. 1040x electronic filing Disability income. 1040x electronic filing   If you are under age 65, you must also have taxable disability income to qualify for the credit. 1040x electronic filing   Disability income must meet the following two requirements. 1040x electronic filing It must be paid under your employer's accident or health plan or pension plan. 1040x electronic filing It must be included in your income as wages (or payments in lieu of wages) for the time you are absent from work because of permanent and total disability. 1040x electronic filing Payments that are not disability income. 1040x electronic filing   Any payment you receive from a plan that does not provide for disability retirement is not disability income. 1040x electronic filing Any lump-sum payment for accrued annual leave that you receive when you retire on disability is a salary payment and is not disability income. 1040x electronic filing   For purposes of the credit for the elderly or the disabled, disability income does not include amounts you receive after you reach mandatory retirement age. 1040x electronic filing Mandatory retirement age is the age set by your employer at which you would have had to retire had you not become disabled. 1040x electronic filing Figuring the Credit You can figure the credit yourself, or the IRS will figure it for you. 1040x electronic filing Figuring the credit yourself. 1040x electronic filing   If you figure the credit yourself, fill out the front of Schedule R (Form 1040A or 1040). 1040x electronic filing Next, fill out Schedule R (Form 1040A or 1040), Part III. 1040x electronic filing Credit figured for you. 1040x electronic filing   If you can take the credit and you want the IRS to figure the credit for you, see Publication 524 or the Instructions for Schedule R (Form 1040A or 1040). 1040x electronic filing If you want the IRS to figure your tax, see chapter 30 of Publication 17, Your Federal Income Tax. 1040x electronic filing Child and Dependent Care Credit You may be able to claim this credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. 1040x electronic filing The credit can be up to 35% of your expenses. 1040x electronic filing To qualify, you must pay these expenses so you can work or look for work. 1040x electronic filing If you claim this credit, you must include on your return the name and taxpayer identification number (generally the social security number) of each qualifying person for whom care is provided. 1040x electronic filing If the correct information is not shown, the credit may be reduced or disallowed. 1040x electronic filing You also must show on your return the name, address, and the taxpayer identification number of the person(s) or organization(s) that provided the care. 1040x electronic filing For more information, see Publication 503, Child and Dependent Care Expenses. 1040x electronic filing Earned Income Credit (EIC) The earned income credit (EIC) is a refundable tax credit for certain people who work and have earned income under $51,567. 1040x electronic filing The EIC is available to persons with or without a qualifying child. 1040x electronic filing Credit has no effect on certain welfare benefits. 1040x electronic filing   Any refund you receive because of the EIC cannot be counted as income when determining whether you or anyone else is eligible for benefits or assistance, or how much you or anyone else can receive, under any federal program or under any state or local program financed in whole or in part with federal funds. 1040x electronic filing These programs include the following. 1040x electronic filing Medicaid and supplemental security income (SSI). 1040x electronic filing Supplemental Nutrition Assistance Program (food stamps). 1040x electronic filing Low-income housing. 1040x electronic filing Temporary Assistance for Needy Families (TANF). 1040x electronic filing  In addition, when determining eligibility, the refund cannot be counted as a resource for at least 12 months after you receive it. 1040x electronic filing Check with your local benefit coordinator to find out if your refund will affect your benefits. 1040x electronic filing Do You Qualify for the Earned Income Credit (EIC)? Use Table 5-1 as an initial guide to the rules you must meet in order to qualify for the EIC. 1040x electronic filing The specific rules you must meet depend on whether you have a qualifying child. 1040x electronic filing If you have a qualifying child, the rules in Parts A, B, and D apply to you. 1040x electronic filing If you do not have a qualifying child, the rules in Parts A, C, and D apply to you. 1040x electronic filing  If, after reading all the rules in each part that applies to you, you think you may qualify for the credit, see Publication 596, Earned Income Credit, for more details about the EIC. 1040x electronic filing You can also find information about the EIC in the instructions for Form 1040 (line 64a), Form 1040A (line 38a), or Form 1040EZ (line 8a). 1040x electronic filing The sections that follow provide additional information for some of the rules. 1040x electronic filing Adjusted gross income (AGI). 1040x electronic filing   Under Rule 1, you cannot claim the EIC unless your AGI is less than the applicable limit shown in Part A of Table 5-1. 1040x electronic filing Your AGI is the amount on line 37 (Form 1040), line 21 (Form 1040A), or line 4 (Form 1040EZ). 1040x electronic filing Table 5-1. 1040x electronic filing Earned Income Credit (EIC) in a Nutshell First, you must meet all the rules in this column. 1040x electronic filing Second, you must meet all the rules in one of these columns, whichever applies. 1040x electronic filing Third, you must meet the rule in this column. 1040x electronic filing Part A. 1040x electronic filing  Rules for Everyone Part B. 1040x electronic filing  Rules If You Have a Qualifying Child Part C. 1040x electronic filing  Rules If You Do Not Have a Qualifying Child Part D. 1040x electronic filing  Figuring and Claiming the EIC 1. 1040x electronic filing 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. 1040x electronic filing 2. 1040x electronic filing You must have a valid social security number. 1040x electronic filing  3. 1040x electronic filing Your filing status cannot be “Married filing separately. 1040x electronic filing ” 4. 1040x electronic filing You must be a U. 1040x electronic filing S. 1040x electronic filing citizen or resident alien all year. 1040x electronic filing  5. 1040x electronic filing You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income). 1040x electronic filing  6. 1040x electronic filing Your investment income must be $3,300 or less. 1040x electronic filing  7. 1040x electronic filing You must have earned income. 1040x electronic filing 8. 1040x electronic filing Your child must meet the relationship, age, residency, and joint return tests. 1040x electronic filing  9. 1040x electronic filing Your qualifying child cannot be used by more than one person to claim the EIC. 1040x electronic filing  10. 1040x electronic filing You generally cannot be a qualifying child of another person. 1040x electronic filing 11. 1040x electronic filing You must be at least age 25 but under age 65. 1040x electronic filing  12. 1040x electronic filing You cannot be the dependent of another person. 1040x electronic filing  13. 1040x electronic filing You generally cannot be a qualifying child of another person. 1040x electronic filing  14. 1040x electronic filing You must have lived in the United States more than half of the year. 1040x electronic filing 15. 1040x electronic filing 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. 1040x electronic filing Social security number. 1040x electronic filing   Under Rule 2, you (and your spouse if you are married filing jointly) must have a valid social security number (SSN) issued by the Social Security Administration (SSA). 1040x electronic filing Any qualifying child listed on Schedule EIC also must have a valid SSN. 1040x electronic filing (See Qualifying child , later, if you have a qualifying child. 1040x electronic filing )   If your social security card (or your spouse's if you are married filing jointly) 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. 1040x electronic filing An example of a federally funded benefit is Medicaid. 1040x electronic filing Investment income. 1040x electronic filing   Under Rule 6, you cannot claim the EIC unless your investment income is $3,300 or less. 1040x electronic filing If your investment income is more than $3,300, you cannot claim the credit. 1040x electronic filing For most people, investment income is the total of the following amounts. 1040x electronic filing Taxable interest (line 8a of Form 1040 or 1040A). 1040x electronic filing Tax-exempt interest (line 8b of Form 1040 or 1040A). 1040x electronic filing Dividend income (line 9a of Form 1040 or 1040A). 1040x electronic filing Capital gain net income (line 13 of Form 1040, if more than zero, or line 10 of Form 1040A). 1040x electronic filing  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. 1040x electronic filing   For more information about investment income, see Publication 596, Earned Income Credit. 1040x electronic filing Earned income. 1040x electronic filing   Under Rule 7, you must have earned income to claim the EIC. 1040x electronic filing Under Rule 15, you cannot claim the EIC unless your earned income is less than the applicable limit shown in Table 5-1, Part D. 1040x electronic filing Earned income includes all of the following types of income. 1040x electronic filing Wages, salaries, tips, and other taxable employee pay. 1040x electronic filing Employee pay is earned income only if it is taxable. 1040x electronic filing Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. 1040x electronic filing But there is an exception for nontaxable combat pay, which you can choose to include in earned income. 1040x electronic filing Net earnings from self-employment. 1040x electronic filing Gross income received as a statutory employee. 1040x electronic filing Gross income defined. 1040x electronic filing   Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). 1040x electronic filing Do not include any social security benefits unless (a) you are married filing a separate tax return and you lived with your spouse at any time in 2013, or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). 1040x electronic filing If (a) or (b) applies, see the instructions for Form 1040, lines 20a and 20b to figure the taxable part of social security benefits you must include in gross income. 1040x electronic filing Self-employed persons. 1040x electronic filing   If you are self-employed and your net earnings are $400 or more, be sure to correctly fill out Schedule SE (Form 1040), Self-Employment Tax, and pay the proper amount of self-employment tax. 1040x electronic filing If you do not, you may not get all the credit to which you are entitled. 1040x electronic filing Disability benefits. 1040x electronic filing   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. 1040x electronic filing Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. 1040x electronic filing Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. 1040x electronic filing   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. 1040x electronic filing It does not matter whether you have reached minimum retirement age. 1040x electronic filing If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code J. 1040x electronic filing Income that is not earned income. 1040x electronic filing   Examples of items that are not earned income under Rule 7 include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits — except for payments covered under Disability benefits earlier), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. 1040x electronic filing Do not include any of these items in your earned income. 1040x electronic filing Workfare payments. 1040x electronic filing   Nontaxable workfare payments are not earned income for the EIC. 1040x electronic filing These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if sufficient private sector employment is not available, or (2) community service program activities. 1040x electronic filing Qualifying child. 1040x electronic filing   Under Rule 8, your child is a qualifying child if your child meets four tests. 1040x electronic filing The four tests are: Relationship, Age, Residency, and Joint return. 1040x electronic filing   The four tests are illustrated in Figure 5-C. 1040x electronic filing See Publication 596 for more information about each test. 1040x electronic filing Figure 5-C. 1040x electronic filing Tests for Qualifying Child A qualifying child for the EIC is a child who is your. 1040x electronic filing . 1040x electronic filing . 1040x electronic filing 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) was . 1040x electronic filing . 1040x electronic filing . 1040x electronic filing Under age 19 at the end of 2013 and younger than you (or your spouse if filing jointly) OR 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 the year, regardless of age who. 1040x electronic filing . 1040x electronic filing . 1040x electronic filing Is not filing a joint return for 2013  (or is filing a joint return for 2013 only as a claim for refund of income tax withheld or estimated tax paid) who. 1040x electronic filing . 1040x electronic filing . 1040x electronic filing Lived with you in the United States for more than half of 2013. 1040x electronic filing  If the child did not live with you for the required time, see Publication 596 for more information. 1040x electronic filing Figuring the EIC To figure the amount of your credit, you have two choices. 1040x electronic filing Have the IRS figure the EIC for you. 1040x electronic filing If you want to do this, see IRS Will Figure the EIC for You in Publication 596. 1040x electronic filing Figure the EIC yourself. 1040x electronic filing If you want to do this, see How To Figure the EIC Yourself in Publication 596. 1040x electronic filing Prev  Up  Next   Home   More Online Publications