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2010 Tax Act

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2010 Tax Act

2010 tax act 9. 2010 tax act   Tax Treaty Benefits Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Treaty Income Some Typical Tax Treaty BenefitsPersonal Services Teachers, Professors, and Researchers Employees of Foreign Governments Students, Apprentices, and Trainees Capital Gains Resident Aliens Reporting Treaty Benefits Claimed Introduction A nonresident alien (and certain resident aliens) from a country with which the United States has an income tax treaty may qualify for certain benefits. 2010 tax act Most treaties require that the nonresident alien be a resident of the treaty country to qualify. 2010 tax act However, some treaties require that the nonresident alien be a national or a citizen of the treaty country. 2010 tax act See Table 9-1 for a list of tax treaty countries. 2010 tax act You can generally arrange to have withholding tax reduced or eliminated on wages and other income that are eligible for tax treaty benefits. 2010 tax act See Income Entitled to Tax Treaty Benefits in chapter 8. 2010 tax act Topics - This chapter discusses: Typical tax treaty benefits, How to obtain copies of tax treaties, and How to claim tax treaty benefits on your tax return. 2010 tax act Useful Items - You may want to see: Publication 901 U. 2010 tax act S. 2010 tax act Tax Treaties Form (and Instructions) 1040NR U. 2010 tax act S. 2010 tax act Nonresident Alien Income Tax Return 1040NR-EZ U. 2010 tax act S. 2010 tax act Income Tax Return for Certain Nonresident Aliens With No Dependents 8833 Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) See chapter 12 for information about getting these publications and forms. 2010 tax act Treaty Income A nonresident alien's treaty income is the gross income on which the tax is limited by a tax treaty. 2010 tax act Treaty income includes, for example, dividends from sources in the United States that are subject to tax at a tax treaty rate not to exceed 15%. 2010 tax act Nontreaty income is the gross income of a nonresident alien on which the tax is not limited by a tax treaty. 2010 tax act Figure the tax on treaty income on each separate item of income at the reduced rate that applies to that item under the treaty. 2010 tax act To determine tax on nontreaty income, figure the tax at either the flat 30% rate or the graduated rate, depending upon whether or not the income is effectively connected with your trade or business in the United States. 2010 tax act Your tax liability is the sum of the tax on treaty income plus the tax on nontreaty income, but cannot be more than the tax liability figured as if the tax treaty had not come into effect. 2010 tax act Example. 2010 tax act Arthur Banks is a nonresident alien who is single and a resident of a foreign country that has a tax treaty with the United States. 2010 tax act He received gross income of $25,850 during the tax year from sources within the United States, consisting of the following items: Dividends on which the tax is limited to a 15% rate by the tax treaty $1,400 Compensation for personal services on which the tax is not limited by the tax treaty 24,450 Total gross income $25,850 Arthur was engaged in business in the United States during the tax year. 2010 tax act His dividends are not effectively connected with that business. 2010 tax act He has no deductions other than his own personal exemption. 2010 tax act His tax liability, figured as though the tax treaty had not come into effect, is $3,060 determined as follows: Total compensation $24,450 Less: Personal exemption 3,900 Taxable income $20,550 Tax determined by graduated rate (Tax Table column for single taxpayers) $2,640 Plus: Tax on gross dividends ($1,400 × 30%) 420 Tax determined as though treaty had not come into effect $3,060 Arthur's tax liability, figured by taking into account the reduced rate on dividend income as provided by the tax treaty, is $2,850 determined as follows: Tax determined by graduated rate (same as figured above) $2,640 Plus: Tax on gross dividends ($1,400 × 15%) 210 Tax on compensation and dividends $2,850 His tax liability, therefore, is limited to $2,850, the tax liability figured using the tax treaty rate on the dividends. 2010 tax act Some Typical Tax Treaty Benefits The following paragraphs briefly explain the exemptions that are available under tax treaties for personal services income, remittances, scholarships, fellowships, and capital gain income. 2010 tax act The conditions for claiming the exemptions vary under each tax treaty. 2010 tax act For more information about the conditions under a particular tax treaty, see Publication 901. 2010 tax act Or, you may download the complete text of most U. 2010 tax act S. 2010 tax act tax treaties at IRS. 2010 tax act gov. 2010 tax act Technical explanations for many of those treaties are also available at that site. 2010 tax act Tax treaty benefits also cover income such as dividends, interest, rentals, royalties, pensions, and annuities. 2010 tax act These types of income may be exempt from U. 2010 tax act S. 2010 tax act tax or may be subject to a reduced rate of tax. 2010 tax act For more information, see Publication 901 or the applicable tax treaty. 2010 tax act Personal Services Nonresident aliens from treaty countries who are in the United States for a short stay and also meet certain other requirements may be exempt from tax on their compensation received for personal services performed in the United States. 2010 tax act Many tax treaties require that the nonresident alien claiming this exemption be present in the United States for a total of not more than 183 days during the tax year. 2010 tax act Other tax treaties specify different periods of maximum presence in the United States, such as 180 days or 90 days. 2010 tax act Spending part of a day in the United States counts as a day of presence. 2010 tax act Tax treaties may also require that: The compensation cannot be more than a specific amount (frequently $3,000), and The individual have a foreign employer; that is, an individual, corporation, or entity of a foreign country. 2010 tax act Note. 2010 tax act Under most treaties, income received as an employee (generally designated as dependent personal services) and income received as a self-employed person (generally designated as independent personal services or business income) are treated differently. 2010 tax act Teachers, Professors, and Researchers Under many income tax treaties, nonresident alien teachers or professors who temporarily visit the United States for the primary purpose of teaching at a university or other accredited educational institution are not subject to U. 2010 tax act S. 2010 tax act income tax on compensation received for teaching for the first 2 or 3 years after their arrival in the United States. 2010 tax act Many treaties also provide an exemption for engaging in research. 2010 tax act Generally, the teacher or professor must be in the United States primarily to teach, lecture, instruct, or engage in research. 2010 tax act A substantial part of that person's time must be devoted to those duties. 2010 tax act The normal duties of a teacher or professor include not only formal classroom work involving regularly scheduled lectures, demonstrations, or other student-participation activities, but also the less formal method of presenting ideas in seminars or other informal groups and in joint efforts in the laboratory. 2010 tax act If you entered the United States as a nonresident alien, but are now a resident alien, the treaty exemption may still apply. 2010 tax act See Students, Apprentices, Trainees, Teachers, Professors, and Researchers Who Became Resident Aliens later under Resident Aliens. 2010 tax act Employees of Foreign Governments All treaties have provisions for the exemption of income earned by certain employees of foreign governments. 2010 tax act However, a difference exists among treaties as to who qualifies for this benefit. 2010 tax act Under many treaties, aliens admitted to the United States for permanent residence do not qualify. 2010 tax act Under most treaties, aliens who are not nationals or subjects of the foreign country do not qualify. 2010 tax act Employees of foreign governments should read the pertinent treaty carefully to determine whether they qualify for benefits. 2010 tax act Chapter 10 of this publication also has information for employees of foreign governments. 2010 tax act Students, Apprentices, and Trainees Under some income tax treaties, students, apprentices, and trainees are exempt from tax on remittances received from abroad for study and maintenance. 2010 tax act Also, under some treaties, scholarship and fellowship grants, and a limited amount of compensation received by students, apprentices, and trainees may be exempt from tax. 2010 tax act If you entered the United States as a nonresident alien, but are now a resident alien, the treaty exemption may still apply. 2010 tax act See Students, Apprentices, Trainees, Teachers, Professors, and Researchers Who Became Resident Aliens , later, under Resident Aliens. 2010 tax act Capital Gains Most treaties provide for the exemption of gains from the sale or exchange of personal property. 2010 tax act Generally, gains from the sale or exchange of real property located in the United States are taxable. 2010 tax act Resident Aliens Resident aliens may qualify for tax treaty benefits in the situations discussed below. 2010 tax act U. 2010 tax act S. 2010 tax act Residency Under Tax Treaty “Tie-Breaker” Rule In certain circumstances, individuals who are treated as residents of the United States under an income tax treaty (after application of the so-called “tie-breaker” rule) will be entitled to treaty benefits. 2010 tax act (The “tie-breaker” rule is explained in chapter 1 under Effect of Tax Treaties. 2010 tax act ) If this applies to you, you generally will not need to file a Form 8833 for the income for which treaty benefits are claimed. 2010 tax act This is because the income will typically be of a category for which disclosure on a Form 8833 is waived. 2010 tax act See Reporting Treaty Benefits Claimed . 2010 tax act In most cases, you also will not need to report the income on your Form 1040 because the income will be exempt from U. 2010 tax act S. 2010 tax act tax under the treaty. 2010 tax act However, if the income has been reported as taxable income on a Form W-2, Form 1042-S, Form 1099, or other information return, you should report it on the appropriate line of Form 1040 (for example, line 7 in the case of wages or salaries). 2010 tax act Enter the amount for which treaty benefits are claimed in parentheses on Form 1040, line 21. 2010 tax act Next to the amount write “Exempt income,” the name of the treaty country, and the treaty article that provides the exemption. 2010 tax act On Form 1040, subtract this amount from your income to arrive at total income on Form 1040, line 22. 2010 tax act Also follow the above procedure for income that is subject to a reduced rate of tax, instead of an exemption, under the treaty. 2010 tax act Attach a statement to Form 1040 showing a computation of the tax at the reduced rate, the name of the treaty country, and the treaty article that provides for the reduced tax rate. 2010 tax act Include this tax on Form 1040, line 61. 2010 tax act On the dotted line next to line 61, write “Tax from attached statement” and the amount of the tax. 2010 tax act Example. 2010 tax act Jacques Dubois, who is a resident of the United States under Article 4 of the U. 2010 tax act S. 2010 tax act -France income tax treaty, receives French social security benefits. 2010 tax act Under Article 18(1) of the treaty, French social security benefits are not taxable by the United States. 2010 tax act Mr. 2010 tax act Dubois is not required to file a Form 8833 for his French social security benefits or report the benefits on Form 1040. 2010 tax act Special Rule for Canadian and German Social Security Benefits Under income tax treaties with Canada and Germany, if a U. 2010 tax act S. 2010 tax act resident receives social security benefits from Canada or Germany, those benefits are treated for U. 2010 tax act S. 2010 tax act income tax purposes as if they were received under the social security legislation of the United States. 2010 tax act If you receive social security benefits from Canada or Germany, include them on line 1 of your Social Security Benefits Worksheet for purposes of determining the taxable amount to be reported on Form 1040, line 20b or Form 1040A, line 14b. 2010 tax act You are not required to file a Form 8833 for those benefits. 2010 tax act Students, Apprentices, Trainees, Teachers, Professors, and Researchers Who Became Resident Aliens Generally, you must be a nonresident alien student, apprentice, trainee, teacher, professor, or researcher in order to claim a tax treaty exemption for remittances from abroad for study and maintenance in the United States, for scholarship, fellowship, and research grants, and for wages or other personal service compensation. 2010 tax act Once you become a resident alien, you generally can no longer claim a tax treaty exemption for this income. 2010 tax act However, if you entered the United States as a nonresident alien, but you are now a resident alien for U. 2010 tax act S. 2010 tax act tax purposes, the treaty exemption will continue to apply if the tax treaty's saving clause (explained later) provides an exception for it and you otherwise meet the requirements for the treaty exemption (including any time limit, explained later). 2010 tax act This is true even if you are a nonresident alien electing to file a joint return as explained in chapter 1. 2010 tax act Some exceptions to the saving clause apply to all resident aliens (for example, under the U. 2010 tax act S. 2010 tax act -People's Republic of China treaty); others apply only to resident aliens who are not lawful permanent residents of the United States (green card holders). 2010 tax act If you qualify under an exception to the treaty's saving clause, you can avoid income tax withholding by giving the payor a Form W-9 with the statement required by the Form W-9 instructions. 2010 tax act Saving clause. 2010 tax act   Most tax treaties have a saving clause. 2010 tax act A saving clause preserves or “saves” the right of each country to tax its own residents as if no tax treaty were in effect. 2010 tax act Thus, once you become a resident alien of the United States, you generally lose any tax treaty benefits that relate to your income. 2010 tax act However, many tax treaties have exceptions to the saving clause, which may allow you to continue to claim certain treaty benefits when you become a resident alien. 2010 tax act Read the treaty to find out if it has a saving clause and an exception to it. 2010 tax act Time limit for claiming treaty exemptions. 2010 tax act   Many treaties limit the number of years you can claim a treaty exemption. 2010 tax act For students, apprentices, and trainees, the limit is usually 4–5 years; for teachers, professors, and researchers, the limit is usually 2–3 years. 2010 tax act Once you reach this limit, you can no longer claim the treaty exemption. 2010 tax act See the treaty or Publication 901 for the time limits that apply. 2010 tax act How to report income on your tax return. 2010 tax act   In most cases, you also will not need to report the income on your Form 1040 because the income will be exempt from U. 2010 tax act S. 2010 tax act tax under the treaty. 2010 tax act However, if the income has been reported as taxable income on a Form W-2, Form 1042-S, Form 1099, or other information return, you should report it on the appropriate line of Form 1040 (for example, line 7 in the case of wages, salaries, scholarships, or fellowships). 2010 tax act Enter the amount for which treaty benefits are claimed in parentheses on Form 1040, line 21. 2010 tax act Next to the amount write “Exempt income,” the name of the treaty country, and the treaty article that provides the exemption. 2010 tax act On Form 1040, subtract this amount from your income to arrive at total income on Form 1040, line 22. 2010 tax act Example. 2010 tax act Mr. 2010 tax act Yu, a citizen of the People's Republic of China, entered the United States as a nonresident alien student on January 1, 2009. 2010 tax act He remained a nonresident alien through 2013 and was able to exclude his scholarship from U. 2010 tax act S. 2010 tax act tax in those years under Article 20 of the U. 2010 tax act S. 2010 tax act -People's Republic of China income tax treaty. 2010 tax act On January 1, 2014, he became a resident alien under the substantial presence test because his stay in the United States exceeded 5 years. 2010 tax act Even though Mr. 2010 tax act Yu is now a resident alien, the provisions of Article 20 still apply because of the exception to the saving clause in paragraph 2 of the Protocol to the U. 2010 tax act S. 2010 tax act -People's Republic of China treaty dated April 30, 1984. 2010 tax act Mr. 2010 tax act Yu should submit Form W-9 and the required statement to the payor. 2010 tax act Reporting Treaty Benefits Claimed If you claim treaty benefits that override or modify any provision of the Internal Revenue Code, and by claiming these benefits your tax is, or might be, reduced, you must attach a fully completed Form 8833 to your tax return. 2010 tax act See below, for the situations where you are not required to file Form 8833. 2010 tax act You must file a U. 2010 tax act S. 2010 tax act tax return and Form 8833 if you claim the following treaty benefits. 2010 tax act You claim a reduction or modification in the taxation of gain or loss from the disposition of a U. 2010 tax act S. 2010 tax act real property interest based on a treaty. 2010 tax act You claim a credit for a specific foreign tax for which foreign tax credit would not be allowed by the Internal Revenue Code. 2010 tax act You receive payments or income items totaling more than $100,000 and you determine your country of residence under a treaty and not under the rules for residency discussed in chapter 1. 2010 tax act These are the more common situations for which Form 8833 is required. 2010 tax act Exceptions. 2010 tax act   You do not have to file Form 8833 for any of the following situations. 2010 tax act You claim a reduced rate of withholding tax under a treaty on interest, dividends, rent, royalties, or other fixed or determinable annual or periodic income ordinarily subject to the 30% rate. 2010 tax act You claim a treaty reduces or modifies the taxation of income from dependent personal services, pensions, annuities, social security and other public pensions, or income of artists, athletes, students, trainees, or teachers. 2010 tax act This includes taxable scholarship and fellowship grants. 2010 tax act You claim a reduction or modification of taxation of income under an International Social Security Agreement or a Diplomatic or Consular Agreement. 2010 tax act You are a partner in a partnership or a beneficiary of an estate or trust and the partnership, estate, or trust reports the required information on its return. 2010 tax act The payments or items of income that are otherwise required to be disclosed total no more than $10,000. 2010 tax act You are claiming treaty benefits for amounts that are: Reported to you on Form 1042-S and Received by you: As a related party from a reporting corporation within the meaning of Internal Revenue Code section 6038A (relating to information returns on Form 5472 filed by U. 2010 tax act S. 2010 tax act corporations that are 25-percent owned by a foreign person), or As a beneficial owner that is a direct account holder of a U. 2010 tax act S. 2010 tax act financial institution or qualified intermediary, or a direct partner, beneficiary, or owner of a withholding foreign partnership or trust, from that U. 2010 tax act S. 2010 tax act financial institution, qualified intermediary, or withholding foreign partnership or trust. 2010 tax act The exception described in (6) above does not apply to any amounts for which a treaty-based return disclosure is specifically required by the Form 8833 instructions. 2010 tax act Penalty for failure to provide required information on Form 8833. 2010 tax act   If you are required to report the treaty benefits but do not, you may be subject to a penalty of $1,000 for each failure. 2010 tax act Additional information. 2010 tax act   For additional information, see section 301. 2010 tax act 6114-1(c) of the Income Tax Regulations. 2010 tax act Table 9-1. 2010 tax act Table of Tax Treaties (Updated through December 31, 2013) Country Official Text  Symbol1 General  Effective Date Citation Applicable Treasury Explanations  or Treasury Decision (T. 2010 tax act D. 2010 tax act ) Australia TIAS 10773 Dec. 2010 tax act 1, 1983 1986-2 C. 2010 tax act B. 2010 tax act 220 1986-2 C. 2010 tax act B. 2010 tax act 246 Protocol TIAS Jan. 2010 tax act 1, 2004     Austria TIAS Jan. 2010 tax act 1, 1999     Bangladesh TIAS Jan. 2010 tax act 1, 2007     Barbados TIAS 11090 Jan. 2010 tax act 1, 1984 1991-2 C. 2010 tax act B. 2010 tax act 436 1991-2 C. 2010 tax act B. 2010 tax act 466 Protocol TIAS Jan. 2010 tax act 1, 1994     Protocol TIAS Jan. 2010 tax act 1, 2005     Belgium TIAS Jan. 2010 tax act 1, 2008     Bulgaria TIAS Jan. 2010 tax act 1, 2009     Canada2 TIAS 11087 Jan. 2010 tax act 1, 1985 1986-2 C. 2010 tax act B. 2010 tax act 258 1987-2 C. 2010 tax act B. 2010 tax act 298 Protocol TIAS Jan. 2010 tax act 1, 1996     Protocol TIAS Dec. 2010 tax act 16, 1997     Protocol TIAS Jan. 2010 tax act 1, 2009     China, People's Republic of TIAS 12065 Jan. 2010 tax act 1, 1987 1988-1 C. 2010 tax act B. 2010 tax act 414 1988-1 C. 2010 tax act B. 2010 tax act 447 Commonwealth of Independent States3 TIAS 8225 Jan. 2010 tax act 1, 1976 1976-2 C. 2010 tax act B. 2010 tax act 463 1976-2 C. 2010 tax act B. 2010 tax act 475 Cyprus TIAS 10965 Jan. 2010 tax act 1, 1986 1989-2 C. 2010 tax act B. 2010 tax act 280 1989-2 C. 2010 tax act B. 2010 tax act 314 Czech Republic TIAS Jan. 2010 tax act 1, 1993     Denmark TIAS Jan. 2010 tax act 1, 2001     Protocol TIAS Jan. 2010 tax act 1, 2008     Egypt TIAS 10149 Jan. 2010 tax act 1, 1982 1982-1 C. 2010 tax act B. 2010 tax act 219 1982-1 C. 2010 tax act B. 2010 tax act 243 Estonia TIAS Jan. 2010 tax act 1, 2000     Finland TIAS 12101 Jan. 2010 tax act 1, 1991     Protocol TIAS Jan. 2010 tax act 1, 2008     France TIAS Jan. 2010 tax act 1, 1996     Protocol TIAS Jan. 2010 tax act 1, 2007     Protocol TIAS Jan. 2010 tax act 1, 2010     Germany TIAS Jan. 2010 tax act 1, 1990     Protocol TIAS Jan. 2010 tax act 1, 2008     Greece TIAS 2902 Jan. 2010 tax act 1, 1953 1958-2 C. 2010 tax act B. 2010 tax act 1054 T. 2010 tax act D. 2010 tax act 6109, 1954-2 C. 2010 tax act B. 2010 tax act 638 Hungary TIAS 9560 Jan. 2010 tax act 1, 1980 1980-1 C. 2010 tax act B. 2010 tax act 333 1980-1 C. 2010 tax act B. 2010 tax act 354 Iceland TIAS Jan. 2010 tax act 1, 2009     India TIAS Jan. 2010 tax act 1, 1991     Indonesia TIAS 11593 Jan. 2010 tax act 1, 1990     Ireland TIAS Jan. 2010 tax act 1, 1998     Israel TIAS Jan. 2010 tax act 1, 1995     Italy TIAS Jan. 2010 tax act 1, 2010     Jamaica TIAS 10207 Jan. 2010 tax act 1, 1982 1982-1 C. 2010 tax act B. 2010 tax act 257 1982-1 C. 2010 tax act B. 2010 tax act 291 Japan TIAS Jan. 2010 tax act 1, 2005     Kazakhstan TIAS Jan. 2010 tax act 1, 1996     Korea, South TIAS 9506 Jan. 2010 tax act 1, 1980 1979-2 C. 2010 tax act B. 2010 tax act 435 1979-2 C. 2010 tax act B. 2010 tax act 458 Latvia TIAS Jan. 2010 tax act 1, 2000     Lithuania TIAS Jan. 2010 tax act 1, 2000     Luxembourg TIAS Jan. 2010 tax act 1, 2001     Malta TIAS Jan. 2010 tax act 1, 2011     Mexico TIAS Jan. 2010 tax act 1, 1994 1994-2 C. 2010 tax act B. 2010 tax act 424 1994-2 C. 2010 tax act B. 2010 tax act 489 Protocol TIAS Oct. 2010 tax act 26, 1995     Protocol TIAS Jan. 2010 tax act 1, 2004     Morocco TIAS 10195 Jan. 2010 tax act 1, 1981 1982-2 C. 2010 tax act B. 2010 tax act 405 1982-2 C. 2010 tax act B. 2010 tax act 427 Netherlands TIAS Jan. 2010 tax act 1, 1994     Protocol TIAS Jan. 2010 tax act 1, 2005     New Zealand TIAS 10772 Nov. 2010 tax act 2, 1983 1990-2 C. 2010 tax act B. 2010 tax act 274 1990-2 C. 2010 tax act B. 2010 tax act 303 Protocol TIAS Jan. 2010 tax act 1, 2011     Norway TIAS 7474 Jan. 2010 tax act 1, 1971 1973-1 C. 2010 tax act B. 2010 tax act 669 1973-1 C. 2010 tax act B. 2010 tax act 693 Protocol TIAS 10205 Jan. 2010 tax act 1, 1982 1982-2 C. 2010 tax act B. 2010 tax act 440 1982-2 C. 2010 tax act B. 2010 tax act 454 Pakistan TIAS 4232 Jan. 2010 tax act 1, 1959 1960-2 C. 2010 tax act B. 2010 tax act 646 T. 2010 tax act D. 2010 tax act 6431, 1960-1 C. 2010 tax act B. 2010 tax act 755 Philippines TIAS 10417 Jan. 2010 tax act 1, 1983 1984-2 C. 2010 tax act B. 2010 tax act 384 1984-2 C. 2010 tax act B. 2010 tax act 412 Poland TIAS 8486 Jan. 2010 tax act 1, 1974 1977-1 C. 2010 tax act B. 2010 tax act 416 1977-1 C. 2010 tax act B. 2010 tax act 427 Portugal TIAS Jan. 2010 tax act 1, 1996     Romania TIAS 8228 Jan. 2010 tax act 1, 1974 1976-2 C. 2010 tax act B. 2010 tax act 492 1976-2 C. 2010 tax act B. 2010 tax act 504 Russia TIAS Jan. 2010 tax act 1, 1994     Slovak Republic TIAS Jan. 2010 tax act 1, 1993     Slovenia TIAS Jan. 2010 tax act 1, 2002     South Africa TIAS Jan. 2010 tax act 1, 1998     Spain TIAS Jan. 2010 tax act 1, 1991     Sri Lanka TIAS Jan. 2010 tax act 1, 2004     Sweden TIAS Jan. 2010 tax act 1, 1996     Protocol TIAS Jan. 2010 tax act 1, 2007     Switzerland TIAS Jan. 2010 tax act 1, 1998     Thailand TIAS Jan. 2010 tax act 1, 1998     Trinidad and Tobago TIAS 7047 Jan. 2010 tax act 1, 1970 1971-2 C. 2010 tax act B. 2010 tax act 479   Tunisia TIAS Jan. 2010 tax act 1, 1990     Turkey TIAS Jan. 2010 tax act 1, 1998     Ukraine TIAS Jan. 2010 tax act 1, 2001     United Kingdom TIAS Jan. 2010 tax act 1, 2004     Venezuela TIAS Jan. 2010 tax act 1, 2000     1(TIAS) Treaties and Other International Act Series 2Information on the treaty can be found in Publication 597, Information on the United States-Canada Income Tax Treaty. 2010 tax act 3The U. 2010 tax act S. 2010 tax act -U. 2010 tax act S. 2010 tax act S. 2010 tax act R. 2010 tax act income tax treaty applies to the countries of Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan. 2010 tax act Prev  Up  Next   Home   More Online Publications
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Understanding Your CP75C Notice

You were banned from claiming the Earned Income Credit (EIC) in a prior tax year due to your intentional disregard of the rules or a fraudulent claim. Since your ban is still in effect, we disallowed the EIC for your current tax year.


What you need to do

  • You don’t need to take further action.

You may want to

  • Review this notice with your tax preparer.
  • Review the rules for claiming EIC
  • Call us for assistance at the toll-free telephone number listed in the top right corner of your notice

Answers to Common Questions

What do I need to send?
If you believe we incorrectly applied the ban, you must provide documentation to show that you didn't intentionally disregard the EIC rules for the year we imposed the ban.

Can I file my tax return while I am being audited?
Yes, you should continue to file all required tax returns before the due date to avoid additional penalties and interest.


Tips for next year

If you are banned from claiming the EIC, you won’t be allowed to claim the credit until the year stated on your notice.

Page Last Reviewed or Updated: 07-Mar-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The 2010 Tax Act

2010 tax act Publication 554 - Introductory Material Table of Contents What's New Reminders IntroductionVolunteer Income Tax Assistance and Tax Counseling for the Elderly. 2010 tax act Ordering forms and publications. 2010 tax act Tax questions. 2010 tax act What's New Alternative minimum tax exemption increased. 2010 tax act  The AMT exemption amount has increased to $51,900 ($80,800 if married filing jointly or qualifying widow(er); $40,400 if married filing separately). 2010 tax act Earned income credit. 2010 tax act  The maximum amount of income you can earn and still get the credit has increased. 2010 tax act You may be able to take the credit if you earn less than: $14,340 ($19,680 if married filing jointly), do not have a qualifying child, and are at least 25 years old and under 65, $37,870 ($43,210 if married filing jointly), and you have one qualifying child, $43,038 ($48,378 if married filing jointly), and you have two qualifying children, or $46,227 ($51,567 if married filing jointly), and you have three or more qualifying children. 2010 tax act For more information, see Earned Income Credit , later. 2010 tax act Exemption phaseout. 2010 tax act  You lose at least part of the benefit of your exemptions if your adjusted gross income is above a certain amount. 2010 tax act For 2013, the phaseout begins at $150,000 for married individuals filing separate returns; $250,000 for single individuals; $275,000 for heads of household; and $300,000 for married individuals filing joint returns or qualifying widow(er)s. 2010 tax act For more information, see Phaseout of Exemptions in Publication 501. 2010 tax act Limit on itemized deductions. 2010 tax act   Beginning January 1, 2013, itemized deductions for taxpayers with adjusted gross incomes above $150,000 may be reduced. 2010 tax act See Overall limitation , later. 2010 tax act Medical and dental expenses. 2010 tax act   Beginning January 1, 2013, taxpayers 65 and older can deduct only the part of their medical and dental expenses that exceed 7. 2010 tax act 5% of their adjusted gross income (10% for taxpayers under 65). 2010 tax act Same-sex marriages. 2010 tax act  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. 2010 tax act For more information, see Publication 501. 2010 tax act Reminders Future developments. 2010 tax act  For the latest information about developments related to Publication 554, such as legislation enacted after it was published, go to www. 2010 tax act irs. 2010 tax act gov/pub554. 2010 tax act Tax return preparers. 2010 tax act  Choose your preparer carefully. 2010 tax act If you pay someone to prepare your return, the preparer is required, under the law, to sign the return and fill in the other blanks in the Paid Preparer's area of your return. 2010 tax act Remember, however, that you are still responsible for the accuracy of every item entered on your return. 2010 tax act If there is any underpayment, you are responsible for paying it, plus any interest and penalty that may be due. 2010 tax act Sale of home by surviving spouse. 2010 tax act  If you are an unmarried widow or widower, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. 2010 tax act For more information, see Sale of Home , later. 2010 tax act Third party designee. 2010 tax act  You can check the “Yes” box in the Third Party Designee area of your return to authorize the IRS to discuss your return with your preparer, a friend, family member, or any other person you choose. 2010 tax act This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the processing of your return. 2010 tax act It also allows your designee to perform certain actions. 2010 tax act See your income tax return instructions for details. 2010 tax act Employment tax withholding. 2010 tax act  Your wages are subject to withholding for income tax, social security tax, and Medicare tax even if you are receiving social security benefits. 2010 tax act Photographs of missing children. 2010 tax act  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 2010 tax act Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 2010 tax act You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 2010 tax act Introduction The purpose of this publication is to provide a general overview of selected topics that are of interest to older taxpayers. 2010 tax act The publication will help you determine if you need to file a return and, if so, what items to report on your return. 2010 tax act Each topic is discussed only briefly, so you will find references to other free IRS publications that provide more detail on these topics if you need it. 2010 tax act Table I has a list of questions you may have about filing your federal tax return. 2010 tax act To the right of each question is the location of the answer in this publication. 2010 tax act Also, at the back of this publication there is an index to help you search for the topic you need. 2010 tax act While most federal income tax laws apply equally to all taxpayers, regardless of age, there are some provisions that give special treatment to older taxpayers. 2010 tax act The following are some examples. 2010 tax act Higher gross income threshold for filing. 2010 tax act You must be age 65 or older at the end of the year to get this benefit. 2010 tax act You are considered age 65 on the day before your 65th birthday. 2010 tax act Therefore, you are considered age 65 at the end of the year if your 65th birthday is on or before January 1 of the following year. 2010 tax act Higher standard deduction. 2010 tax act If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. 2010 tax act You are considered age 65 at the end of the year if your 65th birthday is on or before January 1 of the following year. 2010 tax act Credit for the elderly or the disabled. 2010 tax act If you qualify, you may benefit from the credit for the elderly or the disabled. 2010 tax act To determine if you qualify and how to figure this credit, see Credit for the Elderly or the Disabled , later. 2010 tax act Return preparation assistance. 2010 tax act   The IRS wants to make it easier for you to file your federal tax return. 2010 tax act You may find it helpful to visit a Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), or American Association of Retired Persons (AARP) Tax-Aide site near you. 2010 tax act Volunteer Income Tax Assistance and Tax Counseling for the Elderly. 2010 tax act   These programs provide free help for low-income taxpayers and taxpayers age 60 or older to fill in and file their returns. 2010 tax act For the VITA/TCE site nearest you, contact your local IRS office. 2010 tax act For more information, see Free help with your tax return under How To Get Tax Help. 2010 tax act   For the location of an AARP Tax-Aide site in your community, call 1-888-227-7669. 2010 tax act When asked, be ready to press in or speak your 5-digit ZIP code. 2010 tax act Or, you can visit their website on the Internet at www. 2010 tax act aarp. 2010 tax act org/money/taxaide. 2010 tax act Comments and suggestions. 2010 tax act   We welcome your comments about this publication and your suggestions for future editions. 2010 tax act   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 2010 tax act NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 2010 tax act Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 2010 tax act   You can send your comments from www. 2010 tax act irs. 2010 tax act gov/formspubs/. 2010 tax act Click on “More Information” and then on “Comment on Tax Forms and Publications. 2010 tax act ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 2010 tax act Ordering forms and publications. 2010 tax act   Visit www. 2010 tax act irs. 2010 tax act gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 business days after your request is received. 2010 tax act Internal Revenue Service 1201 N. 2010 tax act Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 2010 tax act   If you have a tax question, check the information available on IRS. 2010 tax act gov or call 1-800-829-1040. 2010 tax act We cannot answer tax questions sent to either of the above addresses. 2010 tax act Table I. 2010 tax act What You Should Know About Federal Taxes Note. 2010 tax act The following is a list of questions you may have about filling out your federal income tax return. 2010 tax act  To the right of each question is the location of the answer in this publication. 2010 tax act What I Should Know Where To Find the Answer Do I need to file a return? See chapter 1. 2010 tax act Is my income taxable or nontaxable?  If it is nontaxable, must I still report it? See chapter 2. 2010 tax act How do I report benefits I received from the Social Security Administration or the Railroad Retirement Board?  Are these benefits taxable? See Social Security and Equivalent Railroad Retirement Benefits in chapter 2. 2010 tax act Must I report the sale of my home?  If I had a gain, is any part of it taxable? See Sale of Home in chapter 2. 2010 tax act What are some of the items that I can deduct to reduce my income? See chapters 3 and 4. 2010 tax act How do I report the amounts I set aside for my IRA? See Individual Retirement Arrangement (IRA) Contributions and Deductions in chapter 3. 2010 tax act Would it be better for me to claim the standard deduction or itemize my deductions? See chapter 4. 2010 tax act What are some of the credits I can claim to reduce my tax? See chapter 5 for discussions on the credit for the elderly or the disabled, the child and dependent care credit, and the earned income credit. 2010 tax act Must I make estimated tax payments? See chapter 6. 2010 tax act How do I contact the IRS or get more information? See chapter 7. 2010 tax act Prev  Up  Next   Home   More Online Publications