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2010 Tax File Free

2010 tax file free 2. 2010 tax file free   Filing Status Table of Contents What's New Introduction Useful Items - You may want to see: Marital StatusDivorced persons. 2010 tax file free Divorce and remarriage. 2010 tax file free Annulled marriages. 2010 tax file free Head of household or qualifying widow(er) with dependent child. 2010 tax file free Considered married. 2010 tax file free Same-sex marriage. 2010 tax file free Spouse died during the year. 2010 tax file free Married persons living apart. 2010 tax file free Single Married Filing JointlyFiling a Joint Return Married Filing SeparatelySpecial Rules Head of HouseholdConsidered Unmarried Keeping Up a Home Qualifying Person Qualifying Widow(er) With Dependent Child What's New Filing status for same-sex married couples. 2010 tax file free  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 file free See Same-sex marriage under Marital Status, later. 2010 tax file free Introduction This chapter helps you determine which filing status to use. 2010 tax file free There are five filing statuses. 2010 tax file free Single. 2010 tax file free Married Filing Jointly. 2010 tax file free Married Filing Separately. 2010 tax file free Head of Household. 2010 tax file free Qualifying Widow(er) With Dependent Child. 2010 tax file free If more than one filing status applies to you, choose the one that will give you the lowest tax. 2010 tax file free You must determine your filing status before you can determine whether you must file a tax return (chapter 1), your standard deduction (chapter 20), and your tax (chapter 30). 2010 tax file free You also use your filing status to determine whether you are eligible to claim certain deductions and credits. 2010 tax file free Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 519 U. 2010 tax file free S. 2010 tax file free Tax Guide for Aliens 555 Community Property Marital Status In general, your filing status depends on whether you are considered unmarried or married. 2010 tax file free Unmarried persons. 2010 tax file free   You are considered unmarried for the whole year if, on the last day of your tax year, you are unmarried or legally separated from your spouse under a divorce or separate maintenance decree. 2010 tax file free State law governs whether you are married or legally separated under a divorce or separate maintenance decree. 2010 tax file free Divorced persons. 2010 tax file free   If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year. 2010 tax file free Divorce and remarriage. 2010 tax file free   If you obtain a divorce for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intend to and do, in fact, remarry each other in the next tax year, you and your spouse must file as married individuals in both years. 2010 tax file free Annulled marriages. 2010 tax file free    If you obtain a court decree of annulment, which holds that no valid marriage ever existed, you are considered unmarried even if you filed joint returns for earlier years. 2010 tax file free You must file Form 1040X, Amended U. 2010 tax file free S. 2010 tax file free Individual Income Tax Return, claiming single or head of household status for all tax years that are affected by the annulment and are not closed by the statute of limitations for filing a tax return. 2010 tax file free Generally, for a credit or refund, you must file Form 1040X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. 2010 tax file free If you filed your original return early (for example, March 1), your return is considered filed on the due date (generally April 15). 2010 tax file free However, if you had an extension to file (for example, until October 15) but you filed earlier and we received it on July 1, your return is considered filed on July 1. 2010 tax file free Head of household or qualifying widow(er) with dependent child. 2010 tax file free   If you are considered unmarried, you may be able to file as a head of household or as a qualifying widow(er) with a dependent child. 2010 tax file free See Head of Household and Qualifying Widow(er) With Dependent Child to see if you qualify. 2010 tax file free Married persons. 2010 tax file free   If you are considered married, you and your spouse can file a joint return or separate returns. 2010 tax file free Considered married. 2010 tax file free   You are considered married for the whole year if, on the last day of your tax year, you and your spouse meet any one of the following tests. 2010 tax file free You are married and living together as a married couple. 2010 tax file free You are living together in a common law marriage recognized in the state where you now live or in the state where the common law marriage began. 2010 tax file free You are married and living apart, but not legally separated under a decree of divorce or separate maintenance. 2010 tax file free You are separated under an interlocutory (not final) decree of divorce. 2010 tax file free Same-sex marriage. 2010 tax file free   For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. 2010 tax file free The term “spouse” includes an individual married to a person of the same sex if the couple is lawfully married under state (or foreign) law. 2010 tax file free However, individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not considered a marriage under state (or foreign) law are not considered married for federal tax purposes. 2010 tax file free For more details, see Publication 501. 2010 tax file free Spouse died during the year. 2010 tax file free   If your spouse died during the year, you are considered married for the whole year for filing status purposes. 2010 tax file free   If you did not remarry before the end of the tax year, you can file a joint return for yourself and your deceased spouse. 2010 tax file free For the next 2 years, you may be entitled to the special benefits described later under Qualifying Widow(er) With Dependent Child . 2010 tax file free   If you remarried before the end of the tax year, you can file a joint return with your new spouse. 2010 tax file free Your deceased spouse's filing status is married filing separately for that year. 2010 tax file free Married persons living apart. 2010 tax file free   If you live apart from your spouse and meet certain tests, you may be able to file as head of household even if you are not divorced or legally separated. 2010 tax file free If you qualify to file as head of household instead of married filing separately, your standard deduction will be higher. 2010 tax file free Also, your tax may be lower, and you may be able to claim the earned income credit. 2010 tax file free See Head of Household , later. 2010 tax file free Single Your filing status is single if you are considered unmarried and you do not qualify for another filing status. 2010 tax file free To determine your marital status, see Marital Status , earlier. 2010 tax file free Widow(er). 2010 tax file free   Your filing status may be single if you were widowed before January 1, 2013, and did not remarry before the end of 2013. 2010 tax file free You may, however, be able to use another filing status that will give you a lower tax. 2010 tax file free See Head of Household and Qualifying Widow(er) With Dependent Child , later, to see if you qualify. 2010 tax file free How to file. 2010 tax file free   You can file Form 1040. 2010 tax file free If you have taxable income of less than $100,000, you may be able to file Form 1040A. 2010 tax file free If, in addition, you have no dependents, and are under 65 and not blind, and meet other requirements, you can file Form 1040EZ. 2010 tax file free If you file Form 1040A or Form 1040, show your filing status as single by checking the box on line 1. 2010 tax file free Use the Single column of the Tax Table or Section A of the Tax Computation Worksheet to figure your tax. 2010 tax file free Married Filing Jointly You can choose married filing jointly as your filing status if you are considered married and both you and your spouse agree to file a joint return. 2010 tax file free On a joint return, you and your spouse report your combined income and deduct your combined allowable expenses. 2010 tax file free You can file a joint return even if one of you had no income or deductions. 2010 tax file free If you and your spouse decide to file a joint return, your tax may be lower than your combined tax for the other filing statuses. 2010 tax file free Also, your standard deduction (if you do not itemize deductions) may be higher, and you may qualify for tax benefits that do not apply to other filing statuses. 2010 tax file free If you and your spouse each have income, you may want to figure your tax both on a joint return and on separate returns (using the filing status of married filing separately). 2010 tax file free You can choose the method that gives the two of you the lower combined tax. 2010 tax file free How to file. 2010 tax file free   If you file as married filing jointly, you can use Form 1040. 2010 tax file free If you and your spouse have taxable income of less than $100,000, you may be able to file Form 1040A. 2010 tax file free If, in addition, you and your spouse have no dependents, are both under 65 and not blind, and meet other requirements, you can file Form 1040EZ. 2010 tax file free If you file Form 1040 or Form 1040A, show this filing status by checking the box on line 2. 2010 tax file free Use the Married filing jointly column of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax. 2010 tax file free Spouse died. 2010 tax file free   If your spouse died during the year, you are considered married for the whole year and can choose married filing jointly as your filing status. 2010 tax file free See Spouse died during the year under Marital Status, earlier, for more information. 2010 tax file free   If your spouse died in 2014 before filing a 2013 return, you can choose married filing jointly as your filing status on your 2013 return. 2010 tax file free Divorced persons. 2010 tax file free   If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year and you cannot choose married filing jointly as your filing status. 2010 tax file free Filing a Joint Return Both you and your spouse must include all of your income, exemptions, and deductions on your joint return. 2010 tax file free Accounting period. 2010 tax file free   Both of you must use the same accounting period, but you can use different accounting methods. 2010 tax file free See Accounting Periods and Accounting Methods in chapter 1. 2010 tax file free Joint responsibility. 2010 tax file free   Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. 2010 tax file free This means that if one spouse does not pay the tax due, the other may have to. 2010 tax file free Or, if one spouse does not report the correct tax, both spouses may be responsible for any additional taxes assessed by the IRS. 2010 tax file free One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse. 2010 tax file free You may want to file separately if: You believe your spouse is not reporting all of his or her income, or You do not want to be responsible for any taxes due if your spouse does not have enough tax withheld or does not pay enough estimated tax. 2010 tax file free Divorced taxpayer. 2010 tax file free   You may be held jointly and individually responsible for any tax, interest, and penalties due on a joint return filed before your divorce. 2010 tax file free This responsibility may apply even if your divorce decree states that your former spouse will be responsible for any amounts due on previously filed joint returns. 2010 tax file free Relief from joint responsibility. 2010 tax file free   In some cases, one spouse may be relieved of joint responsibility for tax, interest, and penalties on a joint return for items of the other spouse that were incorrectly reported on the joint return. 2010 tax file free You can ask for relief no matter how small the liability. 2010 tax file free   There are three types of relief available. 2010 tax file free Innocent spouse relief. 2010 tax file free Separation of liability (available only to joint filers who are divorced, widowed, legally separated, or have not lived together for the 12 months ending on the date the election for this relief is filed). 2010 tax file free Equitable relief. 2010 tax file free    You must file Form 8857, Request for Innocent Spouse Relief, to request relief from joint responsibility. 2010 tax file free Publication 971, Innocent Spouse Relief, explains these kinds of relief and who may qualify for them. 2010 tax file free Signing a joint return. 2010 tax file free   For a return to be considered a joint return, both spouses generally must sign the return. 2010 tax file free Spouse died before signing. 2010 tax file free   If your spouse died before signing the return, the executor or administrator must sign the return for your spouse. 2010 tax file free If neither you nor anyone else has yet been appointed as executor or administrator, you can sign the return for your spouse and enter “Filing as surviving spouse” in the area where you sign the return. 2010 tax file free Spouse away from home. 2010 tax file free   If your spouse is away from home, you should prepare the return, sign it, and send it to your spouse to sign so that it can be filed on time. 2010 tax file free Injury or disease prevents signing. 2010 tax file free   If your spouse cannot sign because of disease or injury and tells you to sign for him or her, you can sign your spouse's name in the proper space on the return followed by the words “By (your name), Husband (or Wife). 2010 tax file free ” Be sure to also sign in the space provided for your signature. 2010 tax file free Attach a dated statement, signed by you, to the return. 2010 tax file free The statement should include the form number of the return you are filing, the tax year, and the reason your spouse cannot sign, and should state that your spouse has agreed to your signing for him or her. 2010 tax file free Signing as guardian of spouse. 2010 tax file free   If you are the guardian of your spouse who is mentally incompetent, you can sign the return for your spouse as guardian. 2010 tax file free Spouse in combat zone. 2010 tax file free   You can sign a joint return for your spouse if your spouse cannot sign because he or she is serving in a combat zone (such as the Persian Gulf Area, Serbia, Montenegro, Albania, or Afghanistan), even if you do not have a power of attorney or other statement. 2010 tax file free Attach a signed statement to your return explaining that your spouse is serving in a combat zone. 2010 tax file free For more information on special tax rules for persons who are serving in a combat zone, or who are in missing status as a result of serving in a combat zone, see Publication 3, Armed Forces' Tax Guide. 2010 tax file free Other reasons spouse cannot sign. 2010 tax file free    If your spouse cannot sign the joint return for any other reason, you can sign for your spouse only if you are given a valid power of attorney (a legal document giving you permission to act for your spouse). 2010 tax file free Attach the power of attorney (or a copy of it) to your tax return. 2010 tax file free You can use Form 2848, Power of Attorney and Declaration of Representative. 2010 tax file free Nonresident alien or dual-status alien. 2010 tax file free   Generally, a married couple cannot file a joint return if either one is a nonresident alien at any time during the tax year. 2010 tax file free However, if one spouse was a nonresident alien or dual-status alien who was married to a U. 2010 tax file free S. 2010 tax file free citizen or resident alien at the end of the year, the spouses can choose to file a joint return. 2010 tax file free If you do file a joint return, you and your spouse are both treated as U. 2010 tax file free S. 2010 tax file free residents for the entire tax year. 2010 tax file free See chapter 1 of Publication 519. 2010 tax file free Married Filing Separately You can choose married filing separately as your filing status if you are married. 2010 tax file free This filing status may benefit you if you want to be responsible only for your own tax or if it results in less tax than filing a joint return. 2010 tax file free If you and your spouse do not agree to file a joint return, you must use this filing status unless you qualify for head of household status, discussed later. 2010 tax file free You may be able to choose head of household filing status if you are considered unmarried because you live apart from your spouse and meet certain tests (explained later, under Head of Household ). 2010 tax file free This can apply to you even if you are not divorced or legally separated. 2010 tax file free If you qualify to file as head of household, instead of as married filing separately, your tax may be lower, you may be able to claim the earned income credit and certain other credits, and your standard deduction will be higher. 2010 tax file free The head of household filing status allows you to choose the standard deduction even if your spouse chooses to itemize deductions. 2010 tax file free See Head of Household , later, for more information. 2010 tax file free You will generally pay more combined tax on separate returns than you would on a joint return for the reasons listed under Special Rules, later. 2010 tax file free However, unless you are required to file separately, you should figure your tax both ways (on a joint return and on separate returns). 2010 tax file free This way you can make sure you are using the filing status that results in the lowest combined tax. 2010 tax file free When figuring the combined tax of a married couple, you may want to consider state taxes as well as federal taxes. 2010 tax file free How to file. 2010 tax file free   If you file a separate return, you generally report only your own income, exemptions, credits, and deductions. 2010 tax file free You can claim an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another person. 2010 tax file free You can file Form 1040. 2010 tax file free If your taxable income is less than $100,000, you may be able to file Form 1040A. 2010 tax file free Select this filing status by checking the box on line 3 of either form. 2010 tax file free Enter your spouse's full name and SSN or ITIN in the spaces provided. 2010 tax file free If your spouse does not have and is not required to have an SSN or ITIN, enter “NRA” in the space for your spouse's SSN. 2010 tax file free Use the Married filing separately column of the Tax Table or Section C of the Tax Computation Worksheet to figure your tax. 2010 tax file free Special Rules If you choose married filing separately as your filing status, the following special rules apply. 2010 tax file free Because of these special rules, you usually pay more tax on a separate return than if you use another filing status you qualify for. 2010 tax file free   Your tax rate generally is higher than on a joint return. 2010 tax file free Your exemption amount for figuring the alternative minimum tax is half that allowed on a joint return. 2010 tax file free You cannot take the credit for child and dependent care expenses in most cases, and the amount you can exclude from income under an employer's dependent care assistance program is limited to $2,500 (instead of $5,000). 2010 tax file free If you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. 2010 tax file free For more information about these expenses, the credit, and the exclusion, see chapter 32. 2010 tax file free You cannot take the earned income credit. 2010 tax file free You cannot take the exclusion or credit for adoption expenses in most cases. 2010 tax file free You cannot take the education credits (the American opportunity credit and lifetime learning credit), the deduction for student loan interest, or the tuition and fees deduction. 2010 tax file free You cannot exclude any interest income from qualified U. 2010 tax file free S. 2010 tax file free savings bonds you used for higher education expenses. 2010 tax file free If you lived with your spouse at any time during the tax year: You cannot claim the credit for the elderly or the disabled, and You must include in income a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received. 2010 tax file free The following credits and deductions are reduced at income levels half those for a joint return: The child tax credit, The retirement savings contributions credit, The deduction for personal exemptions, and Itemized deductions. 2010 tax file free Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return). 2010 tax file free If your spouse itemizes deductions, you cannot claim the standard deduction. 2010 tax file free If you can claim the standard deduction, your basic standard deduction is half the amount allowed on a joint return. 2010 tax file free Adjusted gross income (AGI) limits. 2010 tax file free   If your AGI on a separate return is lower than it would have been on a joint return, you may be able to deduct a larger amount for certain deductions that are limited by AGI, such as medical expenses. 2010 tax file free Individual retirement arrangements (IRAs). 2010 tax file free   You may not be able to deduct all or part of your contributions to a traditional IRA if you or your spouse were covered by an employee retirement plan at work during the year. 2010 tax file free Your deduction is reduced or eliminated if your income is more than a certain amount. 2010 tax file free This amount is much lower for married individuals who file separately and lived together at any time during the year. 2010 tax file free For more information, see How Much Can You Deduct in chapter 17. 2010 tax file free Rental activity losses. 2010 tax file free   If you actively participated in a passive rental real estate activity that produced a loss, you generally can deduct the loss from your nonpassive income, up to $25,000. 2010 tax file free This is called a special allowance. 2010 tax file free However, married persons filing separate returns who lived together at any time during the year cannot claim this special allowance. 2010 tax file free Married persons filing separate returns who lived apart at all times during the year are each allowed a $12,500 maximum special allowance for losses from passive real estate activities. 2010 tax file free See Limits on Rental Losses in chapter 9. 2010 tax file free Community property states. 2010 tax file free   If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin and file separately, your income may be considered separate income or community income for income tax purposes. 2010 tax file free See Publication 555. 2010 tax file free Joint Return After Separate Returns You can change your filing status from a separate return to a joint return by filing an amended return using Form 1040X. 2010 tax file free You generally can change to a joint return any time within 3 years from the due date of the separate return or returns. 2010 tax file free This does not include any extensions. 2010 tax file free A separate return includes a return filed by you or your spouse claiming married filing separately, single, or head of household filing status. 2010 tax file free Separate Returns After Joint Return Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return. 2010 tax file free Exception. 2010 tax file free   A personal representative for a decedent can change from a joint return elected by the surviving spouse to a separate return for the decedent. 2010 tax file free The personal representative has 1 year from the due date of the return (including extensions) to make the change. 2010 tax file free See Publication 559, Survivors, Executors, and Administrators, for more information on filing a return for a decedent. 2010 tax file free Head of Household You may be able to file as head of household if you meet all the following requirements. 2010 tax file free You are unmarried or “considered unmarried” on the last day of the year. 2010 tax file free See Marital Status , earlier, and Considered Unmarried , later. 2010 tax file free You paid more than half the cost of keeping up a home for the year. 2010 tax file free A qualifying person lived with you in the home for more than half the year (except for temporary absences, such as school). 2010 tax file free However, if the qualifying person is your dependent parent, he or she does not have to live with you. 2010 tax file free See Special rule for parent , later, under Qualifying Person. 2010 tax file free If you qualify to file as head of household, your tax rate usually will be lower than the rates for single or married filing separately. 2010 tax file free You will also receive a higher standard deduction than if you file as single or married filing separately. 2010 tax file free Kidnapped child. 2010 tax file free   A child may qualify you to file as head of household even if the child has been kidnapped. 2010 tax file free For more information, see Publication 501. 2010 tax file free How to file. 2010 tax file free   If you file as head of household, you can use Form 1040. 2010 tax file free If your taxable income is less than $100,000, you may be able to file Form 1040A. 2010 tax file free Indicate your choice of this filing status by checking the box on line 4 of either form. 2010 tax file free Use the Head of a household column of the Tax Table or Section D of the Tax Computation Worksheet to figure your tax. 2010 tax file free Considered Unmarried To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year. 2010 tax file free You are considered unmarried on the last day of the tax year if you meet all the following tests. 2010 tax file free You file a separate return (defined earlier under Joint Return After Separate Returns ). 2010 tax file free You paid more than half the cost of keeping up your home for the tax year. 2010 tax file free Your spouse did not live in your home during the last 6 months of the tax year. 2010 tax file free Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. 2010 tax file free See Temporary absences , under Qualifying Person, later. 2010 tax file free Your home was the main home of your child, stepchild, or foster child for more than half the year. 2010 tax file free (See Home of qualifying person , under Qualifying Person, later, for rules applying to a child's birth, death, or temporary absence during the year. 2010 tax file free ) You must be able to claim an exemption for the child. 2010 tax file free However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rules described in Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3, or in Support Test for Children of Divorced or Separated Parents (or Parents Who Live Apart) under Qualifying Relative in chapter 3. 2010 tax file free The general rules for claiming an exemption for a dependent are explained under Exemptions for Dependents in chapter 3. 2010 tax file free If you were considered married for part of the year and lived in a community property state (listed earlier under Married Filing Separately), special rules may apply in determining your income and expenses. 2010 tax file free See Publication 555 for more information. 2010 tax file free Nonresident alien spouse. 2010 tax file free   You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien. 2010 tax file free However, your spouse is not a qualifying person for head of household purposes. 2010 tax file free You must have another qualifying person and meet the other tests to be eligible to file as a head of household. 2010 tax file free Choice to treat spouse as resident. 2010 tax file free   You are considered married if you choose to treat your spouse as a resident alien. 2010 tax file free See Publication 519. 2010 tax file free Keeping Up a Home To qualify for head of household status, you must pay more than half of the cost of keeping up a home for the year. 2010 tax file free You can determine whether you paid more than half of the cost of keeping up a home by using Worksheet 2–1. 2010 tax file free Worksheet 2-1. 2010 tax file free Cost of Keeping Up a Home   Amount You Paid Total Cost Property taxes $ $ Mortgage interest expense     Rent     Utility charges     Repairs/maintenance     Property insurance     Food consumed on the premises     Other household expenses     Totals $ $ Minus total amount you paid   () Amount others paid   $ If the total amount you paid is more than the amount others paid, you meet the requirement of paying more than half the cost of keeping up the home. 2010 tax file free Costs you include. 2010 tax file free   Include in the cost of keeping up a home expenses such as rent, mortgage interest, real estate taxes, insurance on the home, repairs, utilities, and food eaten in the home. 2010 tax file free   If you used payments you received under Temporary Assistance for Needy Families (TANF) or other public assistance programs to pay part of the cost of keeping up your home, you cannot count them as money you paid. 2010 tax file free However, you must include them in the total cost of keeping up your home to figure if you paid over half the cost. 2010 tax file free Costs you do not include. 2010 tax file free   Do not include the costs of clothing, education, medical treatment, vacations, life insurance, or transportation. 2010 tax file free Also, do not include the rental value of a home you own or the value of your services or those of a member of your household. 2010 tax file free Qualifying Person See Table 2-1 to see who is a qualifying person. 2010 tax file free Any person not described in Table 2-1 is not a qualifying person. 2010 tax file free Table 2-1. 2010 tax file free Who Is a Qualifying Person Qualifying You To File as Head of Household?1 Caution. 2010 tax file free See the text of this chapter for the other requirements you must meet to claim head of household filing status. 2010 tax file free IF the person is your . 2010 tax file free . 2010 tax file free . 2010 tax file free   AND . 2010 tax file free . 2010 tax file free . 2010 tax file free   THEN that person is . 2010 tax file free . 2010 tax file free . 2010 tax file free qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other tests)2   he or she is single   a qualifying person, whether or not you can claim an exemption for the person. 2010 tax file free   he or she is married and you can claim an exemption for him or her   a qualifying person. 2010 tax file free   he or she is married and you cannot claim an exemption for him or her   not a qualifying person. 2010 tax file free 3 qualifying relative4 who is your father or mother   you can claim an exemption for him or her5   a qualifying person. 2010 tax file free 6   you cannot claim an exemption for him or her   not a qualifying person. 2010 tax file free qualifying relative4 other than your father or mother (such as a grandparent, brother, or sister who meets certain tests)   he or she lived with you more than half the year, and he or she is related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3 and you can claim an exemption for him or her5   a qualifying person. 2010 tax file free   he or she did not live with you more than half the year   not a qualifying person. 2010 tax file free   he or she is not related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3 and is your qualifying relative only because he or she lived with you all year as a member of your household   not a qualifying person. 2010 tax file free   you cannot claim an exemption for him or her   not a qualifying person. 2010 tax file free 1A person cannot qualify more than one taxpayer to use the head of household filing status for the year. 2010 tax file free 2The term “qualifying child” is defined in chapter 3. 2010 tax file free Note. 2010 tax file free If you are a noncustodial parent, the term “qualifying child” for head of household filing status does not include a child who is your qualifying child for exemption purposes only because of the rules described under Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3. 2010 tax file free If you are the custodial parent and those rules apply, the child generally is your qualifying child for head of household filing status even though the child is not a qualifying child for whom you can claim an exemption. 2010 tax file free 3This person is a qualifying person if the only reason you cannot claim the exemption is that you can be claimed as a dependent on someone else's return. 2010 tax file free 4The term “ qualifying relative ” is defined in chapter 3. 2010 tax file free 5If you can claim an exemption for a person only because of a multiple support agreement, that person is not a qualifying person. 2010 tax file free See Multiple Support Agreement in chapter 3. 2010 tax file free 6See Special rule for parent . 2010 tax file free Example 1—child. 2010 tax file free Your unmarried son lived with you all year and was 18 years old at the end of the year. 2010 tax file free He did not provide more than half of his own support and does not meet the tests to be a qualifying child of anyone else. 2010 tax file free As a result, he is your qualifying child (see Qualifying Child in chapter 3) and, because he is single, your qualifying person for you to claim head of household filing status. 2010 tax file free Example 2—child who is not qualifying person. 2010 tax file free The facts are the same as in Example 1 except your son was 25 years old at the end of the year and his gross income was $5,000. 2010 tax file free Because he does not meet the age test (explained under Qualifying Child in chapter 3), your son is not your qualifying child. 2010 tax file free Because he does not meet the gross income test (explained later under Qualifying Relative in chapter 3), he is not your qualifying relative. 2010 tax file free As a result, he is not your qualifying person for head of household purposes. 2010 tax file free Example 3—girlfriend. 2010 tax file free Your girlfriend lived with you all year. 2010 tax file free Even though she may be your qualifying relative if the gross income and support tests (explained in chapter 3) are met, she is not your qualifying person for head of household purposes because she is not related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3. 2010 tax file free See Table 2-1. 2010 tax file free Example 4—girlfriend's child. 2010 tax file free The facts are the same as in Example 3 except your girlfriend's 10-year-old son also lived with you all year. 2010 tax file free He is not your qualifying child and, because he is your girlfriend's qualifying child, he is not your qualifying relative (see Not a Qualifying Child Test in chapter 3). 2010 tax file free As a result, he is not your qualifying person for head of household purposes. 2010 tax file free Home of qualifying person. 2010 tax file free   Generally, the qualifying person must live with you for more than half of the year. 2010 tax file free Special rule for parent. 2010 tax file free   If your qualifying person is your father or mother, you may be eligible to file as head of household even if your father or mother does not live with you. 2010 tax file free However, you must be able to claim an exemption for your father or mother. 2010 tax file free Also, you must pay more than half the cost of keeping up a home that was the main home for the entire year for your father or mother. 2010 tax file free   You are keeping up a main home for your father or mother if you pay more than half the cost of keeping your parent in a rest home or home for the elderly. 2010 tax file free Death or birth. 2010 tax file free   You may be eligible to file as head of household even if the individual who qualifies you for this filing status is born or dies during the year. 2010 tax file free If the individual is your qualifying child, the child must have lived with you for more than half the part of the year he or she was alive. 2010 tax file free If the individual is anyone else, see Publication 501. 2010 tax file free Temporary absences. 2010 tax file free   You and your qualifying person are considered to live together even if one or both of you are temporarily absent from your home due to special circumstances such as illness, education, business, vacation, or military service. 2010 tax file free It must be reasonable to assume the absent person will return to the home after the temporary absence. 2010 tax file free You must continue to keep up the home during the absence. 2010 tax file free Qualifying Widow(er) With Dependent Child If your spouse died in 2013, you can use married filing jointly as your filing status for 2013 if you otherwise qualify to use that status. 2010 tax file free The year of death is the last year for which you can file jointly with your deceased spouse. 2010 tax file free See Married Filing Jointly , earlier. 2010 tax file free You may be eligible to use qualifying widow(er) with dependent child as your filing status for 2 years following the year your spouse died. 2010 tax file free For example, if your spouse died in 2012, and you have not remarried, you may be able to use this filing status for 2013 and 2014. 2010 tax file free This filing status entitles you to use joint return tax rates and the highest standard deduction amount (if you do not itemize deductions). 2010 tax file free It does not entitle you to file a joint return. 2010 tax file free How to file. 2010 tax file free   If you file as qualifying widow(er) with dependent child, you can use Form 1040. 2010 tax file free If you also have taxable income of less than $100,000 and meet certain other conditions, you may be able to file Form 1040A. 2010 tax file free Check the box on line 5 of either form. 2010 tax file free Use the Married filing jointly column of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax. 2010 tax file free Eligibility rules. 2010 tax file free   You are eligible to file your 2013 return as a qualifying widow(er) with dependent child if you meet all of the following tests. 2010 tax file free You were entitled to file a joint return with your spouse for the year your spouse died. 2010 tax file free It does not matter whether you actually filed a joint return. 2010 tax file free Your spouse died in 2011 or 2012 and you did not remarry before the end of 2013. 2010 tax file free You have a child or stepchild for whom you can claim an exemption. 2010 tax file free This does not include a foster child. 2010 tax file free This child lived in your home all year, except for temporary absences. 2010 tax file free See Temporary absences , earlier, under Head of Household. 2010 tax file free There are also exceptions, described later, for a child who was born or died during the year and for a kidnapped child. 2010 tax file free You paid more than half the cost of keeping up a home for the year. 2010 tax file free See Keeping Up a Home , earlier, under Head of Household. 2010 tax file free Example. 2010 tax file free John's wife died in 2011. 2010 tax file free John has not remarried. 2010 tax file free During 2012 and 2013, he continued to keep up a home for himself and his child, who lives with him and for whom he can claim an exemption. 2010 tax file free For 2011 he was entitled to file a joint return for himself and his deceased wife. 2010 tax file free For 2012 and 2013, he can file as qualifying widower with a dependent child. 2010 tax file free After 2013 he can file as head of household if he qualifies. 2010 tax file free Death or birth. 2010 tax file free    You may be eligible to file as a qualifying widow(er) with dependent child if the child who qualifies you for this filing status is born or dies during the year. 2010 tax file free You must have provided more than half of the cost of keeping up a home that was the child's main home during the entire part of the year he or she was alive. 2010 tax file free Kidnapped child. 2010 tax file free   A child may qualify you for qualifying widow(er) with dependent child, even if the child has been kidnapped. 2010 tax file free See Publication 501. 2010 tax file free    As mentioned earlier, this filing status is available for only 2 years following the year your spouse died. 2010 tax file free Prev  Up  Next   Home   More Online Publications
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Affordable Care Act Tax Provisions

Check out the new Affordable Care Act Tax Provisions Home Page

Información en Español: Disposiciones de La Ley del Cuidado de Salud de Bajo Precio
 

Update

The open enrollment period to purchase health insurance coverage for 2014 through the Health Insurance Marketplace runs from Oct. 1, 2013, through March 31, 2014. If you are seeking information about how to obtain health care coverage or financial assistance to purchase health care coverage for you and your family, visit the Health and Human Services website, HealthCare.gov.

Effect of Sequestration on Small Business Health Care Tax Credit

Pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, refund payments issued to certain small tax-exempt employers claiming the refundable portion of the Small Business Health Care Tax Credit under Internal Revenue Code Section 45R, are subject to sequestration. This means that refund payments processed on or after Oct.1, 2013, and on or before Sept. 30, 2014, to a Section 45R applicant will be reduced by the fiscal year 2014 sequestration rate of 7.2 percent, irrespective of when the original or amended tax return was received by the IRS. The sequestration reduction rate will be applied unless and until a law is enacted that cancels or otherwise impacts the sequester, at which time the sequestration reduction rate is subject to change.

Affected taxpayers will be notified through correspondence that a portion of their requested payment was subject to the sequester reduction and the amount.

IRC §7216, Disclosure or Use of Information by Tax Return Preparers

Final Treasury Regulations on rules and consent requirements relating to the disclosure or use of tax return information by tax return preparers became effective Dec. 28, 2012. For additional information about how these apply to services and education related to the Affordable Care Act, please see our questions and answers

Medical Loss Ratio (MLR)

Beginning in 2011, insurance companies are required to spend a specified percentage of premium dollars on medical care and quality improvement activities, meeting a medical loss ratio (MLR) standard. Insurance companies that are not meeting the MLR standard will be required to provide rebates to their consumers beginning in 2012. For information on the federal tax consequences to an insurance company that pays a MLR rebate and an individual policyholder who receives a MLR rebate, as well as information on the federal tax consequences to employees if a MLR rebate stems from a group health insurance policy, see our frequently asked questions.

Reporting Employer Provided Health Coverage in Form W-2

The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee’s Form W-2, Wage and Tax Statement, in Box 12, using Code DD. Many employers are eligible for transition relief for tax-year 2012 and beyond, until the IRS issues final guidance for this reporting requirement.

The amount reported does not affect tax liability, as the value of the employer excludible contribution to health coverage continues to be excludible from an employee's income, and it is not taxable. This reporting is for informational purposes only, to show employees the value of their health care benefits.

More information about the reporting can be found on Form W-2 Reporting of Employer-Sponsored Health Coverage.

Net Investment Income Tax

A new Net Investment Income Tax went into effect on Jan. 1, 2013. The 3.8 percent Net Investment Income Tax applies to individuals, estates and trusts that have certain investment income above certain threshold amounts. On Nov. 26, 2013, the IRS and the Treasury Department issued final regulations, which provide guidance on the general application of the Net Investment Income Tax and the computation of Net Investment Income. In addition, on Nov. 26, 2013, the IRS and the Treasury Department issued proposed regulations on the computation of net investment income as it relates to certain specific types of property. Comments may be submitted electronically, by mail or hand delivered to the IRS. For additional information on the Net Investment Income Tax, see our questions and answers.

Additional Medicare Tax

A new Additional Medicare Tax went into effect on Jan. 1, 2013. The 0.9 percent Additional Medicare Tax applies to an individual’s wages, Railroad Retirement Tax Act compensation and self-employment income that exceeds a threshold amount based on the individual’s filing status. The threshold amounts are $250,000 for married taxpayers who file jointly, $125,000 for married taxpayers who file separately and $200,000 for all other taxpayers. An employer is responsible for withholding the Additional Medicare Tax from wages or compensation it pays to an employee in excess of $200,000 in a calendar year. On Nov. 26, 2013, the IRS and the Department of the Treasury issued final regulations which provide guidance for employers and individuals relating to the implementation of Additional Medicare Tax, including the requirement to withhold Additional Medicare Tax on certain wages and compensation, the requirement to report Additional Medicare Tax, and the employer process for adjusting underpayments and overpayments of Additional Medicare Tax. In addition, the regulations provide guidance on the employer and individual processes for filing a claim for refund for an overpayment of Additional Medicare Tax. For additional information on the Additional Medicare Tax, see our questions and answers.

Minimum Value

On April 26, 2012, the Department of the Treasury and IRS issued Notice 2012-31, which provides information and requested public comment on an approach to determining whether an eligible employer-sponsored health plan provides minimum value. Additionally, on April 30, 2013, the Treasury Department and the IRS issued proposed regulations relating to minimum value of eligible employer-sponsored plans and other rules regarding the premium tax credit. Starting in 2014, whether such a plan provides minimum value will be relevant to eligibility for the premium tax credit and application of the employer shared responsibility payment.

Information Reporting on Health Coverage by Employers

On March 5, 2014, the Department of the Treasury and IRS issued final regulations on employer health insurance coverage information reporting. The information reporting relates to health insurance coverage that is offered by certain employers, referred to as applicable large employers, and reporting is to be provided by each member of an applicable large employer. Additionally, on July 9, 2013, the Department of the Treasury and the IRS issued Notice 2013-45, announcing transition relief for 2014 from this annual information reporting. Learn more about this reporting requirement by reading the fact sheet issued by the U.S. Department of the Treasury.

Information Reporting on Health Coverage by Insurers

On March 5, 2014, the Department of the Treasury and IRS issued final regulations on minimum essential coverage information reporting. The information reporting is to be provided by health insurance issuers, certain sponsors of self-insured plans, government agencies and certain other parties that provide health coverage. Additionally, on July 9, 2013, the Department of the Treasury and the IRS issued Notice 2013-45 announcing transition relief for 2014 from this annual information reporting. Learn more about this reporting requirement by reading the fact sheet issued by the U.S. Department of the Treasury.

Disclosure of Return Information

On Aug. 13, 2013, the Department of the Treasury and the IRS issued final regulations with rules for disclosure of return information to the Department of Health and Human Services that will be used to carry out eligibility determinations for advance payments of the premium tax credit, Medicaid and other health insurance affordability programs. For additional information on the final regulations, see our questions and answers.

Small Business Health Care Tax Credit

This credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees and is specifically targeted for those with low- and moderate-income workers. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees. On Aug. 23, 2013, the Department of Treasury and the IRS issued proposed regulations, which include information on the transition of eligibility for the credit and requiring the purchase of insurance coverage through an Affordable Insurance Exchange (also known as a Health Insurance Marketplace). Additionally, IRS Notice 2014-06 provides transition relief for employers in certain counties in Washington and Wisconsin with no SHOP coverage available. Learn more by browsing our page on the Small Business Health Care Tax Credit for Small Employers.

Application of the Affordable Care Act to Health Reimbursement Arrangements, Health Flexible Spending Arrangements and Certain Other Employer Healthcare Arrangements

The Affordable Care Act’s market reforms apply to group health plans. On Sept. 13, 2013, the IRS issued Notice 2013-54, which explains how the Affordable Care Act’s market reforms apply to certain types of group health plans, including health reimbursement arrangements (HRAs), health flexible spending arrangements (health FSAs) and certain other employer healthcare arrangements, including arrangements under which an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy. The notice also provides guidance on employee assistance programs or EAPs and on section 125(f)(3), which prohibits the use of pre-tax employee contributions to cafeteria plans to purchase coverage on an Affordable Insurance Exchange (also known as a Health Insurance Marketplace). The notice applies for plan years beginning on and after Jan. 1, 2014, but taxpayers may apply the guidance provided in the notice for all prior periods.  

DOL has issued a notice in substantially identical form to Notice 2013-54, DOL Technical Release 2013-03, and HHS will shortly issue guidance to reflect that it concurs with Notice 2013-54. On Jan. 24, 2013, DOL and HHS issued FAQs that addressed the application of the Affordable Care Act to HRAs.

On Jan. 9, 2014, DOL and HHS issued FAQs that addressed, among other things, future rules relating to excepted benefits.

Health Flexible Spending Arrangements

Effective Jan. 1, 2011, the cost of an over-the-counter medicine or drug cannot be reimbursed from Flexible Spending Arrangements (FSAs) or health reimbursement arrangements unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles. This standard applies only to purchases made on or after Jan. 1, 2011. A similar rule went into effect on Jan. 1, 2011, for Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs). Employers and employees should take these changes into account as they make health benefit decisions. For more information, see news release IR-2010-95, Notice 2010-59, Revenue Ruling 2010-23 and our questions and answers. FSA and HRA participants can continue using debit cards to buy prescribed over-the-counter medicines, if requirements are met. For more information, see news release IR-2010-128 and Notice 2011-5. Additionally, Notice 2013-57 provides information about the definition of preventive care for purposes of high deductible health plans associated with HSAs. 

In addition, starting in 2013, there are new rules about the amount that can be contributed to an FSA. Notice 2012-40 provides information about these rules and flexibility for employers applying the new rules. On Oct. 31, 2013, the Department of the Treasury and IRS issued Notice 2013-71, which provides information on a new $500 carryover option for employer-sponsored healthcare flexible spending arrangements. Learn more by reading the news release issued by the U.S. Department of the Treasury.

Further, Notice 2013-54 provides guidance regarding the application of the Affordable Care Act’s market reforms to certain health FSAs.   

Medical Device Excise Tax

On Dec. 5, 2012, the IRS and the Department of the Treasury issued final regulations on the new 2.3-percent medical device excise tax (IRC §4191) that manufacturers and importers will pay on their sales of certain medical devices starting in 2013. On Dec. 5, 2012, the IRS and the Department of the Treasury also issued Notice 2012-77, which provides interim guidance on certain issues related to the medical device excise tax. Additional information is available on the Medical Device Excise Tax page and Medical Device Excise Tax FAQs on IRS.gov.

Changes to Itemized Deduction for Medical Expenses

Beginning Jan. 1, 2013, you can claim deductions for medical expenses not covered by your health insurance when they reach 10 percent of your adjusted gross income. This change affects your 2013 tax return that you will file in 2014. There is a temporary exemption from Jan. 1, 2013, to Dec. 31, 2016, for individuals age 65 and older and their spouses. For additional information, see our questions and answers.

Health Insurance Premium Tax Credit

Starting in 2014, individuals and families can take a new premium tax credit to help them afford health insurance coverage purchased through an Affordable Insurance Exchange (also known as a Health Insurance Marketplace). The premium tax credit is refundable so taxpayers who have little or no income tax liability can still benefit. The credit also can be paid in advance to a taxpayer’s insurance company to help cover the cost of premiums. On May 18, 2012, the Department of the Treasury and the IRS issued final regulations, which provide guidance for individuals who enroll in qualified health plans through Marketplaces and claim the premium tax credit, and for Marketplaces that make qualified health plans available to individuals and employers. On Jan. 30, 2013, the Department of the Treasury and IRS released final regulations on the premium tax credit affordability test for related individuals. On April 30, 2013, the Department of the Treasury and the IRS issued proposed regulations relating to minimum value of eligible employer-sponsored plans and other rules regarding the premium tax credit. Additionally, Notice 2013-41, issued on June 26, 2013, provides information for determining whether or when individuals are considered eligible for coverage under certain Medicaid, Medicare, CHIP, TRICARE, student health or state high-risk pool programs. This determination will affect whether the individual is eligible for the premium tax credit. On June 28, 2013, the Department of the Treasury and IRS issued proposed regulations on the new reporting requirements for Marketplaces. Notice 2014-23 was issued on March 26, 2014, and allows certain victims of domestic abuse to claim the premium tax credit while filing a return using the Married Filing Separately filing status for the 2014 calendar year. For more information on the credit, see our premium tax credit page and our questions and answers.

Individual Shared Responsibility Provision

Starting in 2014, the Individual Shared Responsibility provision calls for each individual to either have minimum essential coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. On Aug. 27, 2013, the Department of the Treasury and the IRS issued final regulations on the Individual Shared Responsibility provision. On Jan. 23, 2014, the Department of the Treasury and the IRS issued proposed regulations addressing several issues that were identified in the preamble to the final regulations. In particular, the proposed regulations provide that certain limited-benefit Medicaid and TRICARE coverage is not minimum essential coverage. The proposed regulations also address the treatment of health reimbursement arrangements and wellness program incentives for purposes of determining the exemption for individuals who cannot afford employer-sponsored coverage. Comments are due April 28, 2014, and may be submitted electronically, by mail or hand delivered to the IRS. Additionally, because individuals may not be aware that these limited-benefit government health programs are not minimum essential coverage at the time of enrollment, Notice 2014-10, issued on Jan. 23, 2014, provides transition relief from the shared responsibility payment for months in 2014 in which individuals have certain Medicaid coverage or limited-benefit coverage under chapter 55 of title 10, U.S.C. For additional information on the Individual Shared Responsibility provision, the final regulations and Notice 2013-42, see our ISRP page and questions and answers. Additional information on exemptions and minimum essential coverage is available in final regulations issued by the U.S. Department of Health & Human Services. The open enrollment period to purchase health insurance coverage for 2014 through the Health Insurance Marketplace runs from Oct. 1, 2013, through March 31, 2014.

Health Coverage for Older Children

Health coverage for an employee's children under 27 years of age is now generally tax-free to the employee. This expanded health care tax benefit applies to various work place and retiree health plans. These changes immediately allow employers with cafeteria plans –– plans that allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits –– to permit employees to begin making pre-tax contributions to pay for this expanded benefit. This also applies to self-employed individuals who qualify for the self-employed health insurance deduction on their federal income tax return. Learn more by reading our news release or this notice.

Excise Tax on Indoor Tanning Services

A 10-percent excise tax on indoor UV tanning services went into effect on July 1, 2010. Payments are made along with Form 720, Quarterly Federal Excise Tax Return. The tax doesn't apply to phototherapy services performed by a licensed medical professional on his or her premises. There's also an exception for certain physical fitness facilities that offer tanning as an incidental service to members without a separately identifiable fee. For more information on the tax and how it is administered, see the Indoor Tanning Services Tax Center.

Adoption Credit

For tax years 2010 and 2011, the Affordable Care Act raised the maximum adoption credit per child and the credit was refundable. For more information related to the adoption credit for tax years 2010 and 2011, see our news release, tax tip, questions and answers, flyer, Notice 2010-66, Revenue Procedure 2010-31, Revenue Procedure 2010-35 and Revenue Procedure 2011-52.

For tax year 2012, the credit has reverted to being nonrefundable, with a maximum amount (dollar limitation) of $12,650 per child. If you adopted a child in 2012, see Tax Topic 607 for more information. 

Transitional Reinsurance Program

The ACA requires all health insurance issuers and self-insured group health plans to make contributions under the transitional Reinsurance Program to support payments to individual market issuers that cover high-cost individuals. For information on the tax treatment of contributions made under the Reinsurance Program, see our frequently asked questions.

Medicare Shared Savings Program

The Affordable Care Act establishes a Medicare shared savings program (MSSP) which encourages Accountable Care Organizations (ACOs) to facilitate cooperation among providers to improve the quality of care provided to Medicare beneficiaries and reduce unnecessary costs. More information can be found in Notice 2011-20, which solicited written comments regarding what additional guidance, if any, is needed for tax-exempt organizations participating in the MSSP through an ACO. This guidance also addresses the participation of tax-exempt organizations in non-MSSP activities through ACOs. Additional information on the MSSP is available on the Department of Health and Human Services website.

The Centers for Medicare and Medicaid Services has released final regulations describing the rules for the Shared Savings Program and accountable care organizations. Fact Sheet 2011-11 confirms that Notice 2011-20 continues to reflect IRS expectations regarding the Shared Savings Program and ACOs, and provides additional information for charitable organizations that may wish to participate.

Qualified Therapeutic Discovery Project Program

This program was designed to provide tax credits and grants to small firms that show significant potential to produce new and cost-saving therapies, support U.S. jobs and increase U.S. competitiveness. Applicants were required to have their research projects certified as eligible for the credit or grant. IRS guidance describes the application process.

Submission of certification applications began June 21, 2010, and applications had to be postmarked no later than July 21, 2010, to be considered for the program. Applications that were postmarked by July 21, 2010, were reviewed by both the Department of Health and Human Services (HHS) and the IRS. All applicants were notified by letter dated October 29, 2010, advising whether or not the application for certification was approved. For those applications that were approved, the letter also provided the amount of the grant to be awarded or the tax credit the applicant was eligible to take.

The IRS published the names of the applicants whose projects were approved as required by law. Listings of results are available by state.

Learn more by reading the IRS news release, the news release issued by the U.S. Department of the Treasury, the page on the HHS website and our questions and answers.

Group Health Plan Requirements

The Affordable Care Act establishes a number of new requirements for group health plans. Interim guidance on changes to the nondiscrimination requirements for group health plans can be found in Notice 2011-1, which provides that employers will not be subject to penalties until after additional guidance is issued. Additionally, TD 9575 and REG-140038-10, issued by DOL, HHS and IRS, provide information on the summary of benefits and coverage and the uniform glossary. Notice 2012-59 provides guidance to group health plans on the waiting periods they may apply before coverage starts. On March 19, 2013, HHS, DOL and IRS issued proposed regulations on the ninety-day waiting period limitation.. 

More information on group health plan requirements is available on the websites of the Departments of Health and Human Services and Labor and in additional guidance.

Further, Notice 2013-54 provides guidance regarding the application of the Affordable Care Act’s market reforms to certain types of group health plans, including health reimbursement arrangements (HRAs), health flexible spending arrangements (health FSAs) and certain other employer healthcare arrangements, including arrangements under which an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy. 

Annual Fee on Health Insurance Providers

The Affordable Care Act created an annual fee on certain health insurance providers beginning in 2014. On Nov. 26, 2013, the Treasury Department and IRS issued final regulations on this annual fee imposed on covered entities engaged in the business of providing health insurance for United States health risks.

For additional information visit our Affordable Care Act Provision 9010 - Health Insurance Providers Fee page

Tax-Exempt 501(c)(29) Qualified Nonprofit Health Insurance Issuers

The Affordable Care Act requires the Department of Health and Human Services (HHS) to establish the Consumer Operated and Oriented Plan program (CO-OP program). It also provides for tax exemption for recipients of CO-OP program grants and loans that meet additional requirements under section 501(c)(29). IRS Notice 2011-23 outlined the requirements for tax exemption under section 501(c)(29) and solicited written comments regarding these requirements as well as the application process. Revenue Procedure 2012-11, issued in conjunction with temporary regulations and a notice of proposed rulemaking, sets out the procedures for issuing determination letters and rulings on the exempt status of organizations applying for recognition of exemption under 501(c)(29).

An overview of the CO-OP program is available on the HHS website.

Medicare Part D Coverage Gap “donut hole” Rebate

The Affordable Care Act provides a one-time $250 rebate in 2010 to assist Medicare Part D recipients who have reached their Medicare drug plan’s coverage gap. This payment is not taxable. This payment is not made by the IRS. More information can be found at www.medicare.gov.

Additional Requirements for Tax-Exempt Hospitals

The Affordable Care Act added new requirements for charitable hospitals (see Notice 2010-39 and Notice 2011-52). On June 26, 2012, the IRS published proposed regulations that provide information on the requirements for charitable hospitals relating to financial assistance and emergency medical care policies, charges for emergency or medically necessary care provided to individuals eligible for financial assistance, and billing and collections. On April 5, 2013, the IRS published proposed regulations on the requirement that charitable hospitals conduct community health needs assessments (CHNAs) and adopt implementation strategies at least once every three years. These proposed regulations also discuss the related excise tax and reporting requirements for charitable hospitals and the consequences for failure to satisfy the section 501(r) requirements. On August 15, 2013, the IRS published temporary regulations and proposed regulations providing information on which form to use when making an excise tax payment for failure to meet the CHNA requirements and the due date for filing the form. Notice 2014-2 confirms that hospital organizations can rely on proposed regulations under section 501(r) of the Internal Revenue Code published on June 26, 2012 and April 5, 2013, pending the publication of final regulations or other applicable guidance. Notice 2014-3 contains a proposed revenue procedure that provides correction and disclosure procedures under which certain failures to meet the requirements of section 501(r) will be excused.

Annual Fee on Branded Prescription Pharmaceutical Manufacturers and Importers

The Affordable Care Act created an annual fee payable beginning in 2011 by certain manufacturers and importers of brand name pharmaceuticals. On Aug. 15, 2011, the IRS issued temporary regulations and a notice of proposed rulemaking on the branded prescription drug fee. The temporary regulations describe the rules related to the fee, including how it is computed and how it is paid. On Aug. 5, 2013, the IRS issued Notice 2013-51, which provides additional guidance on the branded prescription drug fee for the 2014 fee year. For information on the fee for the 2012 fee year and for the 2013 fee year, see Notice 2011-92 and Notice 2012-74.

For additional information, visit our Affordable Care Act Provision 9008 Branded Prescription Drug Fee page.

Modification of Section 833 Treatment of Certain Health Organizations

The Affordable Care Act amended section 833 of the Code, which provides special rules for the taxation of Blue Cross and Blue Shield organizations and certain other organizations that provide health insurance. IRS Notice 2010-79 provides transitional relief and interim guidance on the computation of an organization’s taxpayer’s Medical Loss Ratio (MLR) for purposes of section 833, the consequences of nonapplication and changes in accounting method. Notice 2011-04 provides additional information and the procedures for qualifying organizations to obtain automatic consent to change its method of accounting for unearned premiums. Notice 2012-37 extends the transitional relief and interim guidance provided in Notice 2010-79 for another year to any taxable year beginning in 2012 and the first taxable year beginning after Dec. 31, 2012. 

On January 6, 2014, the IRS issued final regulations that describe how the MLR for purposes of section 833 is computed.

Limitation on Deduction for Compensation Paid by Certain Health Insurance Providers (amended section 162(m))

The Affordable Care Act amended section 162(m) of the Code to limit the compensation deduction available to certain health insurance providers. The amendment goes into effect for taxable years beginning after Dec. 31, 2012, but may affect deferred compensation attributable to services performed in a taxable year beginning after Dec. 31, 2009. On April 1, 2013, the Treasury Department and IRS issued proposed regulations on this provision. 

Employer Shared Responsibility Payment

The Affordable Care Act establishes that certain employers must offer health coverage to their full-time employees or a shared responsibility payment may apply. On Feb. 10, 2014, the Department of the Treasury and the IRS issued final regulations on the Employer Shared Responsibility provisions. For additional information on the Employer Shared Responsibility provisions and the proposed regulations, see our questions and answers. On July 9, 2013, the Department of the Treasury and the IRS announced transition relief from the Employer Shared Responsibility provisions for 2014. For more information, please see Notice 2013-45. For additional transition relief generally applicable to 2015, see the preamble to the final regulations.  

Patient-Centered Outcomes Research Institute Fee

The Affordable Care Act imposes the Patient-Centered Outcomes Research Institute (PCORI). Funded by the Patient-Centered Outcomes Research Trust Fund, the institute will assist patients, clinicians, purchasers and policy-makers in making informed health decisions by advancing clinical effectiveness research. The trust fund will be funded in part by fees paid by issuers of certain health insurance policies and sponsors of certain self-insured health plans.

The IRS and the Department of the Treasury have issued final regulations on this fee. Additional information on the fee is available on the PCORI page and in our questions and answers and chart summaryForm 720, Quarterly Federal Excise Tax Return, was revised to provide for the reporting and payment of the PCORI fee.

Retiree Drug Subsidies

Under § 139A of the Internal Revenue Code, certain special subsidy payments for retiree drug coverage made under the Social Security Act  are not included in the gross income of plan sponsors. Plan sponsors receive these retiree drug subsidy payments based on the allowable retiree costs for certain qualified retiree prescription drug plans. For taxable years beginning on or after Jan. 1, 2013, new statutory rules affect the ability of plan sponsors to deduct costs that are reimbursed through these subsidies. See our questions and answers for more information.

For More Information

For tips, fact sheets, questions and answers, videos and more, see our Affordable Care Act of 2010: News Releases, Multimedia and Legal Guidance page.

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Page Last Reviewed or Updated: 26-Mar-2014

 

The 2010 Tax File Free

2010 tax file free 3. 2010 tax file free   Self-Employment Tax Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Who Must Pay Self-Employment Tax?Employed by a U. 2010 tax file free S. 2010 tax file free Church Effect of Exclusion Members of the Clergy Income From U. 2010 tax file free S. 2010 tax file free Possessions Exemption From Social Security and Medicare Taxes Topics - This chapter discusses: Who must pay self-employment tax, and Who is exempt from self-employment tax. 2010 tax file free Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 517 Social Security and Other Information for Members of the Clergy and Religious Workers Form (and Instructions) Form 1040-PR Planilla para la Declaración de la Contribución Federal sobre el Trabajo por Cuenta Propia Form 1040-SS U. 2010 tax file free S. 2010 tax file free Self-Employment Tax Return Form 4361 Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners Schedule SE (Form 1040) Self-Employment Tax See chapter 7 for information about getting these publications and forms. 2010 tax file free Who Must Pay Self-Employment Tax? If you are a self-employed U. 2010 tax file free S. 2010 tax file free citizen or resident, the rules for paying self-employment tax are generally the same whether you are living in the United States or abroad. 2010 tax file free The self-employment tax is a social security and Medicare tax on net earnings from self- employment. 2010 tax file free You must pay self-employment tax if your net earnings from self-employment are at least $400. 2010 tax file free For 2013, the maximum amount of net earnings from self-employment that is subject to the social security portion of the tax is $113,700. 2010 tax file free All net earnings are subject to the Medicare portion of the tax. 2010 tax file free Employed by a U. 2010 tax file free S. 2010 tax file free Church If you were employed by a U. 2010 tax file free S. 2010 tax file free church or a qualified church-controlled organization that chose exemption from social security and Medicare taxes and you received wages of $108. 2010 tax file free 28 or more from the organization, the amounts paid to you are subject to self-employment tax. 2010 tax file free However, you can choose to be exempt from social security and Medicare taxes if you are a member of a recognized religious sect. 2010 tax file free See Publication 517 for more information about church employees and self-employment tax. 2010 tax file free Effect of Exclusion You must take all of your self-employment income into account in figuring your net earnings from self-employment, even income that is exempt from income tax because of the foreign earned income exclusion. 2010 tax file free Example. 2010 tax file free You are in business abroad as a consultant and qualify for the foreign earned income exclusion. 2010 tax file free Your foreign earned income is $95,000, your business deductions total $27,000, and your net profit is $68,000. 2010 tax file free You must pay self-employment tax on all of your net profit, including the amount you can exclude from income. 2010 tax file free Members of the Clergy If you are a member of the clergy, you are treated as self-employed for self-employment tax purposes. 2010 tax file free Your U. 2010 tax file free S. 2010 tax file free self-employment tax is based upon net earnings from self-employment figured without regard to the foreign earned income exclusion or the foreign housing exclusion. 2010 tax file free You can receive exemption from coverage for your ministerial duties if you conscientiously oppose public insurance due to religious reasons or if you oppose it due to the religious principles of your denomination. 2010 tax file free You must file Form 4361 to apply for this exemption. 2010 tax file free This subject is discussed in further detail in Publication 517. 2010 tax file free Income From U. 2010 tax file free S. 2010 tax file free Possessions If you are a U. 2010 tax file free S. 2010 tax file free citizen or resident alien and you own and operate a business in Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, or the U. 2010 tax file free S. 2010 tax file free Virgin Islands, you must pay tax on your net earnings from self-employment (if they are $400 or more) from those sources. 2010 tax file free You must pay the self-employment tax whether or not the income is exempt from U. 2010 tax file free S. 2010 tax file free income taxes (or whether or not you otherwise must file a U. 2010 tax file free S. 2010 tax file free income tax return). 2010 tax file free Unless your situation is described below, attach Schedule SE (Form 1040) to your U. 2010 tax file free S. 2010 tax file free income tax return. 2010 tax file free If you do not have to file Form 1040 with the United States and you are a resident of any of the U. 2010 tax file free S. 2010 tax file free possessions listed in the preceding paragraph, figure your self-employment tax on Form 1040-SS. 2010 tax file free Residents of Puerto Rico may file the Spanish-language Formulario 1040-PR. 2010 tax file free If you are not enclosing a check or money order, file your return with the: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 If you are enclosing a check or money order, file your return with the: Department of the Treasury P. 2010 tax file free O. 2010 tax file free Box 1303 Charlotte, NC 28201-1303 Exemption From Social Security and Medicare Taxes The United States may reach agreements with foreign countries to eliminate dual coverage and dual contributions (taxes) to social security systems for the same work. 2010 tax file free See Bilateral Social Security (Totalization) Agreements in chapter 2 under Social Security and Medicare Taxes. 2010 tax file free As a general rule, self-employed persons who are subject to dual taxation will only be covered by the social security system of the country where they reside. 2010 tax file free For more information on how any specific agreement affects self-employed persons, contact the United States Social Security Administration, as discussed under Bilateral Social Security (Totalization) Agreements in chapter 2. 2010 tax file free If your self-employment earnings should be exempt from foreign social security tax and subject only to U. 2010 tax file free S. 2010 tax file free self-employment tax, you should request a certificate of coverage from the U. 2010 tax file free S. 2010 tax file free Social Security Administration, Office of International Programs. 2010 tax file free The certificate will establish your exemption from the foreign social security tax. 2010 tax file free Send the request to the: Social Security Administration Office of International Programs P. 2010 tax file free O. 2010 tax file free Box 17741 Baltimore, MD 21235-7741 Prev  Up  Next   Home   More Online Publications