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2040 Ez Form

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2040 Ez Form

2040 ez form 2. 2040 ez form   Fuel Tax Credits and Refunds Table of Contents Gasoline and Aviation Gasoline Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation)Sales by Registered Ultimate Vendors Diesel-Water Fuel Emulsion Kerosene for Use in AviationSales by Registered Ultimate Vendors Other Fuels (Including Alternative Fuels) Refunds of Second TaxOptional reporting. 2040 ez form Providing information. 2040 ez form Definitions of Nontaxable UsesCustom application of fertilizer and pesticide. 2040 ez form Fuel used between airfield and farm. 2040 ez form Fuel not used for farming. 2040 ez form Vehicles not considered highway vehicles. 2040 ez form Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture CreditHow to Claim the Credit Filing Claims Claiming A Refund Claiming a Credit on Form 4136 Including the Credit or Refund in Income Federal excise taxes are imposed on certain fuels as discussed in chapter 1. 2040 ez form This chapter lists the nontaxable uses of each fuel and defines the nontaxable uses. 2040 ez form Information on the refund of second tax is included. 2040 ez form This chapter also explains credits and refunds for the biodiesel or renewable diesel mixture credits, and the alternative fuel mixture and alternative fuel credits. 2040 ez form Information on how to make a claim for credit or refund is included in this chapter and in the instructions for: Form 720, Form 4136, and Form 8849. 2040 ez form Exported taxable fuel. 2040 ez form   The claim rates for exported taxable fuel are listed on Schedule C (Form 720), Schedule 1 (Form 8849), and Form 4136. 2040 ez form Taxpayers making a claim for exported taxable fuel must include with their records proof of exportation. 2040 ez form Proof of exportation includes: A copy of the export bill of lading issued by the delivering carrier, A certificate by the agent or representative of the export carrier showing actual exportation of the fuel, A certificate of lading signed by a customs officer of the foreign country to which the fuel is exported, or A statement of the foreign consignee showing receipt of the fuel. 2040 ez form Gasoline and Aviation Gasoline Ultimate Purchasers. 2040 ez form   The following are the uses of gasoline (defined earlier) for which a credit or refund may be allowable to an ultimate purchaser. 2040 ez form On a farm for farming purposes (credit only). 2040 ez form Off-highway business use. 2040 ez form Export. 2040 ez form In a boat engaged in commercial fishing. 2040 ez form In certain intercity and local buses. 2040 ez form In a school bus. 2040 ez form Exclusive use by a qualified blood collector organization. 2040 ez form In a highway vehicle owned by the United States that is not used on a highway. 2040 ez form Exclusive use by a nonprofit educational organization (see Sales by registered ultimate vendors and Credit Card Purchases, later). 2040 ez form Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by registered ultimate vendors and Credit Card Purchases, later). 2040 ez form In an aircraft or vehicle owned by an aircraft museum. 2040 ez form   The following are the uses of aviation gasoline for which a credit or refund may be allowable to an ultimate purchaser. 2040 ez form On a farm for farming purposes (credit only). 2040 ez form Export. 2040 ez form In foreign trade. 2040 ez form Certain helicopter and fixed-wing air ambulance uses. 2040 ez form In commercial aviation (other than foreign trade). 2040 ez form Exclusive use by a qualified blood collector organization. 2040 ez form Exclusive use by a nonprofit education organization (see Sales by registered ultimate vendors and Credit card purchases, later). 2040 ez form Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by registered ultimate vendors and Credit and purchases, later). 2040 ez form In an aircraft owned by an aircraft museum. 2040 ez form In military aircraft. 2040 ez form Claims by persons who paid the tax to the government. 2040 ez form   Except for sales to nonprofit educational organizations and states and local governments, a credit or refund is allowable to the person that paid the tax to the government if the gasoline was sold to the ultimate purchaser (including an exporter) by either that person or by a retailer and the fuel was exported; used or sold for use as supplies for vessels or aircraft, including military aircraft, commercial fishing, and foreign trade; sold to a qualified blood collector organization; or used or sold for use in the production of Other Fuels. 2040 ez form See Filing Claims, later. 2040 ez form Sales by registered ultimate vendors. 2040 ez form   This is an ultimate vendor that sells gasoline or aviation gasoline to any of the following and that is purchased without the use of a credit card. 2040 ez form A state or local government for its exclusive use (including essential government use by an Indian tribal government). 2040 ez form A nonprofit educational organization for its exclusive use. 2040 ez form   The registered ultimate vendor may make the claim if the ultimate purchaser did not use a credit card and waives its right to the credit or refund by providing the registered ultimate vendor with a certificate. 2040 ez form A sample certificate is included as Model Certificate M in the Appendix. 2040 ez form The registered ultimate vendor must have the certificate at the time the credit or refund is claimed. 2040 ez form   The ultimate vendor must be registered by the IRS. 2040 ez form See Registration Requirements, earlier. 2040 ez form Credit card purchases. 2040 ez form   If gasoline and aviation gasoline are purchased with a credit card issued to a state or local government for its exclusive use (including essential government use by an Indian tribal government), or a nonprofit educational organization for its exclusive use, the person who extended credit to the ultimate purchaser (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the gasoline or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. 2040 ez form   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. 2040 ez form How to make the claim. 2040 ez form   If the claim is made by the credit card issuer, see Schedule C  (Form 720) or Schedule 8 (Form 8849). 2040 ez form Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) For conditions to an allowance of a credit or refund on exported dyed diesel fuel and dyed kerosene, see Exported taxable fuel, earlier. 2040 ez form Ultimate purchasers. 2040 ez form   The following are nontaxable uses of diesel fuel and kerosene (defined earlier) for which a credit or refund may be allowable to an ultimate purchaser. 2040 ez form On a farm for farming purposes. 2040 ez form Off-highway business use. 2040 ez form Export. 2040 ez form In a qualified local bus. 2040 ez form In a school bus. 2040 ez form Other than as a fuel in a propulsion engine of a diesel-powered highway vehicle (such as home heating oil). 2040 ez form Exclusive use by a qualified blood collector organization. 2040 ez form In a highway vehicle owned by the United States that is not used on a highway. 2040 ez form Exclusive use by a nonprofit educational organization (see Sales by Registered Ultimate Vendors and Credit Card Purchases, later). 2040 ez form Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by Registered Ultimate Vendors and Credit Card Purchases, later). 2040 ez form In a vehicle owned by an aircraft museum. 2040 ez form As a fuel in a propulsion engine of a diesel-powered train. 2040 ez form Sales by Registered Ultimate Vendors The following are the sales for which a credit or refund may be allowable to the registered ultimate vendor only. 2040 ez form Undyed diesel fuel or undyed kerosene sold for the exclusive use by a state or local government (if credit card rules (defined later) do not apply), Undyed kerosene sold from a blocked pump (defined below), or Undyed diesel fuel or undyed kerosene used in certain intercity and local buses, only if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver. 2040 ez form Registered ultimate vendor (state use). 2040 ez form   This is a person that sells undyed diesel fuel or undyed kerosene to a state or local government for its exclusive use (including essential government use by an Indian tribal government). 2040 ez form The diesel fuel or kerosene must be purchased by the state without the use of a credit card, issued to the state by the credit card issuer, in order for the ultimate vendor to make the claim. 2040 ez form The ultimate vendor must be registered by the IRS. 2040 ez form See Registration Requirements, earlier. 2040 ez form Registered ultimate vendor (blocked pump). 2040 ez form   This is an ultimate vendor that sells undyed kerosene from a blocked pump. 2040 ez form   A credit or refund may be allowable to a registered ultimate vendor (blocked pump) if the vendor sold to a buyer undyed kerosene from a blocked pump for use other than as a fuel in a diesel-powered highway vehicle and the vendor had no reason to believe the kerosene would not be used in that manner. 2040 ez form Blocked pump. 2040 ez form   A blocked pump is a fuel pump that meets all the following requirements. 2040 ez form It is used to make retail sales of undyed kerosene for use by the buyer in any nontaxable use. 2040 ez form It is at a fixed location. 2040 ez form It is identified with a legible and conspicuous notice stating, “UNDYED UNTAXED KEROSENE, NONTAXABLE USE ONLY. 2040 ez form ” It meets either of the following conditions. 2040 ez form It cannot reasonably be used to dispense fuel directly into the fuel supply tank of a diesel-powered highway vehicle or train. 2040 ez form It is locked by the vendor after each sale and unlocked by the vendor only in response to a buyer's request for undyed kerosene for use other than as a fuel in a diesel-powered highway vehicle or train. 2040 ez form Registered ultimate vendor (certain intercity and local buses). 2040 ez form   This is an ultimate vendor that sells undyed diesel fuel or undyed kerosene to the ultimate purchaser for use in certain intercity and local buses. 2040 ez form   The registered ultimate vendor may make the claim if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver. 2040 ez form A sample waiver is included as Model Waiver N in the Appendix. 2040 ez form The registered ultimate vendor must have the waiver at the time the credit or payment is claimed. 2040 ez form Credit Card Purchases. 2040 ez form   If undyed diesel fuel or kerosene is purchased with a credit card issued to a state, the person who extended credit to the state (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the diesel fuel or kerosene, or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. 2040 ez form   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. 2040 ez form Diesel-Water Fuel Emulsion A claim for credit or refund may be made for the nontaxable use of a diesel-water fuel emulsion and for undyed diesel fuel used to produce a diesel-water fuel emulsion. 2040 ez form The claim rate for nontaxable use of a diesel-water fuel emulsion taxed at $. 2040 ez form 198 per gallon is $. 2040 ez form 197 (if exported, the claim rate is $. 2040 ez form 198). 2040 ez form The following are the nontaxable uses for a diesel-water fuel emulsion for which a credit or refund may be allowable to an ultimate purchaser. 2040 ez form On a farm for farming purposes. 2040 ez form Off-highway business use. 2040 ez form Export. 2040 ez form In a qualified local bus. 2040 ez form In a school bus. 2040 ez form Other than as fuel in the propulsion engine of a train or diesel-powered highway vehicle (but not off-highway use). 2040 ez form Exclusive use by a qualified blood collector organization. 2040 ez form In a highway vehicle owned by the United States that is not used on a highway. 2040 ez form Exclusive use by a nonprofit educational organization. 2040 ez form Exclusive use by a state, political subdivision of a state, or the District of Columbia. 2040 ez form In an aircraft or vehicle owned by an aircraft museum. 2040 ez form Blender claims. 2040 ez form   The claim rate for undyed diesel fuel taxed at $. 2040 ez form 244 and used to produce a diesel-water fuel emulsion is $. 2040 ez form 046 per gallon of diesel fuel so used. 2040 ez form The blender must be registered by the IRS in order to make the claim. 2040 ez form The blender must attach a statement to the claim certifying that: The diesel-water fuel emulsion contains at least 14% water, The emulsion additive is registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003, Undyed diesel fuel taxed at $. 2040 ez form 244 was used to produce the diesel-water fuel emulsion, and The diesel-water fuel emulsion was used or sold for use in the blender's trade or business. 2040 ez form Kerosene for Use in Aviation Ultimate purchasers. 2040 ez form   Ultimate purchasers of kerosene used in certain aviation uses may make a claim if the rate of tax on their use is less than the rate of tax that was charged on the kerosene. 2040 ez form   The ultimate purchaser of the kerosene used in commercial aviation (other than foreign trade) and noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) is eligible to make a claim if the ultimate purchaser certifies that the right to make the claim has not been waived. 2040 ez form Generally, the ultimate purchaser is the aircraft operator. 2040 ez form   The following are the nontaxable uses of kerosene used in noncommercial aviation for which a credit or refund may be allowable to the ultimate purchaser. 2040 ez form On a farm for farming purposes. 2040 ez form Certain helicopter and fixed-wing aircraft uses. 2040 ez form Exclusive use by a qualified blood collector organization. 2040 ez form Exclusive use by a nonprofit educational organization. 2040 ez form In an aircraft owned by an aircraft museum. 2040 ez form In military aircraft. 2040 ez form Kerosene for use partly in commercial aviation and partly in nonexempt, noncommercial aviation. 2040 ez form   If the fuel is used partly for use in commercial aviation and partly for use in nonexempt, noncommercial aviation, the operator may identify, either at the time of purchase or after the kerosene has been used, the amount that will be (or has been) used in commercial aviation. 2040 ez form At the same time, the operator would either make the claim or waive the right to make the claim for credit or refund of the kerosene for use in commercial and nonexempt, noncommercial aviation. 2040 ez form   If the operator does not identify the amount of kerosene that will be (or has been) used in commercial aviation, the operator may provide a certificate to the ultimate vendor similar to Model Certificate Q in the Appendix. 2040 ez form For kerosene purchased with the certificate, used in commercial aviation, and taxed at $. 2040 ez form 244 per gallon, use of the certificate will be treated as a waiver of the right to claim a credit or refund for the $. 2040 ez form 025 per gallon part of the tax. 2040 ez form The ultimate vendor may make this claim. 2040 ez form The operator may make a claim for the $. 2040 ez form 175 tax per gallon of the kerosene, but cannot waive the right to make the claim for the $. 2040 ez form 175 tax per gallon. 2040 ez form Sales by Registered Ultimate Vendors Kerosene for use in commercial aviation or noncommercial aviation. 2040 ez form   The registered ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may make this claim if the ultimate purchaser waives its right to the credit or payment by providing the registered ultimate vendor with a waiver. 2040 ez form A sample waiver is included as Model Waiver L in the Appendix. 2040 ez form The registered ultimate vendor must have the waiver at the time the credit or payment is claimed. 2040 ez form   Noncommercial aviation means any use of an aircraft not described as commercial aviation. 2040 ez form For the definition of commercial aviation, see Commercial aviation on page 11. 2040 ez form Kerosene for use in nonexempt, noncommercial aviation. 2040 ez form   Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in nonexempt, noncommercial aviation. 2040 ez form The ultimate vendor must be registered by the IRS (activity letter UA) and have the required certificate from the ultimate purchaser. 2040 ez form A sample certificate is included as Model Certificate Q in the Appendix. 2040 ez form The registered ultimate vendor must have the certificate at the time the credit or payment is claimed. 2040 ez form Kerosene for use in aviation by a state or local government. 2040 ez form   Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in aviation to a state or local government for its exclusive use (including essential government use by an Indian tribal government). 2040 ez form The kerosene for use in aviation must be purchased by the state without the use of a credit card in order for the ultimate vendor to make the claim. 2040 ez form The ultimate vendor must be registered by the IRS (activity letter UV) and have the required certificate from the ultimate purchaser. 2040 ez form A sample certificate is included as Model Certificate P in the Appendix. 2040 ez form The registered ultimate vendor must have the certificate at the time the credit or payment is claimed. 2040 ez form Credit card purchases. 2040 ez form   If taxed kerosene for use in aviation is purchased with a credit card issued to a state, the person who extended credit to the state (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the kerosene, or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. 2040 ez form   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. 2040 ez form Other Fuels (Including Alternative Fuels) Credit or refund for nontaxable use of taxed Other Fuels may be allowable to an ultimate purchaser. 2040 ez form While tax is generally imposed on delivery, Other Fuels are taxed prior to delivery in the case of certain bulk sales described in chapter 1. 2040 ez form The following are the nontaxable uses of Other Fuels for which a credit or refund may be allowable to the ultimate purchaser. 2040 ez form On a farm for farming purposes. 2040 ez form Off-highway business use. 2040 ez form In a boat engaged in commercial fishing. 2040 ez form In certain intercity and local buses. 2040 ez form In a school bus. 2040 ez form In a qualified local bus. 2040 ez form Exclusive use by a qualified blood collector organization. 2040 ez form Exclusive use by a nonprofit educational organization. 2040 ez form Exclusive use by a state, political subdivision of a state, or the District of Columbia. 2040 ez form In an aircraft or vehicle owned by an aircraft museum. 2040 ez form Use in any boat operated by the United States for its exclusive use or any vessel of war of any foreign nation. 2040 ez form See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit, later. 2040 ez form Refunds of Second Tax The tax on dyed diesel fuel for inland waterways fuel use applies at the rate listed on Form 720. 2040 ez form This is in addition to all other taxes imposed on the sale or use of the fuel. 2040 ez form The section 4081(e) refund (discussed below) cannot be claimed. 2040 ez form If the tax is paid and reported to the government on more than one taxable event for a taxable fuel under section 4081, the person paying the “second tax” may claim a refund (without interest) of that tax if certain conditions and reporting requirements are met. 2040 ez form No credit against any tax is allowed for this tax. 2040 ez form For information about taxable events, see the discussions under Gasoline, Diesel Fuel and Kerosene and Kerosene for Use in Aviation in chapter 1. 2040 ez form Conditions to allowance of refund. 2040 ez form   A claim for refund of the tax is allowed only if all the following conditions are met. 2040 ez form A tax on the fuel was paid to the government and not credited or refunded (the “first tax”). 2040 ez form After the first tax was imposed, another tax was imposed on the same fuel and was paid to the government (the “second tax”). 2040 ez form The person that paid the second tax filed a timely claim for refund containing the information required (see Refund claim, later). 2040 ez form The person that paid the first tax has met the reporting requirements, discussed next. 2040 ez form Reporting requirements. 2040 ez form   Generally, the person that paid the first tax must file a “First Taxpayer's Report” with its Form 720 for the quarter to which the report relates. 2040 ez form A model first taxpayer's report is shown in the Appendix as Model Certificate B. 2040 ez form The report must contain all information needed to complete the model. 2040 ez form   By the due date for filing the Form 720, you must also send a separate copy of the report to the following address. 2040 ez form Department of the Treasury Internal Revenue Service  Cincinnati, OH 45999-0555 Write “EXCISE – FIRST TAXPAYER'S REPORT” across the top of that copy. 2040 ez form Optional reporting. 2040 ez form   A first taxpayer's report is not required for the tax imposed on: Removal at a terminal rack, Nonbulk entries into the United States, and Removals or sales by blenders. 2040 ez form However, if the person liable for the tax expects that another tax will be imposed on that fuel, that person should (but is not required to) file a first taxpayer's report. 2040 ez form Providing information. 2040 ez form   The first taxpayer must give a copy of the report to the buyer of the fuel within the bulk transfer/terminal system or to the owner of the fuel immediately before the first tax was imposed, if the first taxpayer is not the owner at that time. 2040 ez form If an optional report is filed, a copy should (but is not required to) be given to the buyer or owner. 2040 ez form   A person that receives a copy of the first taxpayer's report and later sells the fuel within the bulk transfer/terminal system must give the copy and a “Statement of Subsequent Seller” to the buyer. 2040 ez form If the later sale is outside the bulk transfer/terminal system and that person expects that another tax will be imposed, that person should (but is not required to) give the copy and the statement to the buyer. 2040 ez form A model statement of subsequent seller is shown in the Appendix as Model Certificate A. 2040 ez form The statement must contain all information necessary to complete the model. 2040 ez form   If the first taxpayer's report relates to fuel sold to more than one buyer, copies of that report must be made when the fuel is divided. 2040 ez form Each buyer must be given a copy of the report. 2040 ez form Refund claim. 2040 ez form   You must have filed Form 720 and paid the second tax before you file for a refund of that tax. 2040 ez form You must make your claim for refund on Form 8849. 2040 ez form Complete Schedule 5 (Form 8849) and attach it to your Form 8849. 2040 ez form Do not include this claim with a claim under another tax provision. 2040 ez form You must not have included the second tax in the price of the fuel and must not have collected it from the purchaser. 2040 ez form You must submit the following information with your claim. 2040 ez form A copy of the first taxpayer's report (discussed earlier). 2040 ez form A copy of the statement of subsequent seller if the fuel was bought from someone other than the first taxpayer. 2040 ez form Definitions of Nontaxable Uses This section provides definitions of the terms used in Table 2-1 for nontaxable uses. 2040 ez form If applicable, the type of use number from Table 2-1 is indicated in each heading. 2040 ez form Type of use table. 2040 ez form   The first column of the table is the number you enter on Form 4136, Form 8849, or Schedule C (Form 720) for that type of use. 2040 ez form For type of use 2, the mobile machinery parenthetical applies only to Form 8849 and Form 720. 2040 ez form Table 2-1. 2040 ez form Type of Use Table No. 2040 ez form Type of Use 1 On a farm for farming purposes 2 Off-highway business use (for business use other than in a highway vehicle registered or required to be registered for highway use) (other than use in mobile machinery) 3 Export 4 In a boat engaged in commercial fishing 5 In certain intercity and local buses 6 In a qualified local bus 7 In a bus transporting students and employees of schools (school buses) 8 For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel in the propulsion engine of a train or diesel-powered highway vehicle (but not off-highway business use) 9 In foreign trade 10 Certain helicopter and fixed-wing aircraft uses 11 Exclusive use by a qualified blood collector organization 12 In a highway vehicle owned by the United States that is not used on a highway 13 Exclusive use by a nonprofit educational organization 14 Exclusive use by a state, political subdivision of a state, or the District of Columbia 15 In an aircraft or vehicle owned by an aircraft museum 16 In military aircraft On a farm for farming purposes (No. 2040 ez form 1). 2040 ez form   On a farm for farming purposes means fuel used in carrying on a trade or business of farming, on a farm in the United States, and for farming purposes. 2040 ez form Farm. 2040 ez form   A farm includes livestock, dairy, fish, poultry, fruit, fur-bearing animals, and truck farms; orchards; plantations; ranches; nurseries; ranges; and feed yards for fattening cattle. 2040 ez form It also includes structures such as greenhouses used primarily for the raising of agricultural or horticultural commodities. 2040 ez form A fish farm is an area where fish are grown or raised — not merely caught or harvested. 2040 ez form Farming purposes. 2040 ez form   As an owner, tenant, or operator, you use fuel on a farm for farming purposes if you use it in any of the following ways. 2040 ez form To cultivate the soil or to raise or harvest any agricultural or horticultural commodity. 2040 ez form To raise, shear, feed, care for, train, or manage livestock, bees, poultry, fur-bearing animals, or wildlife. 2040 ez form To operate, manage, conserve, improve, or maintain your farm and its tools and equipment. 2040 ez form To handle, dry, pack, grade, or store any raw agricultural or horticultural commodity. 2040 ez form For this use to qualify, you must have produced more than half the commodity so treated during the tax year. 2040 ez form Commodity means a single raw product. 2040 ez form For example, apples and peaches are two separate commodities. 2040 ez form To plant, cultivate, care for, or cut trees or to prepare (other than sawing logs into lumber, chipping, or other milling) trees for market, but only if the planting, etc. 2040 ez form , is incidental to your farming operations. 2040 ez form Your tree operations will be incidental only if they are minor in nature when compared to the total farming operations. 2040 ez form   If any other person, such as a neighbor or custom operator, performs a service for you on your farm for any of the purposes listed in (1) or (2), you are considered to be the ultimate purchaser that used the fuel on a farm for farming purposes. 2040 ez form However, see Custom application of fertilizer and pesticide, next. 2040 ez form   If doubt exists whether the owner, the tenant, or the operator of the farm bought the fuel, determine who bore the cost of the fuel. 2040 ez form For example, if the owner of a farm and the tenant equally share the cost of gasoline that is used on a farm for farming purposes, each can claim a credit for the tax on one-half the fuel used. 2040 ez form Custom application of fertilizer and pesticide. 2040 ez form   Fuel used on a farm for farming purposes includes fuel used in the application of fertilizer, pesticides, or other substances, including aerial applications. 2040 ez form Generally, the applicator is treated as having used the fuel on a farm for farming purposes. 2040 ez form For aviation gasoline, the aerial applicator makes the claim as the ultimate purchaser. 2040 ez form For kerosene used in aviation, the ultimate purchaser may make the claim or waive their right to make the claim to the registered ultimate vendor. 2040 ez form Fuel used between airfield and farm. 2040 ez form   Fuel used by an aerial applicator for the direct flight between the airfield and one or more farms is treated as a farming purpose. 2040 ez form Fuel not used for farming. 2040 ez form   Fuel is not used on a farm for farming purposes if it is used in any of the following ways. 2040 ez form Off the farm, such as on the highway or in noncommercial aviation, other than fuel used between the airfield and farm described above, even if the fuel is used in transporting livestock, feed, crops, or equipment. 2040 ez form For personal use, such as mowing the lawn. 2040 ez form In processing, packaging, freezing, or canning operations. 2040 ez form In processing crude gum into gum spirits of turpentine or gum resin or in processing maple sap into maple syrup or maple sugar. 2040 ez form Off-highway business use (No. 2040 ez form 2). 2040 ez form   Off-highway business use means fuel used in a trade or business or in an income-producing activity other than as a fuel in a highway vehicle registered or required to be registered for use on public highways. 2040 ez form The terms “highway vehicle,” “public highway,” and “registered” are defined below. 2040 ez form Do not consider any use in a boat as an off-highway business use. 2040 ez form   Off-highway business use includes fuels used in any of the following ways. 2040 ez form In stationary machines such as generators, compressors, power saws, and similar equipment. 2040 ez form For cleaning purposes. 2040 ez form In forklift trucks, bulldozers, and earthmovers. 2040 ez form   Generally, this use does not include nonbusiness use of fuel, such as use by minibikes, snowmobiles, power lawn mowers, chain saws, and other yard equipment. 2040 ez form Example. 2040 ez form Caroline owns a landscaping business. 2040 ez form She uses power lawn mowers and chain saws in her business. 2040 ez form The gasoline used in the power lawn mowers and chain saws qualifies as fuel used in an off-highway business use. 2040 ez form The gasoline used in her personal lawn mower at home does not qualify. 2040 ez form Highway vehicle. 2040 ez form   A highway vehicle is any self-propelled vehicle designed to carry a load over public highways, whether or not it is also designed to perform other functions. 2040 ez form Examples of vehicles designed to carry a load over public highways are passenger automobiles, motorcycles, buses, and highway-type trucks and truck tractors. 2040 ez form A vehicle is a highway vehicle even though the vehicle's design allows it to perform a highway transportation function for only one of the following. 2040 ez form A particular type of load, such as passengers, furnishings, and personal effects (as in a house, office, or utility trailer). 2040 ez form A special kind of cargo, goods, supplies, or materials. 2040 ez form Some off-highway task unrelated to highway transportation, except as discussed next. 2040 ez form Vehicles not considered highway vehicles. 2040 ez form   Generally, the following kinds of vehicles are not considered highway vehicles for purposes of the credit or refund of fuel taxes. 2040 ez form Specially designed mobile machinery for nontransportation functions. 2040 ez form A self-propelled vehicle is not a highway vehicle if all the following apply. 2040 ez form The chassis has permanently mounted to it machinery or equipment used to perform certain operations (construction, manufacturing, drilling, mining, timbering, processing, farming, or similar operations) if the operation of the machinery or equipment is unrelated to transportation on or off the public highways. 2040 ez form The chassis has been specially designed to serve only as a mobile carriage and mount (and power source, if applicable) for the machinery or equipment, whether or not the machinery or equipment is in operation. 2040 ez form The chassis could not, because of its special design and without substantial structural modification, be used as part of a vehicle designed to carry any other load. 2040 ez form The vehicle must have traveled less than 7,500 miles on public highways during the taxable year. 2040 ez form Vehicles specially designed for off-highway transportation. 2040 ez form A vehicle is not treated as a highway vehicle if the vehicle is specially designed for the primary function of transporting a particular type of load other than over the public highway and because of this special design, the vehicle's capability to transport a load over a public highway is substantially limited or impaired. 2040 ez form To make this determination, you can take into account the vehicle's size, whether the vehicle is subject to licensing, safety, or other requirements, and whether the vehicle can transport a load at a sustained speed of at least 25 miles per hour. 2040 ez form It does not matter that the vehicle can carry heavier loads off highway than it is allowed to carry over the highway. 2040 ez form Nontransportation trailers and semitrailers. 2040 ez form A trailer or semi-trailer is not treated as a highway vehicle if it is specially designed to function only as an enclosed stationary shelter for carrying on a nontransportation function at an off-highway site. 2040 ez form For example, a trailer that is capable only of functioning as an office for an off-highway construction operation is not a highway vehicle. 2040 ez form Public highway. 2040 ez form   A public highway includes any road in the United States that is not a private roadway. 2040 ez form This includes federal, state, county, and city roads and streets. 2040 ez form Registered. 2040 ez form   A vehicle is considered registered when it is registered or required to be registered for highway use under the law of any state, the District of Columbia, or any foreign country in which it is operated or situated. 2040 ez form Any highway vehicle operated under a dealer's tag, license, or permit is considered registered. 2040 ez form A highway vehicle is not considered registered solely because a special permit allows the vehicle to be operated at particular times and under specified conditions. 2040 ez form Dual use of propulsion motor. 2040 ez form   Off-highway business use does not include any fuel used in the propulsion motor of a registered highway vehicle even though that motor also operates special equipment by means of a power take-off or power transfer. 2040 ez form It does not matter if the special equipment is mounted on the vehicle. 2040 ez form Example. 2040 ez form The motor of a registered concrete-mixer truck operates both the engine and the mixing unit by means of a power take-off. 2040 ez form The fuel used in the motor to run the mixer is not off-highway business use. 2040 ez form Use in separate motor. 2040 ez form   Off-highway business use includes fuel used in a separate motor to operate special equipment, such as a refrigeration unit, pump, generator, or mixing unit. 2040 ez form If you draw fuel from the same tank that supplies fuel to the propulsion motor, you must figure the quantity used in the separate motor operating the special equipment. 2040 ez form You may make a reasonable estimate based on your operating experience and supported by your records. 2040 ez form   You can use devices that measure the miles the vehicle has traveled (such as hubometers) to figure the gallons of fuel used to propel the vehicle. 2040 ez form Add to this amount the fuel consumed while idling or warming up the motor before propelling the vehicle. 2040 ez form The difference between your total fuel used and the fuel used to propel the vehicle is the fuel used in the separate motor. 2040 ez form Example. 2040 ez form Hazel owns a refrigerated truck. 2040 ez form It has a separate motor for the refrigeration unit. 2040 ez form The same tank supplies both motors. 2040 ez form Using the truck's hubometer, Hazel figures that 90% of the fuel was used to propel the truck. 2040 ez form Therefore, 10% of the fuel is used in an off-highway business use. 2040 ez form Fuel lost or destroyed. 2040 ez form   You cannot treat fuel lost or destroyed through spillage, fire, or other casualty as fuel used in an off-highway business use. 2040 ez form Export (No. 2040 ez form 3). 2040 ez form   Export means fuel transported from the United States with the intention that the fuel remain in a foreign country or possession of the United States. 2040 ez form Fuel is not exported if it is in the fuel supply tank of a vehicle or aircraft. 2040 ez form In a boat engaged in commercial fishing (No. 2040 ez form 4). 2040 ez form   In a boat engaged in commercial fishing means fuel used in taking, catching, processing, or transporting fish, shellfish, or other aquatic life for commercial purposes, such as selling or processing the catch, on a specific trip basis. 2040 ez form They include boats used in both fresh and salt water fishing. 2040 ez form They do not include boats used for both sport fishing and commercial fishing on the same trip. 2040 ez form In certain intercity and local buses (No. 2040 ez form 5). 2040 ez form   In certain intercity and local buses means fuel used in a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. 2040 ez form The bus must be engaged in one of the following activities. 2040 ez form Scheduled transportation along regular routes. 2040 ez form Nonscheduled operations if the seating capacity of the bus is at least 20 adults, not including the driver. 2040 ez form Vans and similar vehicles used for van-pooling or taxi service do not qualify. 2040 ez form Available to the general public. 2040 ez form   This means you offer service to more than a limited number of persons or organizations. 2040 ez form If a bus operator normally provides charter operations through travel agencies but has buses available for chartering by the general public, this service is available to the general public. 2040 ez form A bus does not qualify when its operator uses it to provide exclusive services to only one person, group, or organization. 2040 ez form Also, intercity bus transportation does not include transporting students and employees of schools or intercity transportation in a qualified local bus. 2040 ez form In a qualified local bus (No. 2040 ez form 6). 2040 ez form   In a qualified local bus means fuel used in a bus meeting all the following requirements. 2040 ez form It is engaged in furnishing (for compensation) intracity passenger land transportation available to the general public. 2040 ez form It operates along scheduled, regular routes. 2040 ez form It has a seating capacity of at least 20 adults (excluding the driver). 2040 ez form It is under contract with (or is receiving more than a nominal subsidy from) any state or local government to furnish the transportation. 2040 ez form Intracity passenger land transportation. 2040 ez form   This is the land transportation of passengers between points located within the same metropolitan area. 2040 ez form It includes transportation along routes that cross state, city, or county boundaries if the routes remain within the metropolitan area. 2040 ez form Under contract. 2040 ez form   A bus is under contract with a state or local government only if the contract imposes a bona fide obligation on the bus operator to furnish the transportation. 2040 ez form More than a nominal subsidy. 2040 ez form   A subsidy is more than nominal if it is reasonably expected to exceed an amount equal to 3 cents multiplied by the number of gallons of fuel used in buses on subsidized routes. 2040 ez form A company that operates its buses along subsidized and unsubsidized intracity routes may consider its buses qualified local buses only when the buses are used on the subsidized intracity routes. 2040 ez form In a school bus (No. 2040 ez form 7). 2040 ez form   In a school bus means fuel used in a bus engaged in the transportation of students or employees of schools. 2040 ez form A school is an educational organization with a regular faculty and curriculum and a regularly enrolled body of students who attend the place where the educational activities occur. 2040 ez form For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel (No. 2040 ez form 8). 2040 ez form   Diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train (not including off-highway business use) means undyed diesel fuel and undyed kerosene used: For home heating, lighting, and cooking; In boats; In stationary machines, such as generators and compressors; For cleaning purposes; or In minibikes and snowmobiles. 2040 ez form In foreign trade (No. 2040 ez form 9). 2040 ez form   In foreign trade means fuel used in civil aircraft employed in foreign trade or trade between the United States and any of its possessions. 2040 ez form The term trade includes the transportation of persons or property for hire and the making of the necessary preparations for such transportation. 2040 ez form In the case of aircraft registered in a foreign country, the country must allow reciprocal benefits for aircraft registered in the United States. 2040 ez form Certain helicopter and fixed-wing aircraft uses (No. 2040 ez form 10). 2040 ez form   Includes: Certain helicopter uses. 2040 ez form   Certain helicopter uses means fuel used by a helicopter for any of the following purposes. 2040 ez form Transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas. 2040 ez form Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). 2040 ez form Providing emergency medical transportation. 2040 ez form   During a use described in items (1) and (2), the helicopter must not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. 2040 ez form For item (1), treat each flight segment as a separate flight. 2040 ez form Fixed-wing aircraft uses. 2040 ez form   Fixed-wing aircraft uses means fuel used by a fixed-wing aircraft for any of the following purposes. 2040 ez form Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). 2040 ez form Providing emergency medical transportation. 2040 ez form The aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. 2040 ez form During a use described in item (1), the aircraft must not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. 2040 ez form Exclusive use by a qualified blood collector organization (No. 2040 ez form 11). 2040 ez form   Exclusive use by a qualified blood collector organization means fuel used by the qualified blood collector organization for its exclusive use in the collection, storage, or transportation of blood. 2040 ez form Qualified blood collector organization. 2040 ez form   A qualified blood collector organization is one that is: Described in section 501(c)(3) and exempt from tax under section 501(a), Primarily engaged in the activity of collecting human blood, Registered by the IRS, and Registered by the Food and Drug Administration to collect blood. 2040 ez form In a highway vehicle owned by the United States that is not used on a highway (No. 2040 ez form 12). 2040 ez form   In a highway vehicle owned by the United States that is not used on a highway means fuel used in a vehicle that was not used on public highways during the period covered by the claim. 2040 ez form This use applies whether or not the vehicle is registered or required to be registered for highway use. 2040 ez form Exclusive use by a nonprofit educational organization (No. 2040 ez form 13). 2040 ez form   Exclusive use by a nonprofit educational organization means fuel used by an organization exempt from income tax under section 501(a) that meets both of the following requirements. 2040 ez form It has a regular faculty and curriculum. 2040 ez form It has a regularly enrolled body of students who attend the place where the instruction normally occurs. 2040 ez form   A nonprofit educational organization also includes a school operated by a church or other organization described in section 501(c)(3) if the school meets the above requirements. 2040 ez form Exclusive use by a state, political subdivision of a state, or the District of Columbia (No. 2040 ez form 14). 2040 ez form   Exclusive use by a state, political subdivision of a state, or the District of Columbia means fuel purchased by the state or local government for its exclusive use. 2040 ez form A state or local government is any state, any political subdivision thereof, or the District of Columbia. 2040 ez form An Indian tribal government is treated as a state only if the fuel is used in an activity that involves the exercise of an essential tribal government function. 2040 ez form Gasoline, diesel fuel, and kerosene used by the American Red Cross is considered to be the use of these fuels by a state. 2040 ez form In an aircraft or vehicle owned by an aircraft museum (No. 2040 ez form 15). 2040 ez form   In an aircraft or vehicle owned by an aircraft museum means fuel used in an aircraft or vehicle that is owned by an organization that meets all the following requirements. 2040 ez form It is exempt from income tax as an organization described in section 501(c)(3). 2040 ez form It is operated as a museum under a state (or District of Columbia) charter. 2040 ez form It is operated exclusively for acquiring, exhibiting, and caring for aircraft of the type used for combat or transport in  World War II. 2040 ez form   The aircraft or vehicle (such as a ground servicing vehicle for aircraft) must be used exclusively for the purposes described in item (3). 2040 ez form In military aircraft (No. 2040 ez form 16). 2040 ez form   In a military aircraft means fuel used in an aircraft owned by the United States or any foreign nation and constituting a part of its armed forces. 2040 ez form In commercial aviation (other than foreign trade). 2040 ez form   See Commercial aviation, earlier, for the definition. 2040 ez form Use in a train. 2040 ez form   Use in a train means fuel used in the propulsion engine of equipment or machinery that rides on rails. 2040 ez form This includes use in a locomotive, work train, switching engine, and track maintenance machine. 2040 ez form Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit For alternative fuel mixtures produced after December 31, 2011, see How to Claim the Credit below. 2040 ez form The section 6426 credit for biodiesel and alternative fuel consists of the biodiesel or renewable diesel mixture credit, alternative fuel credit, and alternative fuel mixture credit. 2040 ez form Biodiesel or renewable diesel mixture credit claimant. 2040 ez form   Claimant produced a biodiesel mixture by mixing biodiesel with diesel fuel. 2040 ez form Claimant produced a renewable diesel mixture by mixing renewable diesel with liquid fuel (other than renewable diesel). 2040 ez form   The person that produced and sold or used the mixture in their trade or business is the only person eligible to make this claim. 2040 ez form The credit is based on the gallons of biodiesel or renewable diesel in the mixture. 2040 ez form Renewable diesel does not include any fuel derived from coprocessing biomass (as defined in section 45K(c)(3)) with a feedstock that is not biomass. 2040 ez form Claim requirements. 2040 ez form   See the Instructions for Form 720 for the biodiesel or renewable diesel mixture claim requirements. 2040 ez form Alternative fuel credit claimant. 2040 ez form   For the alternative fuel credit, the registered alternative fueler who (1) sold an alternative fuel at retail delivered it into the fuel supply tank of a motor vehicle or motorboat, (2) sold an alternative fuel, delivered it in bulk taxable use in a motor vehicle or motorboat, and received required statement from the buyer, (3) used an alternative fuel (not sold at retail or in bulk as previously described) motor vehicle or motorboat, or (4) sold an alternative fuel used as a fuel in aviation is the only person eligible to make this claim. 2040 ez form Carbon capture requirement. 2040 ez form   A credit for Fischer-Tropsch process liquid fuel derived from coal (including peat) can be claimed only if the fuel is derived from coal produced at a gasification facility that separates and sequesters at least 75% of the facility's total carbon dioxide emissions. 2040 ez form Alternative fuel credit. 2040 ez form   The registered alternative fueler is the person eligible to make the claim. 2040 ez form An alternative fueler is the person liable for tax on alternative fuel under the rules for taxable events for Other Fuels (discussed in chapter 1) or would be liable but for an exemption for nontaxable uses. 2040 ez form An alternative fueler includes a person who sells for use or uses an alternative fuel in aviation. 2040 ez form Alternative fuel mixture credit claimant. 2040 ez form   For the alternative fuel mixture credit, the registered alternative fueler that produced and sold or used the mixture as a fuel in their trade or business is the only person eligible to make this claim. 2040 ez form The credit is based on the gallons of alternative fuel in the mixture. 2040 ez form An alternative fuel mixture is a mixture of alternative fuel and section 4081 taxable fuel (gasoline, diesel fuel, or kerosene). 2040 ez form Registration. 2040 ez form   You must be registered by the IRS to be eligible to claim the section 6426 fuel credit. 2040 ez form See Registration Requirements in chapter 1. 2040 ez form Credits for fuel provide incentive for United States production. 2040 ez form   The section 6426 fuel credit may not be claimed for alternative fuel that is produced outside the United States for use as a fuel outside the United States. 2040 ez form The United States includes any possession of the United States. 2040 ez form Credit for fuels derived from paper or pulp production. 2040 ez form   Credit for alternative fuels and alternative fuel mixtures for any fuel derived from the production of paper or pulp are not available for fuel sold or used on or after December 31, 2009. 2040 ez form How to Claim the Credit Any biodiesel or renewable diesel mixture credit must first be claimed on Schedule C to reduce your taxable fuel liability reported on Form 720. 2040 ez form Any excess credit may be claimed on Schedule C (Form 720), Schedule 3 (Form 8849), Form 4136, or Form 8864, Biodiesel and Renewable Diesel Fuels Credit. 2040 ez form See Notice 2005-4 and the Instructions for Form 720 for more information. 2040 ez form Also see Notice 2013-26 on page 984 of I. 2040 ez form R. 2040 ez form B. 2040 ez form 2013-18 at www. 2040 ez form irs. 2040 ez form gov/pub/irs-irbs/irb13-18. 2040 ez form pdf; and see chapter 2, later. 2040 ez form Coordination with income tax credit. 2040 ez form   Only one credit may be taken for any amount of biodiesel or renewable diesel. 2040 ez form If any amount is claimed (or will be claimed) for any amount of biodiesel or renewable diesel on Form 720, Form 8849, or Form 4136, then a claim cannot be made on Form 8864 for that amount of biodiesel or renewable diesel. 2040 ez form   Any alternative fuel credit must first be claimed on Schedule C (Form 720) to reduce your section 4041 taxable fuel liability for alternative fuel and CNG reported on Form 720. 2040 ez form Any excess credit may claimed on Schedule C (Form 720), Schedule 3 (Form 8849), or Form 4136. 2040 ez form   For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit can be claimed on Schedule C (Form 720), not on Form 4136 or Schedule 3 (Form 8849), and only to the extent of your section 4081 taxable fuel liability for gasoline, diesel fuel and kerosene reported on Form 720. 2040 ez form   Calculate the limitation for alternative fuel mixtures separately and enter on Schedule C (Form 720), line 14, only the gallons of mixtures that do not exceed your section 4081 taxable fuel liability. 2040 ez form Filing Claims This section tells you how to make a claim for a credit or refund of excise taxes on fuels. 2040 ez form This section also covers recordkeeping requirements and when to include the credit or refund in your income. 2040 ez form Generally, you will provide all the information needed to claim a credit or refund when you properly complete Form 8849, Form 4136, Schedule C (Form 720), Form 6478, or Form 8864. 2040 ez form In some cases, you will have to attach additional information. 2040 ez form You need to keep records that support your claim for a credit or refund. 2040 ez form Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. 2040 ez form Ultimate purchaser. 2040 ez form   Ultimate purchasers may make claims for the nontaxable use of fuels on Form 4136, Schedule 1 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. 2040 ez form If you are an ultimate purchaser, you must keep the following records. 2040 ez form The number of gallons purchased and used during the period covered by your claim. 2040 ez form The dates of the purchases. 2040 ez form The names and addresses of suppliers and amounts purchased from each in the period covered by your claim. 2040 ez form The nontaxable use for which you used the fuel. 2040 ez form The number of gallons used for each nontaxable use. 2040 ez form It is important that your records show separately the number of gallons used for each nontaxable use that qualifies as a claim. 2040 ez form If the fuel is exported, you must have proof of exportation. 2040 ez form   For more information about keeping records, see Publication 583, Starting a Business and Keeping Records, or chapter 1 of Publication 17, Your Federal Income Tax for Individuals. 2040 ez form Exceptions. 2040 ez form    Generally, the ultimate purchaser may not claim a credit or refund for undyed diesel fuel, undyed kerosene, or kerosene for use in aviation sold for the exclusive use of a state or local government. 2040 ez form However, see Claims by credit card issuers, later, for an exception. 2040 ez form The ultimate purchaser may not claim a credit or refund as follows. 2040 ez form The ultimate purchaser of gasoline or aviation gasoline used by a state or local government for its exclusive use or by a nonprofit educational organization for its exclusive use may waive its right to make a claim by providing a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate M. 2040 ez form A new certificate is required each year or when any information in the current certificate expires. 2040 ez form The ultimate purchaser of kerosene for use in commercial aviation or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver L. 2040 ez form A new waiver is required each year or when any information in the current waiver expires. 2040 ez form The ultimate purchaser of undyed diesel fuel or undyed kerosene used in certain intercity and local buses may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver N. 2040 ez form A new waiver is required each year or when any information in the current waiver expires. 2040 ez form The ultimate purchaser of kerosene for use in nonexempt, noncommercial aviation must provide a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate Q. 2040 ez form A new certificate is required each year or when any information in the current certificate expires. 2040 ez form Registered ultimate vendor. 2040 ez form   Registered ultimate vendors may make claims for certain sales of fuels on Form 4136, Schedule 2 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. 2040 ez form If you are a registered ultimate vendor, you must keep certain information pertaining to the sale of the fuel. 2040 ez form   To make a claim, you must have sold the fuel at a tax-excluded price, repaid the tax to the buyer, or obtained the buyer's written consent to the allowance of the claim. 2040 ez form You are required to have a valid certificate or waiver in your possession in order to make the claim. 2040 ez form   In addition, you must have a registration number that has not been revoked or suspended. 2040 ez form See Form 637. 2040 ez form State use. 2040 ez form   To make a claim as an ultimate vendor (state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained below. 2040 ez form If you sell undyed diesel fuel, undyed kerosene, or kerosene for use in aviation for use by a state or local government, you must keep the following information. 2040 ez form The name and taxpayer identification number of each person (government unit) that bought the fuel. 2040 ez form The number of gallons sold to each person. 2040 ez form An unexpired certificate from the buyer. 2040 ez form See Model Certificate P in the Appendix. 2040 ez form The certificate expires on the earlier of 1 year after the date of the certificate or the date a new certificate is given to the registered ultimate vendor. 2040 ez form Nonprofit educational organization and state use. 2040 ez form   To make a claim as an ultimate vendor (nonprofit educational organization or state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained later. 2040 ez form If you sell gasoline or aviation gasoline to a nonprofit educational organization for its exclusive use or to a state or local government for its exclusive use, you must keep the following information. 2040 ez form The name and taxpayer identification number of each person (nonprofit educational organization or government unit) that bought the fuel. 2040 ez form The number of gallons sold to each person. 2040 ez form An unexpired certificate from the buyer. 2040 ez form See Model Certificate M in the Appendix. 2040 ez form  The certificate expires on the earlier of 1 year after the date of the certificate or the date a new certificate is given to the registered ultimate vendor. 2040 ez form Blocked pump. 2040 ez form   To make a claim as an ultimate vendor (blocked pump), you must have a UP registration number. 2040 ez form If you sell undyed kerosene (other than kerosene for use in aviation) from a pump that qualifies as a blocked pump because it is locked by you after each sale and is unlocked by you at the request of the buyer, you must keep the following information for each sale of more than 5 gallons. 2040 ez form The date of each sale. 2040 ez form The name and address of the buyer. 2040 ez form The number of gallons sold to that buyer. 2040 ez form Certain intercity and local bus use. 2040 ez form   To make a claim as an ultimate vendor of undyed diesel fuel or undyed kerosene used in certain intercity and local buses, you must have a UB registration number. 2040 ez form You must keep the following information. 2040 ez form The date of each sale. 2040 ez form The name and address of the buyer. 2040 ez form The number of gallons sold to the buyer. 2040 ez form A copy of the waiver signed by the buyer at the time the credit or payment is claimed. 2040 ez form See Model Waiver N in the Appendix. 2040 ez form Kerosene for use in commercial aviation or noncommercial aviation. 2040 ez form   To make a claim as an ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia), you must have a UA registration number. 2040 ez form See Kerosene for use in aviation, earlier, for a list of nontaxable uses. 2040 ez form You must keep the following information. 2040 ez form The date of each sale. 2040 ez form The name and address of the buyer. 2040 ez form The number of gallons sold to the buyer. 2040 ez form A copy of the waiver signed by the buyer at the time the credit or payment is claimed. 2040 ez form See Model Waiver L in the Appendix. 2040 ez form Kerosene for use in nonexempt, noncommercial aviation. 2040 ez form   To make a claim as an ultimate vendor of kerosene for use in nonexempt, noncommercial aviation, you must have a UA registration number. 2040 ez form You must keep the following information. 2040 ez form The date of each sale. 2040 ez form The name and address of the buyer. 2040 ez form The number of gallons sold to the buyer. 2040 ez form A copy of the certificate signed by the buyer at the time the credit or payment is claimed. 2040 ez form See Model Certificate Q in the Appendix. 2040 ez form Claims by credit card issuers. 2040 ez form   For sales of gasoline, aviation gasoline, diesel fuel, kerosene, or kerosene for use in aviation that are purchased by an exempt user with the use of a credit card, the registered credit card issuer is the only person who can make the claim. 2040 ez form An exempt user for this purpose is: For gasoline or aviation gasoline, a state or local government (including essential government use by an Indian tribal government) or a nonprofit educational organization; or For diesel fuel, kerosene, or kerosene for use in aviation, a state or local government (including essential government use by an Indian tribal government). 2040 ez form   If gasoline is purchased without the use of a credit card, then the registered ultimate vendor of the gasoline may make the claim for refund or credit. 2040 ez form However, if the gasoline is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim. 2040 ez form   If diesel fuel, kerosene, or kerosene for use in aviation is purchased without the use of a credit card, the registered ultimate vendor may make the claim for refund or credit. 2040 ez form A state is not allowed to make a claim for these fuels. 2040 ez form However, if the diesel fuel or kerosene is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim. 2040 ez form   The claim from the credit card issuer must contain the following information as it applies to the fuel covered in the claim. 2040 ez form The total number of gallons. 2040 ez form Its registration number. 2040 ez form A statement that it has not collected the amount of tax from the ultimate purchaser or has obtained the written consent of the ultimate purchaser to make the claim. 2040 ez form A statement that it has repaid or agreed to repay the amount of tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to make the claim, or has otherwise made arrangements which directly or indirectly provide the ultimate vendor with reimbursement of the tax. 2040 ez form Has in its possession an unexpired certificate similar to Model Certificate R in the Appendix and has no reason to believe any of the information in the certificate is false. 2040 ez form Taxpayer identification number. 2040 ez form   To file a claim, you must have a taxpayer identification number. 2040 ez form Your taxpayer identification number can be an: Employer identification number (EIN), Social security number (SSN), or Individual taxpayer identification number (ITIN), if you are an alien individual and do not have and are not eligible to get an SSN. 2040 ez form   If you normally file only a U. 2040 ez form S. 2040 ez form individual income tax return (such as Form 1040 or 1040NR), use your SSN or ITIN. 2040 ez form You get an SSN by filing Form SS-5, Application for a Social Security Card, with the Social Security Administration. 2040 ez form To get an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. 2040 ez form   If you operate a business, use your EIN. 2040 ez form If you do not have an EIN, you may apply for one online. 2040 ez form Go to the IRS website at irs. 2040 ez form gov/businesses/small and click on the “Employer ID Numbers (EINs)” link. 2040 ez form You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. 2040 ez form Claiming A Refund Generally, you may claim a refund of excise taxes on Form 8849. 2040 ez form Complete and attach to Form 8849 the appropriate Form 8849 schedules. 2040 ez form The instructions for Form 8849 and the separate instructions for each schedule explain the requirements for making a claim for refund. 2040 ez form If you file Form 720, you can use the Schedule C (Form 720) for your refund claims for the quarter. 2040 ez form See the Instructions for Form 720. 2040 ez form Do not claim a refund on Form 8849 for any amount for which you have filed or will file a claim on Schedule C (Form 720) or Form 4136. 2040 ez form The alternative fuel mixture credit must be claimed on Schedule C (Form 720) against your section 4081 taxable fuel liability for gasoline, diesel, and kerosene and any excess is not allowed. 2040 ez form The alternative fuel credit must first be claimed on Schedule C (Form 720) against your section 4041 taxable fuel liability for alternative fuel and CNG. 2040 ez form To the extent the alternative fuel credit exceeds this taxable fuel liability, a payment is allowed and may be claimed as a credit on Schedule C (Form 720), or as an income tax credit on Forms 4136, 6478, or 8864, as applicable. 2040 ez form Only one claim may be made for any particular amount of alternative fuel. 2040 ez form Claiming a Credit on Form 4136 For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit cannot be claimed on Form 4136. 2040 ez form See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2, earlier. 2040 ez form A credit may be claimed for certain uses and sales of fuels on Form 4136 when you file your income tax return at the end of the year. 2040 ez form If you meet certain requirements (discussed earlier), you may be able to make a claim during the year. 2040 ez form Credit only. 2040 ez form   You can claim the following taxes only as a credit on Form 4136. 2040 ez form Tax on fuels used for nontaxable uses if the total for your tax year is less than $750. 2040 ez form Tax on fuel you did not include in any claim for refund previously filed for any quarter of your tax year. 2040 ez form Tax on fuel you used in mobile machinery (off-highway business use) that traveled less than 7,500 miles on public highways. 2040 ez form Do not claim a credit for any amount for which you have filed a refund claim on Form 8849 or credit on Schedule C (Form 720). 2040 ez form When to file. 2040 ez form   You can claim a fuel tax credit on your income tax return for the year you used the fuel (or sold the fuel in the case of a registered ultimate vendor claim). 2040 ez form You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. 2040 ez form Generally, you must file an amended return by the later of 3 years from the date you filed your original return or within 2 years from the date you paid the income tax. 2040 ez form How to claim a credit. 2040 ez form   How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, or farmers' cooperative association. 2040 ez form Individuals. 2040 ez form   You claim the credit on the “Credits from” line of Form 1040. 2040 ez form Also check box b on that line. 2040 ez form If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit. 2040 ez form Partnerships. 2040 ez form   Partnerships (other than electing large partnerships) claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. 2040 ez form , showing each partner's share of the number of gallons of each fuel sold or used for a non
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The 2040 Ez Form

2040 ez form 5. 2040 ez form   Wages, Salaries, and Other Earnings Table of Contents Reminder Introduction Useful Items - You may want to see: Employee CompensationBabysitting. 2040 ez form Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Reminder Foreign income. 2040 ez form   If you are a U. 2040 ez form S. 2040 ez form citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U. 2040 ez form S. 2040 ez form law. 2040 ez form This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2, Wage and Tax Statement, or Form 1099 from the foreign payer. 2040 ez form This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). 2040 ez form If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. 2040 ez form For details, see Publication 54, Tax Guide for U. 2040 ez form S. 2040 ez form Citizens and Resident Aliens Abroad. 2040 ez form Introduction This chapter discusses compensation received for services as an employee, such as wages, salaries, and fringe benefits. 2040 ez form The following topics are included. 2040 ez form Bonuses and awards. 2040 ez form Special rules for certain employees. 2040 ez form Sickness and injury benefits. 2040 ez form The chapter explains what income is included in the employee's gross income and what is not included. 2040 ez form Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income Employee Compensation This section discusses various types of employee compensation including fringe benefits, retirement plan contributions, stock options, and restricted property. 2040 ez form Form W-2. 2040 ez form    If you are an employee, you should receive Form W-2 from your employer showing the pay you received for your services. 2040 ez form Include your pay on line 7 of Form 1040 or Form 1040A, or on line 1 of Form 1040EZ, even if you do not receive a Form W-2. 2040 ez form   If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. 2040 ez form These wages must be included on line 7 of Form 1040. 2040 ez form See Form 8919 for more information. 2040 ez form Childcare providers. 2040 ez form    If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. 2040 ez form If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. 2040 ez form You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. 2040 ez form Babysitting. 2040 ez form   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. 2040 ez form Miscellaneous Compensation This section discusses different types of employee compensation. 2040 ez form Advance commissions and other earnings. 2040 ez form   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. 2040 ez form    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. 2040 ez form If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), or you may be able to take a credit for that year. 2040 ez form See Repayments in chapter 12. 2040 ez form Allowances and reimbursements. 2040 ez form    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463. 2040 ez form If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. 2040 ez form Back pay awards. 2040 ez form    Include in income amounts you are awarded in a settlement or judgment for back pay. 2040 ez form These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. 2040 ez form They should be reported to you by your employer on Form W-2. 2040 ez form Bonuses and awards. 2040 ez form   Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. 2040 ez form These include prizes such as vacation trips for meeting sales goals. 2040 ez form If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. 2040 ez form However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. 2040 ez form Employee achievement award. 2040 ez form   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. 2040 ez form However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. 2040 ez form Your employer can tell you whether your award is a qualified plan award. 2040 ez form Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. 2040 ez form   However, the exclusion does not apply to the following awards: A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. 2040 ez form A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. 2040 ez form Example. 2040 ez form Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. 2040 ez form Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. 2040 ez form However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 – $1,600) in his income. 2040 ez form Differential wage payments. 2040 ez form   This is any payment made to you by an employer for any period during which you are, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages you would have received from the employer during that period. 2040 ez form These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. 2040 ez form The payments are reported as wages on Form W-2. 2040 ez form Government cost-of-living allowances. 2040 ez form   Most payments received by U. 2040 ez form S. 2040 ez form Government civilian employees for working abroad are taxable. 2040 ez form However, certain cost-of-living allowances are tax free. 2040 ez form Publication 516, U. 2040 ez form S. 2040 ez form Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. 2040 ez form Nonqualified deferred compensation plans. 2040 ez form   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. 2040 ez form This amount is shown on Form W-2, box 12, using code Y. 2040 ez form This amount is not included in your income. 2040 ez form   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. 2040 ez form This amount is included in your wages shown on Form W-2, box 1. 2040 ez form It is also shown on Form W-2, box 12, using code Z. 2040 ez form Note received for services. 2040 ez form    If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. 2040 ez form When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. 2040 ez form Do not include that part again in your income. 2040 ez form Include the rest of the payment in your income in the year of payment. 2040 ez form   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. 2040 ez form Severance pay. 2040 ez form   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. 2040 ez form Accrued leave payment. 2040 ez form    If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. 2040 ez form   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. 2040 ez form You can reduce gross wages by the amount you repaid in the same tax year in which you received it. 2040 ez form Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on the return and the wages on your Forms W-2. 2040 ez form Outplacement services. 2040 ez form   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. 2040 ez form    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). 2040 ez form Sick pay. 2040 ez form   Pay you receive from your employer while you are sick or injured is part of your salary or wages. 2040 ez form In addition, you must include in your income sick pay benefits received from any of the following payers: A welfare fund. 2040 ez form A state sickness or disability fund. 2040 ez form An association of employers or employees. 2040 ez form An insurance company, if your employer paid for the plan. 2040 ez form However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. 2040 ez form For more information, see Publication 525. 2040 ez form Social security and Medicare taxes paid by employer. 2040 ez form   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. 2040 ez form The payment also is treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. 2040 ez form However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. 2040 ez form Stock appreciation rights. 2040 ez form   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. 2040 ez form When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. 2040 ez form You include the cash payment in your income in the year you use the right. 2040 ez form Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. 2040 ez form Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. 2040 ez form Accounting period. 2040 ez form   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. 2040 ez form Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. 2040 ez form The general rule: benefits are reported for a full calendar year (January 1–December 31). 2040 ez form The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. 2040 ez form For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. 2040 ez form  Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. 2040 ez form   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). 2040 ez form Form W-2. 2040 ez form   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips, and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. 2040 ez form Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). 2040 ez form However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). 2040 ez form Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. 2040 ez form Benefits you receive from the plan may be taxable, as explained later under Sickness and Injury Benefits . 2040 ez form For information on the items covered in this section, other than Long-term care coverage, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. 2040 ez form Long-term care coverage. 2040 ez form    Contributions by your employer to provide coverage for long-term care services generally are not included in your income. 2040 ez form However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. 2040 ez form This amount will be reported as wages in box 1 of your Form W-2. 2040 ez form   Contributions you make to the plan are discussed in Publication 502, Medical and Dental Expenses. 2040 ez form Archer MSA contributions. 2040 ez form    Contributions by your employer to your Archer MSA generally are not included in your income. 2040 ez form Their total will be reported in box 12 of Form W-2 with code R. 2040 ez form You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. 2040 ez form File the form with your return. 2040 ez form Health flexible spending arrangement (health FSA). 2040 ez form   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. 2040 ez form Note. 2040 ez form Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. 2040 ez form The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. 2040 ez form For more information, see Notice 2012-40, 2012-26 I. 2040 ez form R. 2040 ez form B. 2040 ez form 1046, available at www. 2040 ez form irs. 2040 ez form gov/irb/2012-26 IRB/ar09. 2040 ez form html. 2040 ez form Health reimbursement arrangement (HRA). 2040 ez form   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. 2040 ez form Health savings accounts (HSA). 2040 ez form   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. 2040 ez form Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. 2040 ez form Contributions made by your employer are not included in your income. 2040 ez form Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. 2040 ez form Distributions not used for qualified medical expenses are included in your income. 2040 ez form See Publication 969 for the requirements of an HSA. 2040 ez form   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. 2040 ez form The contributions are treated as a distribution of money and are not included in the partner's gross income. 2040 ez form Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. 2040 ez form In both situations, the partner can deduct the contribution made to the partner's HSA. 2040 ez form   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. 2040 ez form The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. 2040 ez form Qualified HSA funding distribution. 2040 ez form   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. 2040 ez form See Publication 590 for the requirements for these qualified HSA funding distributions. 2040 ez form Failure to maintain eligibility. 2040 ez form   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. 2040 ez form If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. 2040 ez form This income is also subject to an additional 10% tax. 2040 ez form Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. 2040 ez form See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. 2040 ez form Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. 2040 ez form They also are included as social security and Medicare wages in boxes 3 and 5. 2040 ez form However, they are not included as wages in box 1. 2040 ez form To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. 2040 ez form File the form with your return. 2040 ez form De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. 2040 ez form In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. 2040 ez form Holiday gifts. 2040 ez form   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. 2040 ez form However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. 2040 ez form Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. 2040 ez form For more information, see Publication 970, Tax Benefits for Education. 2040 ez form Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. 2040 ez form However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. 2040 ez form For exceptions, see Entire cost excluded , and Entire cost taxed , later. 2040 ez form If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. 2040 ez form Also, it is shown separately in box 12 with code C. 2040 ez form Group-term life insurance. 2040 ez form   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. 2040 ez form Permanent benefits. 2040 ez form   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. 2040 ez form Your employer should be able to tell you the amount to include in your income. 2040 ez form Accidental death benefits. 2040 ez form   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. 2040 ez form Former employer. 2040 ez form   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. 2040 ez form Also, it is shown separately in box 12 with code C. 2040 ez form Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. 2040 ez form You must pay these taxes with your income tax return. 2040 ez form Include them on line 60, Form 1040, and follow the instructions for line 60. 2040 ez form For more information, see the Instructions for Form 1040. 2040 ez form Two or more employers. 2040 ez form   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. 2040 ez form If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. 2040 ez form You must figure how much to include in your income. 2040 ez form Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. 2040 ez form Figuring the taxable cost. 2040 ez form   Use the following worksheet to figure the amount to include in your income. 2040 ez form     Worksheet 5-1. 2040 ez form Figuring the Cost of Group-Term Life Insurance To Include in Income 1. 2040 ez form Enter the total amount of your insurance coverage from your employer(s) 1. 2040 ez form   2. 2040 ez form Limit on exclusion for employer-provided group-term life insurance coverage 2. 2040 ez form 50,000 3. 2040 ez form Subtract line 2 from line 1 3. 2040 ez form   4. 2040 ez form Divide line 3 by $1,000. 2040 ez form Figure to the nearest tenth 4. 2040 ez form   5. 2040 ez form Go to Table 5-1. 2040 ez form Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. 2040 ez form   6. 2040 ez form Multiply line 4 by line 5 6. 2040 ez form   7. 2040 ez form Enter the number of full months of coverage at this cost. 2040 ez form 7. 2040 ez form   8. 2040 ez form Multiply line 6 by line 7 8. 2040 ez form   9. 2040 ez form Enter the premiums you paid per month 9. 2040 ez form       10. 2040 ez form Enter the number of months you paid the premiums 10. 2040 ez form       11. 2040 ez form Multiply line 9 by line 10. 2040 ez form 11. 2040 ez form   12. 2040 ez form Subtract line 11 from line 8. 2040 ez form Include this amount in your income as wages 12. 2040 ez form      Table 5-1. 2040 ez form Cost of $1,000 of Group-Term Life Insurance for One Month Age Cost Under 25 $. 2040 ez form 05 25 through 29 . 2040 ez form 06 30 through 34 . 2040 ez form 08 35 through 39 . 2040 ez form 09 40 through 44 . 2040 ez form 10 45 through 49 . 2040 ez form 15 50 through 54 . 2040 ez form 23 55 through 59 . 2040 ez form 43 60 through 64 . 2040 ez form 66 65 through 69 1. 2040 ez form 27 70 and older 2. 2040 ez form 06 Example. 2040 ez form You are 51 years old and work for employers A and B. 2040 ez form Both employers provide group-term life insurance coverage for you for the entire year. 2040 ez form Your coverage is $35,000 with employer A and $45,000 with employer B. 2040 ez form You pay premiums of $4. 2040 ez form 15 a month under the employer B group plan. 2040 ez form You figure the amount to include in your income as shown in Worksheet 5-1. 2040 ez form Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated, later. 2040 ez form Worksheet 5-1. 2040 ez form Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated 1. 2040 ez form Enter the total amount of your insurance coverage from your employer(s) 1. 2040 ez form 80,000 2. 2040 ez form Limit on exclusion for employer-provided group-term life insurance coverage 2. 2040 ez form 50,000 3. 2040 ez form Subtract line 2 from line 1 3. 2040 ez form 30,000 4. 2040 ez form Divide line 3 by $1,000. 2040 ez form Figure to the nearest tenth 4. 2040 ez form 30. 2040 ez form 0 5. 2040 ez form Go to Table 5-1. 2040 ez form Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. 2040 ez form . 2040 ez form 23 6. 2040 ez form Multiply line 4 by line 5 6. 2040 ez form 6. 2040 ez form 90 7. 2040 ez form Enter the number of full months of coverage at this cost. 2040 ez form 7. 2040 ez form 12 8. 2040 ez form Multiply line 6 by line 7 8. 2040 ez form 82. 2040 ez form 80 9. 2040 ez form Enter the premiums you paid per month 9. 2040 ez form 4. 2040 ez form 15     10. 2040 ez form Enter the number of months you paid the premiums 10. 2040 ez form 12     11. 2040 ez form Multiply line 9 by line 10. 2040 ez form 11. 2040 ez form 49. 2040 ez form 80 12. 2040 ez form Subtract line 11 from line 8. 2040 ez form Include this amount in your income as wages 12. 2040 ez form 33. 2040 ez form 00 Entire cost excluded. 2040 ez form   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. 2040 ez form You are permanently and totally disabled and have ended your employment. 2040 ez form Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. 2040 ez form A charitable organization (defined in chapter 24) to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. 2040 ez form (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. 2040 ez form ) The plan existed on January 1, 1984, and You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. 2040 ez form Entire cost taxed. 2040 ez form   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply: The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. 2040 ez form You are a key employee and your employer's plan discriminates in favor of key employees. 2040 ez form Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. 2040 ez form Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. 2040 ez form You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. 2040 ez form Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. 2040 ez form A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. 2040 ez form Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. 2040 ez form However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. 2040 ez form Exclusion limit. 2040 ez form   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. 2040 ez form   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. 2040 ez form   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. 2040 ez form   If the benefits have a value that is more than these limits, the excess must be included in your income. 2040 ez form You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. 2040 ez form Commuter highway vehicle. 2040 ez form   This is a highway vehicle that seats at least six adults (not including the driver). 2040 ez form At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). 2040 ez form Transit pass. 2040 ez form   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. 2040 ez form Qualified parking. 2040 ez form   This is parking provided to an employee at or near the employer's place of business. 2040 ez form It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. 2040 ez form It does not include parking at or near the employee's home. 2040 ez form Qualified bicycle commuting. 2040 ez form   This is reimbursement based on the number of qualified bicycle commuting months for the year. 2040 ez form A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. 2040 ez form The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. 2040 ez form Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. 2040 ez form (Your employer can tell you whether your retirement plan is qualified. 2040 ez form ) However, the cost of life insurance coverage included in the plan may have to be included. 2040 ez form See Group-Term Life Insurance , earlier, under Fringe Benefits. 2040 ez form If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. 2040 ez form However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. 2040 ez form For information on distributions from retirement plans, see Publication 575, Pension and Annuity Income (or Publication 721, Tax Guide to U. 2040 ez form S. 2040 ez form Civil Service Retirement Benefits, if you are a federal employee or retiree). 2040 ez form Elective deferrals. 2040 ez form   If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. 2040 ez form The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. 2040 ez form An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. 2040 ez form However, it is included in wages subject to social security and Medicare taxes. 2040 ez form   Elective deferrals include elective contributions to the following retirement plans. 2040 ez form Cash or deferred arrangements (section 401(k) plans). 2040 ez form The Thrift Savings Plan for federal employees. 2040 ez form Salary reduction simplified employee pension plans (SARSEP). 2040 ez form Savings incentive match plans for employees (SIMPLE plans). 2040 ez form Tax-sheltered annuity plans (403(b) plans). 2040 ez form Section 501(c)(18)(D) plans. 2040 ez form Section 457 plans. 2040 ez form Qualified automatic contribution arrangements. 2040 ez form   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. 2040 ez form You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. 2040 ez form The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. 2040 ez form   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. 2040 ez form Overall limit on deferrals. 2040 ez form   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3) and (5) above. 2040 ez form The limit for SIMPLE plans is $12,000. 2040 ez form The limit for section 501(c)(18)(D) plans is the lesser of $7,000 or 25% of your compensation. 2040 ez form The limit for section 457 plans is the lesser of your includible compensation or $17,500. 2040 ez form Amounts deferred under specific plan limits are part of the overall limit on deferrals. 2040 ez form Designated Roth contributions. 2040 ez form   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. 2040 ez form Designated Roth contributions are treated as elective deferrals, except that they are included in income. 2040 ez form Excess deferrals. 2040 ez form   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. 2040 ez form However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. 2040 ez form   If you set aside more than the limit, the excess generally must be included in your income for that year, unless you have an excess deferral of a designated Roth contribution. 2040 ez form See Publication 525 for a discussion of the tax treatment of excess deferrals. 2040 ez form Catch-up contributions. 2040 ez form   You may be allowed catch-up contributions (additional elective deferral) if you are age 50 or older by the end of your tax year. 2040 ez form Stock Options If you receive a nonstatutory option to buy or sell stock or other property as payment for your services, you usually will have income when you receive the option, when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option. 2040 ez form However, if your option is a statutory stock option, you will not have any income until you sell or exchange your stock. 2040 ez form Your employer can tell you which kind of option you hold. 2040 ez form For more information, see Publication 525. 2040 ez form Restricted Property In most cases, if you receive property for your services, you must include its fair market value in your income in the year you receive the property. 2040 ez form However, if you receive stock or other property that has certain restrictions that affect its value, you do not include the value of the property in your income until it has substantially vested. 2040 ez form (You can choose to include the value of the property in your income in the year it is transferred to you. 2040 ez form ) For more information, see Restricted Property in Publication 525. 2040 ez form Dividends received on restricted stock. 2040 ez form   Dividends you receive on restricted stock are treated as compensation and not as dividend income. 2040 ez form Your employer should include these payments on your Form W-2. 2040 ez form Stock you chose to include in income. 2040 ez form   Dividends you receive on restricted stock you chose to include in your income in the year transferred are treated the same as any other dividends. 2040 ez form Report them on your return as dividends. 2040 ez form For a discussion of dividends, see chapter 8. 2040 ez form    For information on how to treat dividends reported on both your Form W-2 and Form 1099-DIV, see Dividends received on restricted stock in Publication 525. 2040 ez form Special Rules for Certain Employees This section deals with special rules for people in certain types of employment: members of the clergy, members of religious orders, people working for foreign employers, military personnel, and volunteers. 2040 ez form Clergy Generally, if you are a member of the clergy, you must include in your income offerings and fees you receive for marriages, baptisms, funerals, masses, etc. 2040 ez form , in addition to your salary. 2040 ez form If the offering is made to the religious institution, it is not taxable to you. 2040 ez form If you are a member of a religious organization and you give your outside earnings to the religious organization, you still must include the earnings in your income. 2040 ez form However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. 2040 ez form See chapter 24. 2040 ez form Pension. 2040 ez form    A pension or retirement pay for a member of the clergy usually is treated as any other pension or annuity. 2040 ez form It must be reported on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. 2040 ez form Housing. 2040 ez form    Special rules for housing apply to members of the clergy. 2040 ez form Under these rules, you do not include in your income the rental value of a home (including utilities) or a designated housing allowance provided to you as part of your pay. 2040 ez form However, the exclusion cannot be more than the reasonable pay for your service. 2040 ez form If you pay for the utilities, you can exclude any allowance designated for utility cost, up to your actual cost. 2040 ez form The home or allowance must be provided as compensation for your services as an ordained, licensed, or commissioned minister. 2040 ez form However, you must include the rental value of the home or the housing allowance as earnings from self-employment on Schedule SE (Form 1040) if you are subject to the self-employment tax. 2040 ez form For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. 2040 ez form Members of Religious Orders If you are a member of a religious order who has taken a vow of poverty, how you treat earnings that you renounce and turn over to the order depends on whether your services are performed for the order. 2040 ez form Services performed for the order. 2040 ez form   If you are performing the services as an agent of the order in the exercise of duties required by the order, do not include in your income the amounts turned over to the order. 2040 ez form   If your order directs you to perform services for another agency of the supervising church or an associated institution, you are considered to be performing the services as an agent of the order. 2040 ez form Any wages you earn as an agent of an order that you turn over to the order are not included in your income. 2040 ez form Example. 2040 ez form You are a member of a church order and have taken a vow of poverty. 2040 ez form You renounce any claims to your earnings and turn over to the order any salaries or wages you earn. 2040 ez form You are a registered nurse, so your order assigns you to work in a hospital that is an associated institution of the church. 2040 ez form However, you remain under the general direction and control of the order. 2040 ez form You are considered to be an agent of the order and any wages you earn at the hospital that you turn over to your order are not included in your income. 2040 ez form Services performed outside the order. 2040 ez form   If you are directed to work outside the order, your services are not an exercise of duties required by the order unless they meet both of the following requirements: They are the kind of services that are ordinarily the duties of members of the order. 2040 ez form They are part of the duties that you must exercise for, or on behalf of, the religious order as its agent. 2040 ez form If you are an employee of a third party, the services you perform for the third party will not be considered directed or required of you by the order. 2040 ez form Amounts you receive for these services are included in your income, even if you have taken a vow of poverty. 2040 ez form Example. 2040 ez form Mark Brown is a member of a religious order and has taken a vow of poverty. 2040 ez form He renounces all claims to his earnings and turns over his earnings to the order. 2040 ez form Mark is a schoolteacher. 2040 ez form He was instructed by the superiors of the order to get a job with a private tax-exempt school. 2040 ez form Mark became an employee of the school, and, at his request, the school made the salary payments directly to the order. 2040 ez form Because Mark is an employee of the school, he is performing services for the school rather than as an agent of the order. 2040 ez form The wages Mark earns working for the school are included in his income. 2040 ez form Foreign Employer Special rules apply if you work for a foreign employer. 2040 ez form U. 2040 ez form S. 2040 ez form citizen. 2040 ez form   If you are a U. 2040 ez form S. 2040 ez form citizen who works in the United States for a foreign government, an international organization, a foreign embassy, or any foreign employer, you must include your salary in your income. 2040 ez form Social security and Medicare taxes. 2040 ez form   You are exempt from social security and Medicare employee taxes if you are employed in the United States by an international organization or a foreign government. 2040 ez form However, you must pay self-employment tax on your earnings from services performed in the United States, even though you are not self-employed. 2040 ez form This rule also applies if you are an employee of a qualifying wholly owned instrumentality of a foreign government. 2040 ez form Employees of international organizations or foreign governments. 2040 ez form   Your compensation for official services to an international organization is exempt from federal income tax if you are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). 2040 ez form   Your compensation for official services to a foreign government is exempt from federal income tax if all of the following are true. 2040 ez form You are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). 2040 ez form Your work is like the work done by employees of the United States in foreign countries. 2040 ez form The foreign government gives an equal exemption to employees of the United States in its country. 2040 ez form Waiver of alien status. 2040 ez form   If you are an alien who works for a foreign government or international organization and you file a waiver under section 247(b) of the Immigration and Nationality Act to keep your immigrant status, different rules may apply. 2040 ez form See Foreign Employer in Publication 525. 2040 ez form Employment abroad. 2040 ez form   For information on the tax treatment of income earned abroad, see Publication 54. 2040 ez form Military Payments you receive as a member of a military service generally are taxed as wages except for retirement pay, which is taxed as a pension. 2040 ez form Allowances generally are not taxed. 2040 ez form For more information on the tax treatment of military allowances and benefits, see Publication 3, Armed Forces' Tax Guide. 2040 ez form Differential wage payments. 2040 ez form   Any payments made to you by an employer during the time you are performing service in the uniformed services are treated as compensation. 2040 ez form These wages are subject to income tax withholding and are reported on a Form W-2. 2040 ez form See the discussion under Miscellaneous Compensation , earlier. 2040 ez form Military retirement pay. 2040 ez form   If your retirement pay is based on age or length of service, it is taxable and must be included in your income as a pension on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. 2040 ez form Do not include in your income the amount of any reduction in retirement or retainer pay to provide a survivor annuity for your spouse or children under the Retired Serviceman's Family Protection Plan or the Survivor Benefit Plan. 2040 ez form   For more detailed discussion of survivor annuities, see chapter 10. 2040 ez form Disability. 2040 ez form   If you are retired on disability, see Military and Government Disability Pensions under Sickness and Injury Benefits, later. 2040 ez form Veterans' benefits. 2040 ez form   Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA). 2040 ez form The following amounts paid to veterans or their families are not taxable. 2040 ez form Education, training, and subsistence allowances. 2040 ez form Disability compensation and pension payments for disabilities paid either to veterans or their families. 2040 ez form Grants for homes designed for wheelchair living. 2040 ez form Grants for motor vehicles for veterans who lost their sight or the use of their limbs. 2040 ez form Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death. 2040 ez form Interest on insurance dividends you leave on deposit with the VA. 2040 ez form Benefits under a dependent-care assistance program. 2040 ez form The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001. 2040 ez form Payments made under the compensated work therapy program. 2040 ez form Any bonus payment by a state or political subdivision because of service in a combat zone. 2040 ez form Volunteers The tax treatment of amounts you receive as a volunteer worker for the Peace Corps or similar agency is covered in the following discussions. 2040 ez form Peace Corps. 2040 ez form   Living allowances you receive as a Peace Corps volunteer or volunteer leader for housing, utilities, household supplies, food, and clothing are exempt from tax. 2040 ez form Taxable allowances. 2040 ez form   The following allowances must be included in your income and reported as wages: Allowances paid to your spouse and minor children while you are a volunteer leader training in the United States. 2040 ez form Living allowances designated by the Director of the Peace Corps as basic compensation. 2040 ez form These are allowances for personal items such as domestic help, laundry and clothing maintenance, entertainment and recreation, transportation, and other miscellaneous expenses. 2040 ez form Leave allowances. 2040 ez form Readjustment allowances or termination payments. 2040 ez form These are considered received by you when credited to your account. 2040 ez form Example. 2040 ez form Gary Carpenter, a Peace Corps volunteer, gets $175 a month as a readjustment allowance during his period of service, to be paid to him in a lump sum at the end of his tour of duty. 2040 ez form Although the allowance is not available to him until the end of his service, Gary must include it in his income on a monthly basis as it is credited to his account. 2040 ez form Volunteers in Service to America (VISTA). 2040 ez form   If you are a VISTA volunteer, you must include meal and lodging allowances paid to you in your income as wages. 2040 ez form National Senior Services Corps programs. 2040 ez form   Do not include in your income amounts you receive for supportive services or reimbursements for out-of-pocket expenses from the following programs. 2040 ez form Retired Senior Volunteer Program (RSVP). 2040 ez form Foster Grandparent Program. 2040 ez form Senior Companion Program. 2040 ez form Service Corps of Retired Executives (SCORE). 2040 ez form   If you receive amounts for supportive services or reimbursements for out-of-pocket expenses from SCORE, do not include these amounts in income. 2040 ez form Volunteer tax counseling. 2040 ez form   Do not include in your income any reimbursements you receive for transportation, meals, and other expenses you have in training for, or actually providing, volunteer federal income tax counseling for the elderly (TCE). 2040 ez form   You can deduct as a charitable contribution your unreimbursed out-of-pocket expenses in taking part in the volunteer income tax assistance (VITA) program. 2040 ez form See chapter 24. 2040 ez form Sickness and Injury Benefits This section discusses sickness and injury benefits including disability pensions, long-term care insurance contracts, workers' compensation, and other benefits. 2040 ez form In most cases, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. 2040 ez form If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. 2040 ez form However, certain payments may not be taxable to you. 2040 ez form Your employer should be able to give you specific details about your pension plan and tell you the amount you paid for your disability pension. 2040 ez form In addition to disability pensions and annuities, you may be receiving other payments for sickness and injury. 2040 ez form Do not report as income any amounts paid to reimburse you for medical expenses you incurred after the plan was established. 2040 ez form Cost paid by you. 2040 ez form   If you pay the entire cost of a health or accident insurance plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. 2040 ez form If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. 2040 ez form See Reimbursement in a later year in chapter 21. 2040 ez form Cafeteria plans. 2040 ez form   In most cases, if you are covered by an accident or health insurance plan through a cafeteria plan, and the amount of the insurance premiums was not included in your income, you are not considered to have paid the premiums and you must include any benefits you receive in your income. 2040 ez form If the amount of the premiums was included in your income, you are considered to have paid the premiums, and any benefits you receive are not taxable. 2040 ez form Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. 2040 ez form You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A, until you reach minimum retirement age. 2040 ez form Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. 2040 ez form You may be entitled to a tax credit if you were permanently and totally disabled when you retired. 2040 ez form For information on this credit and the definition of permanent and total disability, see chapter 33. 2040 ez form Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. 2040 ez form Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. 2040 ez form The rules for reporting pensions are explained in How To Report in chapter 10. 2040 ez form For information on disability payments from a governmental program provided as a substitute for unemployment compensation, see chapter 12. 2040 ez form Retirement and profit-sharing plans. 2040 ez form   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. 2040 ez form The payments must be reported as a pension or annuity. 2040 ez form For more information on pensions, see chapter 10. 2040 ez form Accrued leave payment. 2040 ez form   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. 2040 ez form The payment is not a disability payment. 2040 ez form Include it in your income in the tax year you receive it. 2040 ez form Military and Government Disability Pensions Certain military and government disability pensions are not taxable. 2040 ez form Service-connected disability. 2040 ez form   You may be able to exclude from income amounts you receive as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in one of the following government services. 2040 ez form The armed forces of any country. 2040 ez form The National Oceanic and Atmospheric Administration. 2040 ez form The Public Health Service. 2040 ez form The Foreign Service. 2040 ez form Conditions for exclusion. 2040 ez form   Do not include the disability payments in your income if any of the following conditions apply. 2040 ez form You were entitled to receive a disability payment before September 25, 1975. 2040 ez form You were a member of a listed government service or its reserve component, or were under a binding written commitment to become a member, on September 24, 1975. 2040 ez form You receive the disability payments for a combat-related injury. 2040 ez form This is a personal injury or sickness that Results directly from armed conflict, Takes place while you are engaged in extra-hazardous service, Takes place under conditions simulating war, including training exercises such as maneuvers, or Is caused by an instrumentality of war. 2040 ez form You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it. 2040 ez form Your exclusion under this condition is equal to the amount you would be entitled to receive from the VA. 2040 ez form Pension based on years of service. 2040 ez form   If you receive a disability pension based on years of service, in most cases you must include it in your income. 2040 ez form However, if the pension qualifies for the exclusion for a service-connected disability (discussed earlier), do not include in income the part of your pension that you would have received if the pension had been based on a percentage of disability. 2040 ez form You must include the rest of your pension in your income. 2040 ez form Retroactive VA determination. 2040 ez form   If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive. 2040 ez form You can claim a refund of any tax paid on the excludable amount (subject to the statute of limitations) by filing an amended return on Form 1040X for each previous year during the retroactive period. 2040 ez form You must include with each Form 1040X a copy of the official VA Determination letter granting the retroactive benefit. 2040 ez form The letter must show the amount withheld and the effective date of the benefit. 2040 ez form   If you receive a lump-sum disability severance payment and are later awarded VA disability benefits, exclude 100% of the severance benefit from your income. 2040 ez form However, you must include in your income any lump-sum readjustment or other nondisability severance payment you received on release from active duty, even if you are later given a retroactive disability rating by the VA. 2040 ez form Special statute of limitations. 2040 ez form   In most cases, under the statute of limitations a claim for credit or refund must be filed within 3 years from the time a return was filed. 2040 ez form However, if you receive a retroactive service-connected disability rating determination, the statute of limitations is extended by a 1-year period beginning on the date of the determination. 2040 ez form This 1-year extended period applies to claims for credit or refund filed after June 17, 2008, and does not apply to any tax year that began more than 5 years before the date of the determination. 2040 ez form Example. 2040 ez form You retired in 2007 and receive a pension based on your years of service. 2040 ez form On August 1, 2013, you receive a determination of service-connected disability retroactive to 2007. 2040 ez form Generally, you could claim a refund for the taxes paid on your pension for 2010, 2011, and 2012. 2040 ez form However, under the special limitation period, you can also file a claim for 2009 as long as you file the claim by August 1, 2014. 2040 ez form You cannot file a claim for 2007 and 2008 because those tax years began more than 5 years before the determination. 2040 ez form Terrorist attack or military action. 2040 ez form   Do not include in your income disability payments you receive for injuries resulting directly from a terrorist or military action. 2040 ez form Long-Term Care Insurance Contracts Long-term care insurance contracts in most cases are treated as accident and health insurance contracts. 2040 ez form Amounts you receive from them (other than policyholder dividends or premium refunds) in most cases are excludable from income as amounts received for personal injury or sickness. 2040 ez form To claim an exclusion for payments made on a per diem or other periodic basis under a long-term care insurance contract, you must file Form 8853 with your return. 2040 ez form A long-term care insurance contract is an insurance contract that only provides coverage for qualified long-term care services. 2040 ez form The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract may be used only to reduce future premiums or increase future benefits, and In most cases, not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer or the contract makes per diem or other periodic payments without regard to expenses. 2040 ez form Qualified long-term care services. 2040 ez form   Qualified long-term care services are: Necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance and personal care services, and Required by a chronically ill individual and provided pursuant to a plan of care as prescribed by a licensed health care practitioner. 2040 ez form Chronically ill individual. 2040 ez form   A chronically ill individual is one who has been certified by a licensed health care practitioner within the previous 12 months as one of the following: An individual who, for at least 90 days, is unable to perform at least two activities of daily living without substantial assistance due to loss of functional capacity. 2040 ez form Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. 2040 ez form An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. 2040 ez form Limit on exclusion. 2040 ez form   You generally can exclude from gross income up to $320 a day for 2013. 2040 ez form See Limit on exclusion, under Long-Term Care Insurance Contracts, under Sickness and Injury Benefits in Publication 525 for more information. 2040 ez form Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. 2040 ez form The exemption also applies to your survivors. 2040 ez form The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. 2040 ez form If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. 2040 ez form For more information, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. 2040 ez form Return to work. 2040 ez form    If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. 2040 ez form Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. 2040 ez form Railroad sick pay. 2040 ez form    Payments you receive as sick pay under the Railroad Unemployment Insurance Act are taxable and you must include them in your income. 2040 ez form However, do not include them in your income if they are for an on-the-job injury. 2040 ez form   If you received income because of a disability, see Disability Pensions , earlier. 2040 ez form Federal Employees' Compensation Act (FECA). 2040 ez form   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. 2040 ez form However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. 2040 ez form Report this income on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040-EZ. 2040 ez form Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. 2040 ez form    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. 2040 ez form For a discussion of the taxability of these benefits, see Social security and equivalent railroad retirement benefits under Other Income, in Publication 525. 2040 ez form    You can deduct the amount you spend to buy back sick leave for an earlier year to be eligible for nontaxable FECA benefits for that period. 2040 ez form It is a miscellaneous deduction subject to the 2%-of-AGI limit on Schedule A (Form 1040). 2040 ez form If you buy back sick leave in the same year you used it, the amount reduces your taxable sick leave pay. 2040 ez form Do not deduct it separately. 2040 ez form Other compensation. 2040 ez form   Many other amounts you receive as compensation for sickness or injury are not taxable. 2040 ez form These include the following amounts. 2040 ez form Compensatory damages you receive for physical injury or physical sickness, whether paid in a lump sum or in periodic payments. 2040 ez form Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. 2040 ez form Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. 2040 ez form Compensation you receive for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement. 2040 ez form This compensation must be based only on the injury and not on the period of your absence from work. 2040 ez form These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. 2040 ez form Reimbursement for medical care. 2040 ez form    A reimbursement for medical care is generally not taxable. 2040 ez form However, it may reduce your medical expense deduction. 2040 ez form For more information, see chapter 21. 2040 ez form Prev  Up  Next   Home   More Online Publications