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Aarp Org Taxaide

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Aarp Org Taxaide

Aarp org taxaide 5. Aarp org taxaide   Wages, Salaries, and Other Earnings Table of Contents Reminder Introduction Useful Items - You may want to see: Employee CompensationBabysitting. Aarp org taxaide 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. Aarp org taxaide   If you are a U. Aarp org taxaide S. Aarp org taxaide 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. Aarp org taxaide S. Aarp org taxaide law. Aarp org taxaide 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. Aarp org taxaide 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). Aarp org taxaide If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. Aarp org taxaide For details, see Publication 54, Tax Guide for U. Aarp org taxaide S. Aarp org taxaide Citizens and Resident Aliens Abroad. Aarp org taxaide Introduction This chapter discusses compensation received for services as an employee, such as wages, salaries, and fringe benefits. Aarp org taxaide The following topics are included. Aarp org taxaide Bonuses and awards. Aarp org taxaide Special rules for certain employees. Aarp org taxaide Sickness and injury benefits. Aarp org taxaide The chapter explains what income is included in the employee's gross income and what is not included. Aarp org taxaide 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. Aarp org taxaide Form W-2. Aarp org taxaide    If you are an employee, you should receive Form W-2 from your employer showing the pay you received for your services. Aarp org taxaide 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. Aarp org taxaide   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. Aarp org taxaide These wages must be included on line 7 of Form 1040. Aarp org taxaide See Form 8919 for more information. Aarp org taxaide Childcare providers. Aarp org taxaide    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. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide Babysitting. Aarp org taxaide   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. Aarp org taxaide Miscellaneous Compensation This section discusses different types of employee compensation. Aarp org taxaide Advance commissions and other earnings. Aarp org taxaide   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. Aarp org taxaide    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. Aarp org taxaide 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. Aarp org taxaide See Repayments in chapter 12. Aarp org taxaide Allowances and reimbursements. Aarp org taxaide    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463. Aarp org taxaide If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. Aarp org taxaide Back pay awards. Aarp org taxaide    Include in income amounts you are awarded in a settlement or judgment for back pay. Aarp org taxaide These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. Aarp org taxaide They should be reported to you by your employer on Form W-2. Aarp org taxaide Bonuses and awards. Aarp org taxaide   Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. Aarp org taxaide These include prizes such as vacation trips for meeting sales goals. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide Employee achievement award. Aarp org taxaide   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. Aarp org taxaide 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. Aarp org taxaide Your employer can tell you whether your award is a qualified plan award. Aarp org taxaide 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. Aarp org taxaide   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. Aarp org taxaide 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. Aarp org taxaide Example. Aarp org taxaide 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. Aarp org taxaide Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. Aarp org taxaide 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. Aarp org taxaide Differential wage payments. Aarp org taxaide   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. Aarp org taxaide These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. Aarp org taxaide The payments are reported as wages on Form W-2. Aarp org taxaide Government cost-of-living allowances. Aarp org taxaide   Most payments received by U. Aarp org taxaide S. Aarp org taxaide Government civilian employees for working abroad are taxable. Aarp org taxaide However, certain cost-of-living allowances are tax free. Aarp org taxaide Publication 516, U. Aarp org taxaide S. Aarp org taxaide Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. Aarp org taxaide Nonqualified deferred compensation plans. Aarp org taxaide   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. Aarp org taxaide This amount is shown on Form W-2, box 12, using code Y. Aarp org taxaide This amount is not included in your income. Aarp org taxaide   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. Aarp org taxaide This amount is included in your wages shown on Form W-2, box 1. Aarp org taxaide It is also shown on Form W-2, box 12, using code Z. Aarp org taxaide Note received for services. Aarp org taxaide    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. Aarp org taxaide 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. Aarp org taxaide Do not include that part again in your income. Aarp org taxaide Include the rest of the payment in your income in the year of payment. Aarp org taxaide   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. Aarp org taxaide Severance pay. Aarp org taxaide   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. Aarp org taxaide Accrued leave payment. Aarp org taxaide    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. Aarp org taxaide   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. Aarp org taxaide You can reduce gross wages by the amount you repaid in the same tax year in which you received it. Aarp org taxaide 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. Aarp org taxaide Outplacement services. Aarp org taxaide   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. Aarp org taxaide    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). Aarp org taxaide Sick pay. Aarp org taxaide   Pay you receive from your employer while you are sick or injured is part of your salary or wages. Aarp org taxaide In addition, you must include in your income sick pay benefits received from any of the following payers: A welfare fund. Aarp org taxaide A state sickness or disability fund. Aarp org taxaide An association of employers or employees. Aarp org taxaide An insurance company, if your employer paid for the plan. Aarp org taxaide However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. Aarp org taxaide For more information, see Publication 525. Aarp org taxaide Social security and Medicare taxes paid by employer. Aarp org taxaide   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. Aarp org taxaide The payment also is treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. Aarp org taxaide However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. Aarp org taxaide Stock appreciation rights. Aarp org taxaide   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. Aarp org taxaide 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. Aarp org taxaide You include the cash payment in your income in the year you use the right. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide Accounting period. Aarp org taxaide   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. Aarp org taxaide Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. Aarp org taxaide The general rule: benefits are reported for a full calendar year (January 1–December 31). Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide  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. Aarp org taxaide   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). Aarp org taxaide Form W-2. Aarp org taxaide   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. Aarp org taxaide Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). Aarp org taxaide 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). Aarp org taxaide 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. Aarp org taxaide Benefits you receive from the plan may be taxable, as explained later under Sickness and Injury Benefits . Aarp org taxaide 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. Aarp org taxaide Long-term care coverage. Aarp org taxaide    Contributions by your employer to provide coverage for long-term care services generally are not included in your income. Aarp org taxaide However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. Aarp org taxaide This amount will be reported as wages in box 1 of your Form W-2. Aarp org taxaide   Contributions you make to the plan are discussed in Publication 502, Medical and Dental Expenses. Aarp org taxaide Archer MSA contributions. Aarp org taxaide    Contributions by your employer to your Archer MSA generally are not included in your income. Aarp org taxaide Their total will be reported in box 12 of Form W-2 with code R. Aarp org taxaide You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. Aarp org taxaide File the form with your return. Aarp org taxaide Health flexible spending arrangement (health FSA). Aarp org taxaide   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. Aarp org taxaide Note. Aarp org taxaide Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. Aarp org taxaide The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. Aarp org taxaide For more information, see Notice 2012-40, 2012-26 I. Aarp org taxaide R. Aarp org taxaide B. Aarp org taxaide 1046, available at www. Aarp org taxaide irs. Aarp org taxaide gov/irb/2012-26 IRB/ar09. Aarp org taxaide html. Aarp org taxaide Health reimbursement arrangement (HRA). Aarp org taxaide   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. Aarp org taxaide Health savings accounts (HSA). Aarp org taxaide   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. Aarp org taxaide Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. Aarp org taxaide Contributions made by your employer are not included in your income. Aarp org taxaide Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. Aarp org taxaide Distributions not used for qualified medical expenses are included in your income. Aarp org taxaide See Publication 969 for the requirements of an HSA. Aarp org taxaide   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. Aarp org taxaide The contributions are treated as a distribution of money and are not included in the partner's gross income. Aarp org taxaide 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. Aarp org taxaide In both situations, the partner can deduct the contribution made to the partner's HSA. Aarp org taxaide   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. Aarp org taxaide The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. Aarp org taxaide Qualified HSA funding distribution. Aarp org taxaide   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. Aarp org taxaide See Publication 590 for the requirements for these qualified HSA funding distributions. Aarp org taxaide Failure to maintain eligibility. Aarp org taxaide   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. Aarp org taxaide 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. Aarp org taxaide This income is also subject to an additional 10% tax. Aarp org taxaide 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. Aarp org taxaide See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. Aarp org taxaide Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. Aarp org taxaide They also are included as social security and Medicare wages in boxes 3 and 5. Aarp org taxaide However, they are not included as wages in box 1. Aarp org taxaide To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. Aarp org taxaide File the form with your return. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide Holiday gifts. Aarp org taxaide   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. Aarp org taxaide 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. Aarp org taxaide Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. Aarp org taxaide For more information, see Publication 970, Tax Benefits for Education. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide For exceptions, see Entire cost excluded , and Entire cost taxed , later. Aarp org taxaide 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. Aarp org taxaide Also, it is shown separately in box 12 with code C. Aarp org taxaide Group-term life insurance. Aarp org taxaide   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. Aarp org taxaide Permanent benefits. Aarp org taxaide   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. Aarp org taxaide Your employer should be able to tell you the amount to include in your income. Aarp org taxaide Accidental death benefits. Aarp org taxaide   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. Aarp org taxaide Former employer. Aarp org taxaide   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. Aarp org taxaide Also, it is shown separately in box 12 with code C. Aarp org taxaide Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. Aarp org taxaide You must pay these taxes with your income tax return. Aarp org taxaide Include them on line 60, Form 1040, and follow the instructions for line 60. Aarp org taxaide For more information, see the Instructions for Form 1040. Aarp org taxaide Two or more employers. Aarp org taxaide   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. Aarp org taxaide 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. Aarp org taxaide You must figure how much to include in your income. Aarp org taxaide 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. Aarp org taxaide Figuring the taxable cost. Aarp org taxaide   Use the following worksheet to figure the amount to include in your income. Aarp org taxaide     Worksheet 5-1. Aarp org taxaide Figuring the Cost of Group-Term Life Insurance To Include in Income 1. Aarp org taxaide Enter the total amount of your insurance coverage from your employer(s) 1. Aarp org taxaide   2. Aarp org taxaide Limit on exclusion for employer-provided group-term life insurance coverage 2. Aarp org taxaide 50,000 3. Aarp org taxaide Subtract line 2 from line 1 3. Aarp org taxaide   4. Aarp org taxaide Divide line 3 by $1,000. Aarp org taxaide Figure to the nearest tenth 4. Aarp org taxaide   5. Aarp org taxaide Go to Table 5-1. Aarp org taxaide 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. Aarp org taxaide   6. Aarp org taxaide Multiply line 4 by line 5 6. Aarp org taxaide   7. Aarp org taxaide Enter the number of full months of coverage at this cost. Aarp org taxaide 7. Aarp org taxaide   8. Aarp org taxaide Multiply line 6 by line 7 8. Aarp org taxaide   9. Aarp org taxaide Enter the premiums you paid per month 9. Aarp org taxaide       10. Aarp org taxaide Enter the number of months you paid the premiums 10. Aarp org taxaide       11. Aarp org taxaide Multiply line 9 by line 10. Aarp org taxaide 11. Aarp org taxaide   12. Aarp org taxaide Subtract line 11 from line 8. Aarp org taxaide Include this amount in your income as wages 12. Aarp org taxaide      Table 5-1. Aarp org taxaide Cost of $1,000 of Group-Term Life Insurance for One Month Age Cost Under 25 $. Aarp org taxaide 05 25 through 29 . Aarp org taxaide 06 30 through 34 . Aarp org taxaide 08 35 through 39 . Aarp org taxaide 09 40 through 44 . Aarp org taxaide 10 45 through 49 . Aarp org taxaide 15 50 through 54 . Aarp org taxaide 23 55 through 59 . Aarp org taxaide 43 60 through 64 . Aarp org taxaide 66 65 through 69 1. Aarp org taxaide 27 70 and older 2. Aarp org taxaide 06 Example. Aarp org taxaide You are 51 years old and work for employers A and B. Aarp org taxaide Both employers provide group-term life insurance coverage for you for the entire year. Aarp org taxaide Your coverage is $35,000 with employer A and $45,000 with employer B. Aarp org taxaide You pay premiums of $4. Aarp org taxaide 15 a month under the employer B group plan. Aarp org taxaide You figure the amount to include in your income as shown in Worksheet 5-1. Aarp org taxaide Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated, later. Aarp org taxaide Worksheet 5-1. Aarp org taxaide Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated 1. Aarp org taxaide Enter the total amount of your insurance coverage from your employer(s) 1. Aarp org taxaide 80,000 2. Aarp org taxaide Limit on exclusion for employer-provided group-term life insurance coverage 2. Aarp org taxaide 50,000 3. Aarp org taxaide Subtract line 2 from line 1 3. Aarp org taxaide 30,000 4. Aarp org taxaide Divide line 3 by $1,000. Aarp org taxaide Figure to the nearest tenth 4. Aarp org taxaide 30. Aarp org taxaide 0 5. Aarp org taxaide Go to Table 5-1. Aarp org taxaide 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. Aarp org taxaide . Aarp org taxaide 23 6. Aarp org taxaide Multiply line 4 by line 5 6. Aarp org taxaide 6. Aarp org taxaide 90 7. Aarp org taxaide Enter the number of full months of coverage at this cost. Aarp org taxaide 7. Aarp org taxaide 12 8. Aarp org taxaide Multiply line 6 by line 7 8. Aarp org taxaide 82. Aarp org taxaide 80 9. Aarp org taxaide Enter the premiums you paid per month 9. Aarp org taxaide 4. Aarp org taxaide 15     10. Aarp org taxaide Enter the number of months you paid the premiums 10. Aarp org taxaide 12     11. Aarp org taxaide Multiply line 9 by line 10. Aarp org taxaide 11. Aarp org taxaide 49. Aarp org taxaide 80 12. Aarp org taxaide Subtract line 11 from line 8. Aarp org taxaide Include this amount in your income as wages 12. Aarp org taxaide 33. Aarp org taxaide 00 Entire cost excluded. Aarp org taxaide   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. Aarp org taxaide You are permanently and totally disabled and have ended your employment. Aarp org taxaide Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. Aarp org taxaide 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. Aarp org taxaide (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. Aarp org taxaide ) 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. Aarp org taxaide Entire cost taxed. Aarp org taxaide   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. Aarp org taxaide You are a key employee and your employer's plan discriminates in favor of key employees. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. Aarp org taxaide Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. Aarp org taxaide 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. Aarp org taxaide Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. Aarp org taxaide 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. Aarp org taxaide Exclusion limit. Aarp org taxaide   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. Aarp org taxaide   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. Aarp org taxaide   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. Aarp org taxaide   If the benefits have a value that is more than these limits, the excess must be included in your income. Aarp org taxaide You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. Aarp org taxaide Commuter highway vehicle. Aarp org taxaide   This is a highway vehicle that seats at least six adults (not including the driver). Aarp org taxaide 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). Aarp org taxaide Transit pass. Aarp org taxaide   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. Aarp org taxaide Qualified parking. Aarp org taxaide   This is parking provided to an employee at or near the employer's place of business. Aarp org taxaide 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. Aarp org taxaide It does not include parking at or near the employee's home. Aarp org taxaide Qualified bicycle commuting. Aarp org taxaide   This is reimbursement based on the number of qualified bicycle commuting months for the year. Aarp org taxaide 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. Aarp org taxaide The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. Aarp org taxaide Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. Aarp org taxaide (Your employer can tell you whether your retirement plan is qualified. Aarp org taxaide ) However, the cost of life insurance coverage included in the plan may have to be included. Aarp org taxaide See Group-Term Life Insurance , earlier, under Fringe Benefits. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide For information on distributions from retirement plans, see Publication 575, Pension and Annuity Income (or Publication 721, Tax Guide to U. Aarp org taxaide S. Aarp org taxaide Civil Service Retirement Benefits, if you are a federal employee or retiree). Aarp org taxaide Elective deferrals. Aarp org taxaide   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. Aarp org taxaide The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. Aarp org taxaide An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. Aarp org taxaide However, it is included in wages subject to social security and Medicare taxes. Aarp org taxaide   Elective deferrals include elective contributions to the following retirement plans. Aarp org taxaide Cash or deferred arrangements (section 401(k) plans). Aarp org taxaide The Thrift Savings Plan for federal employees. Aarp org taxaide Salary reduction simplified employee pension plans (SARSEP). Aarp org taxaide Savings incentive match plans for employees (SIMPLE plans). Aarp org taxaide Tax-sheltered annuity plans (403(b) plans). Aarp org taxaide Section 501(c)(18)(D) plans. Aarp org taxaide Section 457 plans. Aarp org taxaide Qualified automatic contribution arrangements. Aarp org taxaide   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. Aarp org taxaide You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. Aarp org taxaide 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. Aarp org taxaide   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. Aarp org taxaide Overall limit on deferrals. Aarp org taxaide   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. Aarp org taxaide The limit for SIMPLE plans is $12,000. Aarp org taxaide The limit for section 501(c)(18)(D) plans is the lesser of $7,000 or 25% of your compensation. Aarp org taxaide The limit for section 457 plans is the lesser of your includible compensation or $17,500. Aarp org taxaide Amounts deferred under specific plan limits are part of the overall limit on deferrals. Aarp org taxaide Designated Roth contributions. Aarp org taxaide   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. Aarp org taxaide Designated Roth contributions are treated as elective deferrals, except that they are included in income. Aarp org taxaide Excess deferrals. Aarp org taxaide   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. Aarp org taxaide However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. Aarp org taxaide   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. Aarp org taxaide See Publication 525 for a discussion of the tax treatment of excess deferrals. Aarp org taxaide Catch-up contributions. Aarp org taxaide   You may be allowed catch-up contributions (additional elective deferral) if you are age 50 or older by the end of your tax year. Aarp org taxaide 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. Aarp org taxaide However, if your option is a statutory stock option, you will not have any income until you sell or exchange your stock. Aarp org taxaide Your employer can tell you which kind of option you hold. Aarp org taxaide For more information, see Publication 525. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide (You can choose to include the value of the property in your income in the year it is transferred to you. Aarp org taxaide ) For more information, see Restricted Property in Publication 525. Aarp org taxaide Dividends received on restricted stock. Aarp org taxaide   Dividends you receive on restricted stock are treated as compensation and not as dividend income. Aarp org taxaide Your employer should include these payments on your Form W-2. Aarp org taxaide Stock you chose to include in income. Aarp org taxaide   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. Aarp org taxaide Report them on your return as dividends. Aarp org taxaide For a discussion of dividends, see chapter 8. Aarp org taxaide    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. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide , in addition to your salary. Aarp org taxaide If the offering is made to the religious institution, it is not taxable to you. Aarp org taxaide 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. Aarp org taxaide However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. Aarp org taxaide See chapter 24. Aarp org taxaide Pension. Aarp org taxaide    A pension or retirement pay for a member of the clergy usually is treated as any other pension or annuity. Aarp org taxaide It must be reported on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Aarp org taxaide Housing. Aarp org taxaide    Special rules for housing apply to members of the clergy. Aarp org taxaide 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. Aarp org taxaide However, the exclusion cannot be more than the reasonable pay for your service. Aarp org taxaide If you pay for the utilities, you can exclude any allowance designated for utility cost, up to your actual cost. Aarp org taxaide The home or allowance must be provided as compensation for your services as an ordained, licensed, or commissioned minister. Aarp org taxaide 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. Aarp org taxaide For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Aarp org taxaide 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. Aarp org taxaide Services performed for the order. Aarp org taxaide   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. Aarp org taxaide   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. Aarp org taxaide Any wages you earn as an agent of an order that you turn over to the order are not included in your income. Aarp org taxaide Example. Aarp org taxaide You are a member of a church order and have taken a vow of poverty. Aarp org taxaide You renounce any claims to your earnings and turn over to the order any salaries or wages you earn. Aarp org taxaide You are a registered nurse, so your order assigns you to work in a hospital that is an associated institution of the church. Aarp org taxaide However, you remain under the general direction and control of the order. Aarp org taxaide 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. Aarp org taxaide Services performed outside the order. Aarp org taxaide   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. Aarp org taxaide They are part of the duties that you must exercise for, or on behalf of, the religious order as its agent. Aarp org taxaide 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. Aarp org taxaide Amounts you receive for these services are included in your income, even if you have taken a vow of poverty. Aarp org taxaide Example. Aarp org taxaide Mark Brown is a member of a religious order and has taken a vow of poverty. Aarp org taxaide He renounces all claims to his earnings and turns over his earnings to the order. Aarp org taxaide Mark is a schoolteacher. Aarp org taxaide He was instructed by the superiors of the order to get a job with a private tax-exempt school. Aarp org taxaide Mark became an employee of the school, and, at his request, the school made the salary payments directly to the order. Aarp org taxaide Because Mark is an employee of the school, he is performing services for the school rather than as an agent of the order. Aarp org taxaide The wages Mark earns working for the school are included in his income. Aarp org taxaide Foreign Employer Special rules apply if you work for a foreign employer. Aarp org taxaide U. Aarp org taxaide S. Aarp org taxaide citizen. Aarp org taxaide   If you are a U. Aarp org taxaide S. Aarp org taxaide 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. Aarp org taxaide Social security and Medicare taxes. Aarp org taxaide   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. Aarp org taxaide However, you must pay self-employment tax on your earnings from services performed in the United States, even though you are not self-employed. Aarp org taxaide This rule also applies if you are an employee of a qualifying wholly owned instrumentality of a foreign government. Aarp org taxaide Employees of international organizations or foreign governments. Aarp org taxaide   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). Aarp org taxaide   Your compensation for official services to a foreign government is exempt from federal income tax if all of the following are true. Aarp org taxaide 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). Aarp org taxaide Your work is like the work done by employees of the United States in foreign countries. Aarp org taxaide The foreign government gives an equal exemption to employees of the United States in its country. Aarp org taxaide Waiver of alien status. Aarp org taxaide   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. Aarp org taxaide See Foreign Employer in Publication 525. Aarp org taxaide Employment abroad. Aarp org taxaide   For information on the tax treatment of income earned abroad, see Publication 54. Aarp org taxaide 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. Aarp org taxaide Allowances generally are not taxed. Aarp org taxaide For more information on the tax treatment of military allowances and benefits, see Publication 3, Armed Forces' Tax Guide. Aarp org taxaide Differential wage payments. Aarp org taxaide   Any payments made to you by an employer during the time you are performing service in the uniformed services are treated as compensation. Aarp org taxaide These wages are subject to income tax withholding and are reported on a Form W-2. Aarp org taxaide See the discussion under Miscellaneous Compensation , earlier. Aarp org taxaide Military retirement pay. Aarp org taxaide   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. Aarp org taxaide 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. Aarp org taxaide   For more detailed discussion of survivor annuities, see chapter 10. Aarp org taxaide Disability. Aarp org taxaide   If you are retired on disability, see Military and Government Disability Pensions under Sickness and Injury Benefits, later. Aarp org taxaide Veterans' benefits. Aarp org taxaide   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). Aarp org taxaide The following amounts paid to veterans or their families are not taxable. Aarp org taxaide Education, training, and subsistence allowances. Aarp org taxaide Disability compensation and pension payments for disabilities paid either to veterans or their families. Aarp org taxaide Grants for homes designed for wheelchair living. Aarp org taxaide Grants for motor vehicles for veterans who lost their sight or the use of their limbs. Aarp org taxaide Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death. Aarp org taxaide Interest on insurance dividends you leave on deposit with the VA. Aarp org taxaide Benefits under a dependent-care assistance program. Aarp org taxaide The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001. Aarp org taxaide Payments made under the compensated work therapy program. Aarp org taxaide Any bonus payment by a state or political subdivision because of service in a combat zone. Aarp org taxaide 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. Aarp org taxaide Peace Corps. Aarp org taxaide   Living allowances you receive as a Peace Corps volunteer or volunteer leader for housing, utilities, household supplies, food, and clothing are exempt from tax. Aarp org taxaide Taxable allowances. Aarp org taxaide   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. Aarp org taxaide Living allowances designated by the Director of the Peace Corps as basic compensation. Aarp org taxaide These are allowances for personal items such as domestic help, laundry and clothing maintenance, entertainment and recreation, transportation, and other miscellaneous expenses. Aarp org taxaide Leave allowances. Aarp org taxaide Readjustment allowances or termination payments. Aarp org taxaide These are considered received by you when credited to your account. Aarp org taxaide Example. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide Volunteers in Service to America (VISTA). Aarp org taxaide   If you are a VISTA volunteer, you must include meal and lodging allowances paid to you in your income as wages. Aarp org taxaide National Senior Services Corps programs. Aarp org taxaide   Do not include in your income amounts you receive for supportive services or reimbursements for out-of-pocket expenses from the following programs. Aarp org taxaide Retired Senior Volunteer Program (RSVP). Aarp org taxaide Foster Grandparent Program. Aarp org taxaide Senior Companion Program. Aarp org taxaide Service Corps of Retired Executives (SCORE). Aarp org taxaide   If you receive amounts for supportive services or reimbursements for out-of-pocket expenses from SCORE, do not include these amounts in income. Aarp org taxaide Volunteer tax counseling. Aarp org taxaide   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). Aarp org taxaide   You can deduct as a charitable contribution your unreimbursed out-of-pocket expenses in taking part in the volunteer income tax assistance (VITA) program. Aarp org taxaide See chapter 24. Aarp org taxaide Sickness and Injury Benefits This section discusses sickness and injury benefits including disability pensions, long-term care insurance contracts, workers' compensation, and other benefits. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide However, certain payments may not be taxable to you. Aarp org taxaide 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. Aarp org taxaide In addition to disability pensions and annuities, you may be receiving other payments for sickness and injury. Aarp org taxaide Do not report as income any amounts paid to reimburse you for medical expenses you incurred after the plan was established. Aarp org taxaide Cost paid by you. Aarp org taxaide   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. Aarp org taxaide 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. Aarp org taxaide See Reimbursement in a later year in chapter 21. Aarp org taxaide Cafeteria plans. Aarp org taxaide   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. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A, until you reach minimum retirement age. Aarp org taxaide Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Aarp org taxaide You may be entitled to a tax credit if you were permanently and totally disabled when you retired. Aarp org taxaide For information on this credit and the definition of permanent and total disability, see chapter 33. Aarp org taxaide Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Aarp org taxaide Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Aarp org taxaide The rules for reporting pensions are explained in How To Report in chapter 10. Aarp org taxaide For information on disability payments from a governmental program provided as a substitute for unemployment compensation, see chapter 12. Aarp org taxaide Retirement and profit-sharing plans. Aarp org taxaide   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. Aarp org taxaide The payments must be reported as a pension or annuity. Aarp org taxaide For more information on pensions, see chapter 10. Aarp org taxaide Accrued leave payment. Aarp org taxaide   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. Aarp org taxaide The payment is not a disability payment. Aarp org taxaide Include it in your income in the tax year you receive it. Aarp org taxaide Military and Government Disability Pensions Certain military and government disability pensions are not taxable. Aarp org taxaide Service-connected disability. Aarp org taxaide   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. Aarp org taxaide The armed forces of any country. Aarp org taxaide The National Oceanic and Atmospheric Administration. Aarp org taxaide The Public Health Service. Aarp org taxaide The Foreign Service. Aarp org taxaide Conditions for exclusion. Aarp org taxaide   Do not include the disability payments in your income if any of the following conditions apply. Aarp org taxaide You were entitled to receive a disability payment before September 25, 1975. Aarp org taxaide 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. Aarp org taxaide You receive the disability payments for a combat-related injury. Aarp org taxaide 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. Aarp org taxaide You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it. Aarp org taxaide Your exclusion under this condition is equal to the amount you would be entitled to receive from the VA. Aarp org taxaide Pension based on years of service. Aarp org taxaide   If you receive a disability pension based on years of service, in most cases you must include it in your income. Aarp org taxaide 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. Aarp org taxaide You must include the rest of your pension in your income. Aarp org taxaide Retroactive VA determination. Aarp org taxaide   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. Aarp org taxaide 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. Aarp org taxaide You must include with each Form 1040X a copy of the official VA Determination letter granting the retroactive benefit. Aarp org taxaide The letter must show the amount withheld and the effective date of the benefit. Aarp org taxaide   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. Aarp org taxaide 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. Aarp org taxaide Special statute of limitations. Aarp org taxaide   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. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide Example. Aarp org taxaide You retired in 2007 and receive a pension based on your years of service. Aarp org taxaide On August 1, 2013, you receive a determination of service-connected disability retroactive to 2007. Aarp org taxaide Generally, you could claim a refund for the taxes paid on your pension for 2010, 2011, and 2012. Aarp org taxaide 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. Aarp org taxaide You cannot file a claim for 2007 and 2008 because those tax years began more than 5 years before the determination. Aarp org taxaide Terrorist attack or military action. Aarp org taxaide   Do not include in your income disability payments you receive for injuries resulting directly from a terrorist or military action. Aarp org taxaide Long-Term Care Insurance Contracts Long-term care insurance contracts in most cases are treated as accident and health insurance contracts. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide A long-term care insurance contract is an insurance contract that only provides coverage for qualified long-term care services. Aarp org taxaide 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. Aarp org taxaide Qualified long-term care services. Aarp org taxaide   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. Aarp org taxaide Chronically ill individual. Aarp org taxaide   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. Aarp org taxaide Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. Aarp org taxaide An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. Aarp org taxaide Limit on exclusion. Aarp org taxaide   You generally can exclude from gross income up to $320 a day for 2013. Aarp org taxaide See Limit on exclusion, under Long-Term Care Insurance Contracts, under Sickness and Injury Benefits in Publication 525 for more information. Aarp org taxaide 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. Aarp org taxaide The exemption also applies to your survivors. Aarp org taxaide 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. Aarp org taxaide 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. Aarp org taxaide For more information, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Aarp org taxaide Return to work. Aarp org taxaide    If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. Aarp org taxaide Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. Aarp org taxaide Railroad sick pay. Aarp org taxaide    Payments you receive as sick pay under the Railroad Unemployment Insurance Act are taxable and you must include them in your income. Aarp org taxaide However, do not include them in your income if they are for an on-the-job injury. Aarp org taxaide   If you received income because of a disability, see Disability Pensions , earlier. Aarp org taxaide Federal Employees' Compensation Act (FECA). Aarp org taxaide   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. Aarp org taxaide 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. Aarp org taxaide Report this income on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040-EZ. Aarp org taxaide Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. Aarp org taxaide    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. Aarp org taxaide For a discussion of the taxability of these benefits, see Social security and equivalent railroad retirement benefits under Other Income, in Publication 525. Aarp org taxaide    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. Aarp org taxaide It is a miscellaneous deduction subject to the 2%-of-AGI limit on Schedule A (Form 1040). Aarp org taxaide If you buy back sick leave in the same year you used it, the amount reduces your taxable sick leave pay. Aarp org taxaide Do not deduct it separately. Aarp org taxaide Other compensation. Aarp org taxaide   Many other amounts you receive as compensation for sickness or injury are not taxable. Aarp org taxaide These include the following amounts. Aarp org taxaide Compensatory damages you receive for physical injury or physical sickness, whether paid in a lump sum or in periodic payments. Aarp org taxaide 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. Aarp org taxaide Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. Aarp org taxaide Compensation you receive for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement. Aarp org taxaide This compensation must be based only on the injury and not on the period of your absence from work. Aarp org taxaide These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. Aarp org taxaide Reimbursement for medical care. Aarp org taxaide    A reimbursement for medical care is generally not taxable. Aarp org taxaide However, it may reduce your medical expense deduction. Aarp org taxaide For more information, see chapter 21. Aarp org taxaide Prev  Up  Next   Home   More Online Publications
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Understanding Your CP53C Notice

We tried to direct deposit your refund, but the financial institution couldn’t process it. When refund payments are questionable, we review related returns to ensure the return is valid. We are researching your account, but it will take 8 to 10 weeks to complete our review and verify this refund.


What you need to do

  • You don’t need to do anything at this time.

You may want to

  • Call us at the toll-free number on the notice if you don’t receive your refund check or a follow-up letter within 10 weeks
  • Monitor your financial accounts

However, if you call us before 10 weeks have passed, we won’t have any information about the status of your refund.


Answers to Common Questions

Q. Why was my direct deposit refund returned to the IRS?

A. A financial institution will reject a refund for a variety of reasons. Most often, the personal information on the direct deposit doesn’t match its records: 

  • Name
  • SSN
  • Routing number

Q. Why could the refund review take up to 10 weeks?

A. We must research your account to determine if you are entitled to the refund. We try to balance customer service and tax compliance when we review tax returns. Refund timeframes are also affected by:

  • Bankruptcy
  • An open audit
  • A balance due on a related account (such as a different tax year)

Q. Will calling the IRS give me additional information or speed my refund?

A. No, calling us won’t speed up your refund. You don’t need to call us unless we send you a letter asking ask you to contact us. Our telephone assistors won’t be able to provide any additional information.


Tips for next year

If you request a direct deposit refund, be sure the account you specify is in your name (or your spouse’s if you have a joint refund).


If you changed your name as a result of a recent marriage or divorce, be sure you’ll want to take the necessary steps to ensure the name on your tax return matches the name registered with the Social Security Administration.


Never direct your refund to an account that belongs to a relative, friend, or tax return preparer.

Page Last Reviewed or Updated: 22-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

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

The Aarp Org Taxaide

Aarp org taxaide 6. Aarp org taxaide   Dual-Status Tax Year Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Tax Year Income Subject to Tax Restrictions for Dual-Status Taxpayers Exemptions How To Figure TaxIncome Tax Credits and Payments Forms To File When and Where To File Introduction You have a dual-status tax year when you have been both a resident alien and a nonresident alien in the same year. Aarp org taxaide Dual status does not refer to your citizenship; it refers only to your resident status in the United States. Aarp org taxaide In determining your U. Aarp org taxaide S. Aarp org taxaide income tax liability for a dual-status tax year, different rules apply for the part of the year you are a resident of the United States and the part of the year you are a nonresident. Aarp org taxaide The most common dual-status tax years are the years of arrival and departure. Aarp org taxaide See Dual-Status Aliens in chapter 1. Aarp org taxaide If you are married and choose to be treated as a U. Aarp org taxaide S. Aarp org taxaide resident for the entire year, as explained in chapter 1, the rules of this chapter do not apply to you for that year. Aarp org taxaide Topics - This chapter discusses: Income subject to tax, Restrictions for dual-status taxpayers, Exemptions, How to figure the tax, Forms to file, When and where to file, and How to fill out a dual-status return. Aarp org taxaide Useful Items - You may want to see: Publication 503 Child and Dependent Care Expenses 514 Foreign Tax Credit for Individuals 575 Pension and Annuity Income Form (and Instructions) 1040 U. Aarp org taxaide S. Aarp org taxaide Individual Income Tax Return 1040-C U. Aarp org taxaide S. Aarp org taxaide Departing Alien Income Tax Return 1040-ES Estimated Tax for Individuals 1040-ES (NR) U. Aarp org taxaide S. Aarp org taxaide Estimated Tax for Nonresident Alien Individuals 1040NR U. Aarp org taxaide S. Aarp org taxaide Nonresident Alien Income Tax Return 1116 Foreign Tax Credit See chapter 12 for information about getting these publications and forms. Aarp org taxaide Tax Year You must file your tax return on the basis of an annual accounting period called a tax year. Aarp org taxaide If you have not previously established a fiscal tax year, your tax year is the calendar year. Aarp org taxaide A calendar year is 12 consecutive months ending on December 31. Aarp org taxaide If you have previously established a regular fiscal year (12 consecutive months ending on the last day of a month other than December, or a 52–53 week year) and are considered to be a U. Aarp org taxaide S. Aarp org taxaide resident for any calendar year, you will be treated as a U. Aarp org taxaide S. Aarp org taxaide resident for any part of your fiscal year that falls within that calendar year. Aarp org taxaide Income Subject to Tax For the part of the year you are a resident alien, you are taxed on income from all sources. Aarp org taxaide Income from sources outside the United States is taxable if you receive it while you are a resident alien. Aarp org taxaide The income is taxable even if you earned it while you were a nonresident alien or if you became a nonresident alien after receiving it and before the end of the year. Aarp org taxaide For the part of the year you are a nonresident alien, you are taxed on income from U. Aarp org taxaide S. Aarp org taxaide sources and on certain foreign source income treated as effectively connected with a U. Aarp org taxaide S. Aarp org taxaide trade or business. Aarp org taxaide (The rules for treating foreign source income as effectively connected are discussed in chapter 4 under Foreign Income. Aarp org taxaide ) Income from sources outside the United States that is not effectively connected with a trade or business in the United States is not taxable if you receive it while you are a nonresident alien. Aarp org taxaide The income is not taxable even if you earned it while you were a resident alien or if you became a resident alien or a U. Aarp org taxaide S. Aarp org taxaide citizen after receiving it and before the end of the year. Aarp org taxaide Income from U. Aarp org taxaide S. Aarp org taxaide sources is taxable whether you receive it while a nonresident alien or a resident alien unless specifically exempt under the Internal Revenue Code or a tax treaty provision. Aarp org taxaide Generally, tax treaty provisions apply only to the part of the year you were a nonresident. Aarp org taxaide In certain cases, however, treaty provisions may apply while you were a resident alien. Aarp org taxaide See chapter 9 for more information. Aarp org taxaide When determining what income is taxed in the United States, you must consider exemptions under U. Aarp org taxaide S. Aarp org taxaide tax law as well as the reduced tax rates and exemptions provided by tax treaties between the United States and certain foreign countries. Aarp org taxaide For a further discussion of tax treaties, see chapter 9. Aarp org taxaide Restrictions for Dual-Status Taxpayers The following restrictions apply if you are filing a tax return for a dual-status tax year. Aarp org taxaide 1) Standard deduction. Aarp org taxaide   You cannot use the standard deduction allowed on Form 1040. Aarp org taxaide However, you can itemize any allowable deductions. Aarp org taxaide 2) Exemptions. Aarp org taxaide   Your total deduction for the exemptions for your spouse and allowable dependents cannot be more than your taxable income (figured without deducting personal exemptions) for the period you are a resident alien. Aarp org taxaide 3) Head of household. Aarp org taxaide   You cannot use the head of household Tax Table column or Tax Computation Worksheet. Aarp org taxaide 4) Joint return. Aarp org taxaide   You cannot file a joint return. Aarp org taxaide However, see Choosing Resident Alien Status under Dual-Status Aliens in chapter 1. Aarp org taxaide 5) Tax rates. Aarp org taxaide   If you are married and a nonresident of the United States for all or part of the tax year and you do not choose to file jointly as discussed in chapter 1, you must use the Tax Table column or Tax Computation Worksheet for married filing separately to figure your tax on income effectively connected with a U. Aarp org taxaide S. Aarp org taxaide trade or business. Aarp org taxaide You cannot use the Tax Table column or Tax Computation Worksheet for married filing jointly or single. Aarp org taxaide However, you may be able to file as single if you lived apart from your spouse during the last 6 months of the year and you are a: Married resident of Canada, Mexico, or South Korea, or Married U. Aarp org taxaide S. Aarp org taxaide national. Aarp org taxaide  See the instructions for Form 1040NR to see if you qualify. Aarp org taxaide    A U. Aarp org taxaide S. Aarp org taxaide national is an individual who, although not a U. Aarp org taxaide S. Aarp org taxaide citizen, owes his or her allegiance to the United States. Aarp org taxaide U. Aarp org taxaide S. Aarp org taxaide nationals include American Samoans and Northern Mariana Islanders who chose to become U. Aarp org taxaide S. Aarp org taxaide nationals instead of U. Aarp org taxaide S. Aarp org taxaide citizens. Aarp org taxaide 6) Tax credits. Aarp org taxaide   You cannot claim the education credits, the earned income credit, or the credit for the elderly or the disabled unless: You are married, and You choose to be treated as a resident for all of 2013 by filing a joint return with your spouse who is a U. Aarp org taxaide S. Aarp org taxaide citizen or resident, as discussed in chapter 1. Aarp org taxaide Exemptions As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Aarp org taxaide Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Aarp org taxaide The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Aarp org taxaide You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Aarp org taxaide Special rules apply to exemptions for the part of the tax year you are a nonresident alien if you are a: Resident of Canada, Mexico, or South Korea, U. Aarp org taxaide S. Aarp org taxaide national, or Student or business apprentice from India. Aarp org taxaide For more information, see Exemptions in chapter 5. Aarp org taxaide How To Figure Tax When you figure your U. Aarp org taxaide S. Aarp org taxaide tax for a dual-status year, you are subject to different rules for the part of the year you are a resident and the part of the year you are a nonresident. Aarp org taxaide Income All income for your period of residence and all income that is effectively connected with a trade or business in the United States for your period of nonresidence, after allowable deductions, is added and taxed at the rates that apply to U. Aarp org taxaide S. Aarp org taxaide citizens and residents. Aarp org taxaide Income that is not connected with a trade or business in the United States for your period of nonresidence is subject to the flat 30% rate or lower treaty rate. Aarp org taxaide You cannot take any deductions against this income. Aarp org taxaide Social security and railroad retirement benefits. Aarp org taxaide   During the part of the year you are a nonresident alien, 85% of any U. Aarp org taxaide S. Aarp org taxaide social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Aarp org taxaide (See The 30% Tax in chapter 4. Aarp org taxaide )   During the part of the year you are a resident alien, part of the social security and the equivalent portion of tier 1 railroad retirement benefits will be taxed at graduated rates if your modified adjusted gross income plus half of these benefits is more than a certain base amount. Aarp org taxaide Use the Social Security Benefits Worksheet in the Form 1040 instructions to help you figure the taxable part of your social security and equivalent tier 1 railroad retirement benefits for the part of the year you were a resident alien. Aarp org taxaide If you received U. Aarp org taxaide S. Aarp org taxaide social security benefits while you were a nonresident alien, the Social Security Administration will send you Form SSA-1042S showing your combined benefits for the entire year and the amount of tax withheld. Aarp org taxaide You will not receive separate statements for the benefits received during your periods of U. Aarp org taxaide S. Aarp org taxaide residence and nonresidence. Aarp org taxaide Therefore, it is important for you to keep careful records of these amounts. Aarp org taxaide You will need this information to properly complete your return and determine your tax liability. Aarp org taxaide If you received railroad retirement benefits while you were a nonresident alien, the U. Aarp org taxaide S. Aarp org taxaide Railroad Retirement Board (RRB) will send you Form RRB-1042S, Statement for Nonresident Alien Recipients of Payments by the Railroad Retirement Board, and/or Form RRB-1099-R, Annuities or Pensions by the Railroad Retirement Board. Aarp org taxaide If your country of legal residence changed or your rate of tax changed during the tax year, you may receive more than one form. Aarp org taxaide Tax Credits and Payments This discussion covers tax credits and payments for dual-status aliens. Aarp org taxaide Credits As a dual-status alien, you generally can claim tax credits using the same rules that apply to resident aliens. Aarp org taxaide There are certain restrictions that may apply. Aarp org taxaide These restrictions are discussed here, along with a brief explanation of credits often claimed by individuals. Aarp org taxaide Foreign tax credit. Aarp org taxaide   If you have paid or are liable for the payment of income tax to a foreign country on income from foreign sources, you may be able to claim a credit for the foreign taxes. Aarp org taxaide   If you claim the foreign tax credit, you generally must file Form 1116 with your income tax return. Aarp org taxaide For more information, see the Instructions for Form 1116 and Publication 514. Aarp org taxaide Child and dependent care credit. Aarp org taxaide   You may qualify for this credit if you pay someone to care for your qualifying child who is under age 13, or your disabled dependent or disabled spouse so that you can work or look for work. Aarp org taxaide Generally, you must be able to claim an exemption for your dependent. Aarp org taxaide   Married dual-status aliens can claim the credit only if they choose to file a joint return as discussed in chapter 1, or if they qualify as certain married individuals living apart. Aarp org taxaide   The amount of your child and dependent care expense that qualifies for the credit in any tax year cannot be more than your earned income for that tax year. Aarp org taxaide   For more information, get Publication 503 and Form 2441. Aarp org taxaide Retirement savings contributions credit. Aarp org taxaide   You may qualify for this credit (also known as the saver's credit) if you made eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement (IRA) in 2013. Aarp org taxaide You cannot claim this credit if: You were born after January 1, 1996, You were a full-time student, Your exemption is claimed by someone else on his or her 2013 tax return, or Your adjusted gross income is more than $29,500. Aarp org taxaide Use Form 8880 to figure the credit. Aarp org taxaide For more information, see Publication 590. Aarp org taxaide Child tax credit. Aarp org taxaide   You may be able to take this credit if you have a qualifying child. Aarp org taxaide   A qualifying child for purposes of the child tax credit is a child who: Was under age 17 at the end of 2013. Aarp org taxaide Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew). Aarp org taxaide Is a U. Aarp org taxaide S. Aarp org taxaide citizen, a U. Aarp org taxaide S. Aarp org taxaide national, or a resident alien. Aarp org taxaide Did not provide over half of his or her own support for 2013. Aarp org taxaide Lived with you more than half of 2013. Aarp org taxaide Temporary absences, such as for school, vacation, or medical care, count as time lived in the home. Aarp org taxaide Is claimed as a dependent on your return. Aarp org taxaide An adopted child is always treated as your own child. Aarp org taxaide An adopted child includes a child lawfully placed with you for legal adoption. Aarp org taxaide   See your form instructions for additional details. Aarp org taxaide Adoption credit. Aarp org taxaide   You may qualify to take a tax credit of up to $12,970 for qualifying expenses paid to adopt an eligible child. Aarp org taxaide This amount may be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. Aarp org taxaide To claim the adoption credit, file Form 8839 with the U. Aarp org taxaide S. Aarp org taxaide income tax return that you file. Aarp org taxaide   Married dual-status aliens can claim the credit only if they choose to file a joint return with a U. Aarp org taxaide S. Aarp org taxaide citizen or resident spouse as discussed in chapter 1, or if they qualify as certain married individuals living apart (see Married Persons Not Filing Jointly in the Form 8839 instructions). Aarp org taxaide Payments You can report as payments against your U. Aarp org taxaide S. Aarp org taxaide income tax liability certain taxes you paid, are considered to have paid, or that were withheld from your income. Aarp org taxaide These include: Tax withheld from wages earned in the United States, Taxes withheld at the source from various items of income from U. Aarp org taxaide S. Aarp org taxaide sources other than wages, Estimated tax paid with Form 1040-ES or Form 1040-ES (NR), and Tax paid with Form 1040-C, at the time of departure from the United States. Aarp org taxaide Forms To File The U. Aarp org taxaide S. Aarp org taxaide income tax return you must file as a dual-status alien depends on whether you are a resident alien or a nonresident alien at the end of the tax year. Aarp org taxaide Resident at end of year. Aarp org taxaide   You must file Form 1040 if you are a dual-status taxpayer who becomes a resident during the year and who is a U. Aarp org taxaide S. Aarp org taxaide resident on the last day of the tax year. Aarp org taxaide Write “Dual-Status Return” across the top of the return. Aarp org taxaide Attach a statement to your return to show the income for the part of the year you are a nonresident. Aarp org taxaide You can use Form 1040NR or Form 1040NR-EZ as the statement, but be sure to mark “Dual-Status Statement” across the top. Aarp org taxaide Nonresident at end of year. Aarp org taxaide   You must file Form 1040NR or Form 1040NR-EZ if you are a dual-status taxpayer who gives up residence in the United States during the year and who is not a U. Aarp org taxaide S. Aarp org taxaide resident on the last day of the tax year. Aarp org taxaide Write “Dual-Status Return” across the top of the return. Aarp org taxaide Attach a statement to your return to show the income for the part of the year you are a resident. Aarp org taxaide You can use Form 1040 as the statement, but be sure to mark “Dual-Status Statement” across the top. Aarp org taxaide   If you expatriated or terminated your residency in 2013, you may be required to file an expatriation statement (Form 8854) with your tax return. Aarp org taxaide For more information, see Expatriation Tax in chapter 4. Aarp org taxaide Statement. Aarp org taxaide   Any statement must have your name, address, and taxpayer identification number on it. Aarp org taxaide You do not need to sign a separate statement or schedule accompanying your return, because your signature on the return also applies to the supporting statements and schedules. Aarp org taxaide When and Where To File If you are a resident alien on the last day of your tax year and report your income on a calendar year basis, you must file no later than April 15 of the year following the close of your tax year. Aarp org taxaide If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 4th month following the close of your tax year. Aarp org taxaide In either case, file your return with the address for dual-status aliens shown on the back page of the Form 1040 instructions. Aarp org taxaide If you are a nonresident alien on the last day of your tax year and you report your income on a calendar year basis, you must file no later than April 15 of the year following the close of your tax year if you receive wages subject to withholding. Aarp org taxaide If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 4th month following the close of your tax year. Aarp org taxaide If you did not receive wages subject to withholding and you report your income on a calendar year basis, you must file no later than June 15 of the year following the close of your tax year. Aarp org taxaide If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 6th month following the close of your tax year. Aarp org taxaide In any case, mail your return to:  Department of the Treasury Internal Revenue Service  Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. Aarp org taxaide O. Aarp org taxaide Box 1303 Charlotte, NC 28201-1303 If the regular due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day that is not a Saturday, Sunday, or legal holiday. Aarp org taxaide Prev  Up  Next   Home   More Online Publications