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Amend turbotax return Publication 4492-A - Main Contents Table of Contents DefinitionsKansas Disaster Area Storms and Tornadoes Casualty and Theft Losses Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Recovery Assistance Distributions Repayment of Qualified Recovery Assistance Distributions How To Report Qualified Recovery Assistance Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for BusinessesSpecial Depreciation Allowance Increased Section 179 Deduction Employee Retention Credit Demolition and Clean-up Costs Request for Copy or Transcript of Tax Return How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Amend turbotax return Definitions The following definitions are used throughout this publication. Amend turbotax return Kansas Disaster Area The Kansas disaster area covers the Kansas counties of Barton, Clay, Cloud, Comanche, Dickinson, Edwards, Ellsworth, Kiowa, Leavenworth, Lyon, McPherson, Osage, Osborne, Ottawa, Phillips, Pottawatomie, Pratt, Reno, Rice, Riley, Saline, Shawnee, Smith, and Stafford. Amend turbotax return Storms and Tornadoes The term “storms and tornadoes” as used in this publication, refers to the storms and tornadoes that began on May 4, 2007, and affected the Kansas disaster area (defined above). Amend turbotax return Casualty and Theft Losses The following paragraphs explain changes to casualty and theft losses that occurred in the Kansas disaster area. Amend turbotax return Limits on personal casualty or theft losses in the Kansas disaster area. Amend turbotax return   Losses of personal use property that arose in the Kansas disaster area after May 3, 2007, are not subject to the $100 or 10% of adjusted gross income limits. Amend turbotax return Qualifying losses include losses from casualties and thefts that arose in the disaster area and that were attributable to the storms and tornadoes. Amend turbotax return When to deduct the loss. Amend turbotax return   Casualty and theft losses are generally deductible only in the year the casualty occurred or the theft was discovered. Amend turbotax return However, the Kansas disaster area is a Presidentially declared disaster. Amend turbotax return Therefore, you could have elected to deduct losses from these storms and tornadoes on your tax return for the previous year. Amend turbotax return The deadline for making this election has expired. Amend turbotax return   The following special instructions explain how to complete your forms if you deduct the loss in 2007 or elected to deduct the loss in 2006. Amend turbotax return Special instructions for individuals who file Form 4684 to claim a Kansas disaster area casualty or theft loss for 2007 or are amending their 2006 return. Amend turbotax return   Individuals filing or amending their 2007 tax return or amending their 2006 tax return for casualty or theft losses that were attributable to the storms and tornadoes should enter “Kansas Disaster Area” at the top of Form 1040 or 1040X. Amend turbotax return They must also complete and attach the 2006 version of Form 4684 for either year and enter “Kansas Disaster Area” on the top and on the dotted line next to line 11 and enter -0- on line 11. Amend turbotax return Individuals filing or amending their 2007 tax return should cross out “2006” and enter “2007” at the top of Form 4684. Amend turbotax return They must also enter the amount from line 21 of that form on line 20 of Schedule A (Form 1040). Amend turbotax return Replacement Period for Nonrecognition of Gain Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. Amend turbotax return Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a Presidentially declared disaster area). Amend turbotax return However, for property that was involuntarily converted after May 3, 2007, as a result of the storms and tornadoes, a 5-year replacement period applies if substantially all of the use of the replacement property is in the Kansas disaster area. Amend turbotax return For more information, see the Instructions for Form 4684. Amend turbotax return Net Operating Losses Qualified recovery assistance loss. Amend turbotax return   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. Amend turbotax return However, the portion of an NOL that is a qualified recovery assistance loss can be carried back to the 5 tax years before the NOL year. Amend turbotax return In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. Amend turbotax return   A qualified recovery assistance loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified recovery assistance casualty loss (as defined below), Moving expenses paid or incurred after May 3, 2007, and before January 1, 2010, for the employment of an individual whose main home was in the Kansas disaster area before May 4, 2007, who was unable to remain in that home because of the storms and tornadoes, and whose main job location (after the move) is in the Kansas disaster area, Temporary housing expenses paid or incurred after May 3, 2007, and before January 1, 2010, to house employees of the taxpayer whose main job location is in the Kansas disaster area, Depreciation or amortization allowable for any qualified recovery assistance property (even if you elected not to claim the special recovery assistance depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred after May 3, 2007, and before January 1, 2010, for any damage from the storms and tornadoes to property located in the Kansas disaster area. Amend turbotax return Qualified recovery assistance casualty loss. Amend turbotax return   A qualified recovery assistance casualty loss is any deductible section 1231 loss of property located in the Kansas disaster area if the loss was caused by the storms and tornadoes. Amend turbotax return For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by the storms and tornadoes of property located in the Kansas disaster area. Amend turbotax return Any such loss taken into account in figuring your qualified recovery assistance loss is not eligible for the election to be treated as having occurred in the previous tax year. Amend turbotax return Amended return. Amend turbotax return   If you have already filed your 2007 tax return and then carried your NOL back 2 years, you may file an amended return to carry back for 5 years your NOL attributable to a qualified recovery assistance loss. Amend turbotax return More information. Amend turbotax return    For more information on NOLs, see Publication 536. Amend turbotax return IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for individuals who suffered economic losses as a result of the storms and tornadoes. Amend turbotax return Definitions Qualified recovery assistance distribution. Amend turbotax return   Except as provided below, a qualified recovery assistance distribution is any distribution you received and designated as such from an eligible retirement plan if all of the following apply. Amend turbotax return The distribution was made after May 3, 2007, and before January 1, 2009. Amend turbotax return Your main home was located in the Kansas disaster area on May 4, 2007. Amend turbotax return You sustained an economic loss because of the storms and tornadoes. Amend turbotax return Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Amend turbotax return   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified recovery assistance distribution, regardless of whether the distribution was made on account of the storms and tornadoes. Amend turbotax return Qualified recovery assistance distributions are permitted without regard to your need or the actual amount of your economic loss. Amend turbotax return   The total of your qualified recovery assistance distributions from all plans is limited to $100,000. Amend turbotax return If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the plans any way you choose. Amend turbotax return   A reduction or offset after May 3, 2007, of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified recovery assistance distribution. Amend turbotax return Eligible retirement plan. Amend turbotax return   An eligible retirement plan can be any of the following. Amend turbotax return A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). Amend turbotax return A qualified annuity plan. Amend turbotax return A tax-sheltered annuity contract. Amend turbotax return A governmental section 457 deferred compensation plan. Amend turbotax return A traditional, SEP, SIMPLE, or Roth IRA. Amend turbotax return Main home. Amend turbotax return   Generally, your main home is the home where you live most of the time. Amend turbotax return A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. Amend turbotax return Taxation of Qualified Recovery Assistance Distributions Qualified recovery assistance distributions are included in income in equal amounts over three years. Amend turbotax return However, if you elect, you can include the entire distribution in your income in the year it was received. Amend turbotax return Qualified recovery assistance distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). Amend turbotax return However, any distributions you receive in excess of the $100,000 qualified recovery assistance distribution limit may be subject to the additional tax on early distributions. Amend turbotax return For more information, see How To Report Qualified Recovery Assistance Distributions on page 4. Amend turbotax return Repayment of Qualified Recovery Assistance Distributions If you choose, you generally can repay any portion of a qualified recovery assistance distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. Amend turbotax return Also, you can repay a qualified recovery assistance distribution made on account of a hardship from a retirement plan. Amend turbotax return However, see Exceptions below for qualified recovery assistance distributions you cannot repay. Amend turbotax return You have three years from the day after the date you received the distribution to make a repayment. Amend turbotax return Amounts that are repaid are treated as a qualified rollover and are not included in income. Amend turbotax return Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. Amend turbotax return See Form 8915 for more information on how to report repayments. Amend turbotax return Exceptions. Amend turbotax return   You cannot repay the following types of distributions. Amend turbotax return Qualified recovery assistance distributions received as a beneficiary (other than a surviving spouse). Amend turbotax return Required minimum distributions. Amend turbotax return Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. Amend turbotax return How To Report Qualified Recovery Assistance Distributions You will need the following information to correctly report any 2007 or 2008 qualified recovery assistance distributions. Amend turbotax return 2007 Qualified Recovery Assistance Distributions If you received a distribution after May 3, 2007, from an eligible retirement plan, you may be able to designate it as a qualified recovery assistance distribution. Amend turbotax return See Qualified recovery assistance distribution on page 3. Amend turbotax return If you have not filed your 2007 income tax return, see Form 8915 and Form 8606 on this page to see how to complete these forms for any qualified recovery assistance distributions. Amend turbotax return Be sure to attach Form 8915 and Form 8606 (if required) to your 2007 income tax return. Amend turbotax return If you have filed your 2007 income tax return, you will need to amend your return to designate any distributions as qualified recovery assistance distributions. Amend turbotax return You can amend your 2007 income tax return by using Form 1040X. Amend turbotax return You will need to complete and attach Form 8915 and Form 8606 (if required) to your amended income tax return for any qualified recovery assistance distributions. Amend turbotax return See Form 8915 and Form 8606 on this page. Amend turbotax return Form 8915. Amend turbotax return   For a 2007 qualified recovery assistance distribution, complete the 2005 Form 8915, Qualified Hurricane Retirement Plan Distributions and Repayments. Amend turbotax return Before you complete the form, modify the form as follows. Amend turbotax return Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. Amend turbotax return ” To the right of the title, cross out “2005” and enter “2007. Amend turbotax return ” In Part I, at the top of column (a), cross out “2005” and enter “2007. Amend turbotax return ” In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance. Amend turbotax return ” On lines 10 and 11, cross out “2005” and enter “2007. Amend turbotax return ” In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance. Amend turbotax return ” On line 12, cross out “hurricane” and enter “recovery assistance. Amend turbotax return ” On lines 13 and 14, cross out “line 15b” and “line 25b. Amend turbotax return ” On lines 18 and 19, cross out “2005” and enter “2007. Amend turbotax return ”   You can now complete Form 8915. Amend turbotax return For the instructions, use the applicable dates and terms in this publication instead of those used in the 2005 Form 8915 instructions. Amend turbotax return See Example 1 on page 5 to see how to complete Form 8915. Amend turbotax return Form 8606. Amend turbotax return   For a 2007 qualified recovery assistance distribution, complete or amend the 2007 Form 8606, Nondeductible IRAs. Amend turbotax return Before you complete or amend the form, use the following additional instructions. Amend turbotax return Form 8606, Part I. Amend turbotax return    On line 6, subtract any repayments of qualified recovery assistance distributions from the amount you would otherwise enter on line 6. Amend turbotax return Do not enter an amount less than -0-. Amend turbotax return Include on line 7 the amount of any qualified recovery assistance distributions that you received even if they were later repaid. Amend turbotax return Complete line 15 as follows. Amend turbotax return If all of your distributions are qualified recovery assistance distributions, enter the amount from line 15 on Form 8915, line 13. Amend turbotax return Do not enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Amend turbotax return If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount on line 15 by a fraction. Amend turbotax return The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the amount from Form 8606, line 7. Amend turbotax return Enter the result in the white space in the bottom margin of the form under line 15. Amend turbotax return To the left of this amount, enter “Qualified recovery assistance distributions” and also enter this amount on Form 8915, line 13. Amend turbotax return Then, subtract this amount from the amount on line 15 and include the result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Amend turbotax return Also, enter this amount on Form 8606 under your qualified recovery assistance distributions. Amend turbotax return To the left of this amount, enter “Other distributions. Amend turbotax return ” Form 8606, Part III. Amend turbotax return    Include on line 19 the amount of any qualified recovery assistance distributions that you received even if they were later repaid. Amend turbotax return Complete line 25 as follows. Amend turbotax return If all of your distributions are qualified recovery assistance distributions, enter the amount from line 25 on Form 8915, line 14. Amend turbotax return Do not enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Amend turbotax return If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount on line 25 by a fraction. Amend turbotax return The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the amount from Form 8606, line 21. Amend turbotax return Enter the result in the white space in the bottom margin of the form under line 25. Amend turbotax return To the left of this amount, enter “Qualified recovery assistance distributions” and also enter this amount on Form 8915, line 14. Amend turbotax return Then, subtract this amount from the amount on line 25 and include the result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Amend turbotax return Also, enter this amount on Form 8606 under your qualified recovery assistance distributions. Amend turbotax return To the left of this amount, enter “Other distributions. Amend turbotax return ” Example 1. Amend turbotax return   On May 4, 2007, Margaret Maple lost her home due to the tornadoes on that day. Amend turbotax return Her home was located in the Kansas disaster area. Amend turbotax return On July 31, 2007, Margaret took out $30,000 from her 401(k) plan and an additional $15,000 from her traditional IRA in order to rebuild her home. Amend turbotax return Margaret has not filed her 2007 return yet but would like to designate the $45,000 in distributions from her retirement plans as qualified recovery assistance distributions. Amend turbotax return Since the distributions occurred in 2007, Margaret would modify and complete the 2005 Form 8915 as discussed on page 4. Amend turbotax return Margaret would also need to complete Form 8606 since her distribution from her traditional IRA has nondeductible contributions from previous years. Amend turbotax return   In addition to the $15,000 qualified recovery assistance distribution on July 31, 2007, Margaret received an additional distribution of $15,000 from her traditional IRA on October 31, 2007, that she did not designate as a qualified recovery assistance distribution. Amend turbotax return Because Margaret has a qualified recovery assistance distribution as well as a distribution not so designated, Margaret must allocate the amount on Form 8606, line 15 to both distributions, as discussed earlier. Amend turbotax return Margaret's qualified recovery assistance distributions are $13,125 ($26,250 × $15,000 ÷ $30,000). Amend turbotax return Margaret enters in the white space in the bottom margin of Form 8606, the following, “Qualified recovery assistance distributions $13,125. Amend turbotax return ” This amount is then reported on Form 8915, line 13. Amend turbotax return Below this entry, Margaret enters “Other distributions $13,125,” and includes this amount on Form 1040, line 15b. Amend turbotax return See Margaret's modified 2005 Form 8915 and 2007 Form 8606 shown on pages 6 through 8. Amend turbotax return This image is too large to be displayed in the current screen. Amend turbotax return Please click the link to view the image. Amend turbotax return 2005 Form 8915, page 1, Illustrated Example 1. Amend turbotax return This image is too large to be displayed in the current screen. Amend turbotax return Please click the link to view the image. Amend turbotax return 2005 Form 8915, page 2, Illustrated Example 1 This image is too large to be displayed in the current screen. Amend turbotax return Please click the link to view the image. Amend turbotax return Form 8606, page 1, Illustrated Example 1 2008 Qualified Recovery Assistance Distributions If you received a distribution in 2008 from an eligible retirement plan, you may be able to designate it as a qualified recovery assistance distribution. Amend turbotax return See Qualified recovery assistance distribution on page 3. Amend turbotax return You will need to complete and attach Form 8915 and Form 8606 (if required) to your 2008 income tax return for any qualified recovery assistance distributions. Amend turbotax return See Form 8915 and Form 8606 below. Amend turbotax return Form 8915. Amend turbotax return   For a 2008 qualified recovery assistance distribution, you will need to complete the 2006 Form 8915. Amend turbotax return Before you complete the form, modify the form as follows. Amend turbotax return Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. Amend turbotax return ” To the right of the title, cross out “2006” and enter “2008. Amend turbotax return ” In the first sentence of Part I and on line 1, cross out “hurricane” and enter “recovery assistance,” cross out “2006” and enter “2008,” and cross out “2005” and enter “2007. Amend turbotax return ” At the top of column (a) cross out “2006” and enter “2008. Amend turbotax return ” In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance. Amend turbotax return ” On lines 12, 14, and 15, cross out “2005” and enter “2007. Amend turbotax return ” On lines 17 and 19, cross out “2006” and enter “2008. Amend turbotax return ” In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance. Amend turbotax return ” On line 21, cross out “hurricane” and enter “recovery assistance. Amend turbotax return ” On lines 22 and 23, cross out “line 15b” and “line 25b. Amend turbotax return ” On lines 27, 29, and 30, cross out “2005” and enter “2007. Amend turbotax return ” On lines 32 and 34, cross out “2006” and enter “2008. Amend turbotax return ”   You can now complete Form 8915. Amend turbotax return For the instructions, use the applicable dates and terms in this publication instead of those used in the 2006 Form 8915 instructions. Amend turbotax return Example 2. Amend turbotax return   On June 15, 2008, Margaret Maple, from the previous example, took out $15,000 from her 401(k) plan that she is designating as a qualified recovery assistance distribution. Amend turbotax return Since the distribution occurred in 2008, Margaret would modify and complete the 2006 Form 8915 as discussed above. Amend turbotax return Also, since Margaret is including her 2007 recovery assistance distributions in income over 3 years, she reports the applicable amount of those distributions on the modified 2006 Form 8915. Amend turbotax return See Margaret's modified 2006 Form 8915 shown on pages 9 and 10. Amend turbotax return This image is too large to be displayed in the current screen. Amend turbotax return Please click the link to view the image. Amend turbotax return 2006 Form 8915, page 1, Illustrated Example 2 This image is too large to be displayed in the current screen. Amend turbotax return Please click the link to view the image. Amend turbotax return 2006 Form 8915, page 2, Illustrated Example 2 Form 8606. Amend turbotax return   For a 2008 qualified recovery assistance distribution, you may need to complete the 2008 Form 8606. Amend turbotax return Before you complete Form 8606, use the additional instructions outlined in Form 8606, Part I, on page 4 and Form 8606, Part III, on this page. Amend turbotax return Repayment of Qualified Distributions for the Purchase or Construction of a Main Home If you received a qualified distribution to purchase or construct a main home in the Kansas disaster area, you can repay part or all of that distribution after May 3, 2007, but no later than October 22, 2008, to an eligible retirement plan. Amend turbotax return For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. Amend turbotax return To be a qualified distribution, the distribution must meet all of the following requirements. Amend turbotax return The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. Amend turbotax return The distribution was received after November 4, 2006, and before May 5, 2007. Amend turbotax return The distribution was to be used to purchase or construct a main home in the Kansas disaster area that was not purchased or constructed because of the storms and tornadoes. Amend turbotax return Amounts that are repaid before October 23, 2008, are treated as a qualified rollover and are not included in income. Amend turbotax return Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. Amend turbotax return A qualified distribution not repaid before October 23, 2008, may be taxable for 2006 or 2007 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. Amend turbotax return You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before October 23, 2008. Amend turbotax return See How to report, next, for information on completing Form 8915. Amend turbotax return How to report. Amend turbotax return   To report the repayment of a qualified distribution for the purchase or construction of a main home that was not purchased or constructed due to the storms and tornadoes, use the 2005 Form 8915, Part IV. Amend turbotax return Before you complete the form, modify the form as follows. Amend turbotax return Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. Amend turbotax return ” To the right of the title, cross out “2005” and enter “2006” or “2007. Amend turbotax return ” Enter only the year the distribution was received. Amend turbotax return Cross out “Hurricane” in the title of Part IV and enter “Kansas. Amend turbotax return ” In the sentence below the title of Part IV, cross out “March 1, 2006” and enter “October 23, 2008. Amend turbotax return ” On line 24, cross out “March 1, 2006” and enter “October 23, 2008. Amend turbotax return ” You can now complete Part IV of Form 8915. Amend turbotax return Use the applicable dates and terms in this publication instead of those used in the 2005 Form 8915 instructions to complete the form. Amend turbotax return Attach Form 8915 to your original or amended return for the year of the distribution. Amend turbotax return Amended return. Amend turbotax return   If you repay part or all of a qualified distribution by October 22, 2008, you will need to file an amended return for that part of a distribution that was previously included in income. Amend turbotax return Loans From Qualified Plans The following benefits are available to qualified individuals. Amend turbotax return Increases to the limits for distributions treated as loans from employer plans. Amend turbotax return A 1-year suspension for payments due on plan loans. Amend turbotax return Qualified individual. Amend turbotax return   You are a qualified individual if your main home on May 4, 2007, was located in the Kansas disaster area and you had an economic loss because of the storms and tornadoes. Amend turbotax return Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Amend turbotax return Limits on plan loans. Amend turbotax return   The $50,000 limit for distributions treated as plan loans is increased to $100,000. Amend turbotax return In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. Amend turbotax return If your home was located in the Kansas disaster area, the higher limits apply only to loans received during the period beginning on May 22, 2008, and ending on December 31, 2008. Amend turbotax return One-year suspension of loan payments. Amend turbotax return   Payments on plan loans outstanding after May 3, 2007, may be suspended for 1 year by the plan administrator. Amend turbotax return To qualify for the suspension, the due date for any loan payment must occur during the period beginning on May 4, 2007, and ending on December 31, 2008. Amend turbotax return Additional Tax Relief for Businesses Special Depreciation Allowance You can take a special depreciation allowance for qualified recovery assistance property (as defined below) you acquire after May 4, 2007. Amend turbotax return The special allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and before figuring your regular depreciation deduction). Amend turbotax return The special allowance applies only for the first year the property is placed in service. Amend turbotax return The special allowance is deductible for both the regular tax and the alternative minimum tax (AMT). Amend turbotax return There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. Amend turbotax return You can elect not to deduct the special allowance for qualified recovery assistance property. Amend turbotax return If you make this election for any property, it applies to all property in the same class placed in service during the year. Amend turbotax return Qualified recovery assistance property. Amend turbotax return   Property that qualifies for the special allowance for qualified recovery assistance property includes the following. Amend turbotax return Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. Amend turbotax return Water utility property. Amend turbotax return Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. Amend turbotax return (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. Amend turbotax return ) Qualified leasehold improvement property. Amend turbotax return Nonresidential real property and residential rental property. Amend turbotax return   For more information on this property, see Publication 946. Amend turbotax return Other tests to be met. Amend turbotax return   To be qualified recovery assistance property, the property must also meet all of the following tests. Amend turbotax return You must have acquired the property, by purchase, after May 4, 2007, but only if no binding written contract for the acquisition was in effect before May 5, 2007. Amend turbotax return The property must be placed in service before 2009 (2010 in the case of nonresidential real property and residential rental property). Amend turbotax return Substantially all of the use of the property must be in the Kansas disaster area and in the active conduct of your trade or business in the Kansas disaster area. Amend turbotax return The original use of the property in the Kansas disaster area must begin with you after May 4, 2007. Amend turbotax return Used property can be qualified recovery assistance property if it has not previously been used within the Kansas disaster area. Amend turbotax return Also, additional capital expenditures you incurred after May 4, 2007, to recondition or rebuild your property meet the original use test if the original use of the property in the Kansas disaster area began with you. Amend turbotax return Excepted property. Amend turbotax return   Qualified recovery assistance property does not include any of the following. Amend turbotax return Property required to be depreciated using the Alternative Depreciation System (ADS). Amend turbotax return Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103. Amend turbotax return Property for which you are claiming a commercial revitalization deduction. Amend turbotax return Property in the same class as that for which you elected not to claim the special allowance for qualified recovery assistance property. Amend turbotax return Property placed in service and disposed of in the same tax year. Amend turbotax return Property converted from business use to personal use in the same tax year it is placed in service. Amend turbotax return Property converted from personal use to business use in the same or later tax year may be qualified recovery assistance property. Amend turbotax return Recapture of special allowance. Amend turbotax return   If, in any year after the year you claim the special allowance, the property ceases to be qualified recovery assistance property, you may have to recapture as ordinary income any excess benefit you received from claiming the special allowance. Amend turbotax return Amended return. Amend turbotax return   If you have already filed your tax return, you may have to amend that return to claim any special allowance. Amend turbotax return Additional guidance will be published on how you may claim, or elect not to claim, the special allowance if you have already filed your tax return. Amend turbotax return Increased Section 179 Deduction An increased section 179 deduction is allowable for qualified section 179 recovery assistance property (as defined later) placed in service in the Kansas disaster area. Amend turbotax return Increased dollar limit. Amend turbotax return   The limit on the section 179 deduction ($125,000 for 2007, $250,000 for 2008) is increased by the smaller of: $100,000, or The cost of qualified section 179 recovery assistance property placed in service during the year (including such property placed in service by your spouse, even if you are filing a separate return). Amend turbotax return   The amount for which you can make the election is reduced if the cost of all section 179 property you placed in service during the year exceeds $500,000 for 2007 and $800,000 for 2008 increased by the smaller of: $600,000, or The cost of qualified section 179 recovery assistance property placed in service during the year. Amend turbotax return Qualified section 179 recovery assistance property. Amend turbotax return   Qualified section 179 recovery assistance property is section 179 property that is qualified recovery assistance property (explained earlier under Special Depreciation Allowance). Amend turbotax return Section 179 property does not include nonresidential real property or residential rental property. Amend turbotax return For more information, including the requirements that must be met for property to qualify for the section 179 deduction, see chapter 2 of Publication 946. Amend turbotax return Amended return. Amend turbotax return   If you have already filed your tax return, you may have to amend that return for any increased section 179 deduction. Amend turbotax return Employee Retention Credit An eligible employer who conducted an active trade or business in the Kansas disaster area can claim the employee retention credit. Amend turbotax return The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). Amend turbotax return Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Amend turbotax return Use Form 5884-A to claim the credit. Amend turbotax return See Form 5884-A later. Amend turbotax return The following rules and definitions apply. Amend turbotax return Employers affected by the storms and tornadoes. Amend turbotax return   The following definitions apply to employers affected by the storms and tornadoes. Amend turbotax return Eligible employer. Amend turbotax return   For this purpose, an eligible employer is any employer who meets all of the following. Amend turbotax return Employed an average of not more than 200 employees on business days during the tax year before May 4, 2007. Amend turbotax return Conducted an active trade or business on May 4, 2007, in the Kansas disaster area. Amend turbotax return Whose trade or business was inoperable on any day after May 4, 2007, and before January 1, 2008, because of damage caused by the storms and tornadoes. Amend turbotax return Eligible employee. Amend turbotax return   For this purpose, an eligible employee is an employee whose principal place of employment on May 4, 2007, with the eligible employer was in the Kansas disaster area. Amend turbotax return An employee is not an eligible employee for purposes of the storms and tornadoes if the employee is treated as an eligible employee for the work opportunity credit. Amend turbotax return Qualified wages. Amend turbotax return   Qualified wages are wages you paid or incurred before January 1, 2008, (up to $6,000 per employee) for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before May 4, 2007, and ending on the date your trade or business resumed significant operations at that place. Amend turbotax return In addition, the wages must have been paid or incurred after May 4, 2007. Amend turbotax return    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. Amend turbotax return    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). Amend turbotax return Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. Amend turbotax return Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. Amend turbotax return   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. Amend turbotax return For a special rule that applies to railroad employees, see section 51(h)(1)(B). Amend turbotax return   Qualified wages do not include the following. Amend turbotax return Wages paid to your dependent or a related individual. Amend turbotax return See section 51(i)(1). Amend turbotax return Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. Amend turbotax return Wages for services of replacement workers during a strike or lockout. Amend turbotax return Form 5884-A. Amend turbotax return   Use Section A of Form 5884-A (Rev. Amend turbotax return October 2006) to claim the employer retention credit. Amend turbotax return Section B does not apply to the Kansas disaster area. Amend turbotax return Before you complete the form, modify the form as follows. Amend turbotax return Cross out “Hurricane Katrina, Rita, or Wilma” in the title at the top of the form and enter “Kansas Storms and Tornadoes. Amend turbotax return ” On line 1a cross out “Hurricane Katrina” and enter “Kansas Storms and Tornadoes,” cross out “August 28, 2005,” and enter “May 4, 2007,” and cross out “January 1, 2006,” and enter “January 1, 2008. Amend turbotax return ”   Complete the form as instructed. Amend turbotax return Lines 1b and 1c do not apply. Amend turbotax return Include the amount from Form 5884-A, line 4 in the amount entered on Form 3800, line 1x. Amend turbotax return On the dotted line to the left of line 1x, enter “5884-A. Amend turbotax return ” Use the applicable dates and terms in this publication instead of those used in the Form 5884-A instructions. Amend turbotax return Amended return. Amend turbotax return   You may have to amend a previously filed return to claim the employee retention credit. Amend turbotax return Demolition and Clean-up Costs You can elect to deduct 50% of any qualified recovery assistance clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. Amend turbotax return Qualified recovery assistance clean-up costs are any amounts paid or incurred after May 3, 2007, and before January 1, 2010, for the removal of debris from, or the demolition of structures on, real property located in the Kansas disaster area that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. Amend turbotax return Amended return. Amend turbotax return   If you have already filed your tax return, you may have to amend that return to claim the 50% of any qualified recovery assistance clean-up costs. Amend turbotax return Request for Copy or Transcript of Tax Return Request for copy of tax return. Amend turbotax return   You can use Form 4506 to order a copy of your tax return. Amend turbotax return Generally, there is a $39. Amend turbotax return 00 fee (subject to change) for requesting each copy of a tax return. Amend turbotax return If your main home, principal place of business, or tax records are located in a Presidentially declared disaster area, the fee will be waived if the assigned disaster designation (for example, “Kansas Storms”) is written in red across the top of the form when filed. Amend turbotax return Request for transcript of tax return. Amend turbotax return   You can use Form 4506-T to order a free transcript of your tax return. Amend turbotax return A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. Amend turbotax return You can also call 1-800-829-1040 to order a transcript. Amend turbotax return How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Amend turbotax return By selecting the method that is best for you, you will have quick and easy access to tax help. Amend turbotax return Contacting your Taxpayer Advocate. Amend turbotax return   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. Amend turbotax return   You can contact the TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059 to see if you are eligible for assistance. Amend turbotax return You can also call or write to your local taxpayer advocate, whose phone number and address are listed in your local telephone directory and in Publication 1546, Taxpayer Advocate Service — Your Voice at the IRS. Amend turbotax return You can file Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on your behalf. Amend turbotax return For more information, go to www. Amend turbotax return irs. Amend turbotax return gov/advocate. Amend turbotax return Low Income Taxpayer Clinics (LITCs). Amend turbotax return   LITCs are independent organizations that provide low income taxpayers with representation in federal tax controversies with the IRS for free or for a nominal charge. Amend turbotax return The clinics also provide tax education and outreach for taxpayers who speak English as a second language. Amend turbotax return Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics in your area. Amend turbotax return It is available at www. Amend turbotax return irs. Amend turbotax return gov or your local IRS office. Amend turbotax return Free tax services. Amend turbotax return   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. Amend turbotax return It contains lists of free tax information sources, including publications, services, and free tax education and assistance programs. Amend turbotax return It also has an index of over 100 TeleTax topics, (recorded tax information) you can listen to on your telephone. Amend turbotax return   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. Amend turbotax return Free help with your return. Amend turbotax return   Free help in preparing your return is available nationwide from IRS-trained volunteers. Amend turbotax return The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers and Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Amend turbotax return Many VITA sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Amend turbotax return To find a site near you, call 1-800-829-1040. Amend turbotax return Or to find the nearest AARP TaxAide site, visit AARP's website at www. Amend turbotax return aarp. Amend turbotax return org/taxaide or call 1-888-227-7669. Amend turbotax return For more information on these programs, go to www. Amend turbotax return irs. Amend turbotax return gov and enter keyword “VITA” in the upper right-hand corner. Amend turbotax return Internet. Amend turbotax return You can access the IRS website at www. Amend turbotax return irs. Amend turbotax return gov 24 hours a day, 7 days a week to: E-file your return. Amend turbotax return Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Amend turbotax return Check the status of your refund. Amend turbotax return Click on Where's My Refund. Amend turbotax return Wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Amend turbotax return Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. Amend turbotax return Download forms, instructions, and publications. Amend turbotax return Order IRS products online. Amend turbotax return Research your tax questions online. Amend turbotax return Search publications online by topic or keyword. Amend turbotax return View Internal Revenue Bulletins (IRBs) published in the last few years. Amend turbotax return Figure your withholding allowances using the withholding calculator online at www. Amend turbotax return irs. Amend turbotax return gov/individuals. Amend turbotax return Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant. Amend turbotax return Sign up to receive local and national tax news by email. Amend turbotax return Get information on starting and operating a small business. Amend turbotax return Phone. Amend turbotax return Many services are available by phone. Amend turbotax return Ordering forms, instructions, and publications. Amend turbotax return Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. Amend turbotax return You should receive your order within 10 days. Amend turbotax return Asking tax questions. Amend turbotax return Call the IRS with your tax questions at 1-800-829-1040. Amend turbotax return Solving problems. Amend turbotax return You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. Amend turbotax return An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Amend turbotax return Call your local Taxpayer Assistance Center for an appointment. Amend turbotax return To find the number, go to www. Amend turbotax return irs. Amend turbotax return gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Amend turbotax return TTY/TDD equipment. Amend turbotax return If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. Amend turbotax return TeleTax topics. Amend turbotax return Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. Amend turbotax return Refund information. Amend turbotax return To check the status of your refund, call 1-800-829-4477 and press 1 for automated refund information or call 1-800-829-1954. Amend turbotax return Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Amend turbotax return Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. Amend turbotax return Evaluating the quality of our telephone services. Amend turbotax return To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. Amend turbotax return One method is for a second IRS representative to listen in on or record random telephone calls. Amend turbotax return Another is to ask some callers to complete a short survey at the end of the call. Amend turbotax return Walk-in. Amend turbotax return Many products and services are available on a walk-in basis. Amend turbotax return Products. Amend turbotax return You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Amend turbotax return Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Amend turbotax return Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. Amend turbotax return Services. Amend turbotax return You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. Amend turbotax return An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Amend turbotax return If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. Amend turbotax return No appointment is necessary — just walk in. Amend turbotax return If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. Amend turbotax return A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. Amend turbotax return If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment may be requested. Amend turbotax return All other issues will be handled without an appointment. Amend turbotax return To find the number of your local office, go to www. Amend turbotax return irs. Amend turbotax return gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Amend turbotax return Mail. Amend turbotax return You can send your order for forms, instructions, and publications to the address below. Amend turbotax return You should receive a response within 10 days after your request is received. Amend turbotax return Internal Revenue Service 1201 N. Amend turbotax return Mitsubishi Motorway Bloomington, IL 61705-6613 CD/DVD for tax products. Amend turbotax return You can order Publication 1796, IRS Tax Products CD/DVD, and obtain: Current-year forms, instructions, and publications. Amend turbotax return Prior-year forms, instructions, and publications. Amend turbotax return Bonus: Historical Tax Products DVD - Ships with the final release. Amend turbotax return IRS Tax Map: an electronic research tool and finding aid. Amend turbotax return Tax law frequently asked questions (FAQ). Amend turbotax return Tax Topics from the IRS telephone response system. Amend turbotax return Fill-in, print, and save features for most tax forms. Amend turbotax return Internal Revenue Bulletins. Amend turbotax return Toll-free and email technical support. Amend turbotax return The CD/DVD is released twice during the year in January and March. Amend turbotax return Purchase the CD/DVD from National Technical Information Service (NTIS) at www. Amend turbotax return irs. Amend turbotax return gov/cdorders for $35 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD/DVD for $35 (plus a $5 handling fee). Amend turbotax return Price is subject to change. Amend turbotax return CD for small businesses. Amend turbotax return Publication 3207, The Small Business Resource Guide CD, is a must for every small business owner or any taxpayer about to start a business. Amend turbotax return This year's CD includes: Helpful information, such as how to prepare a business plan, find financing for your business, and much more. Amend turbotax return All the business tax forms, instructions, and publications needed to successfully manage a business. Amend turbotax return Tax law changes. Amend turbotax return Tax Map: an electronic research tool and finding aid. Amend turbotax return Web links to various government agencies, business associations, and IRS organizations. Amend turbotax return “Rate the Product” survey—your opportunity to suggest changes for future editions. Amend turbotax return A site map of the CD to help you navigate the pages of the CD with ease. Amend turbotax return An interactive “Teens in Biz” module that gives practical tips for teens about starting their own business, creating a business plan, and filing taxes. Amend turbotax return An updated version of this CD is available each year in early April. Amend turbotax return You can get a free copy by calling 1-800-829-3676 or by visiting www. Amend turbotax return irs. Amend turbotax return gov/smallbiz. Amend turbotax return Prev  Up  Next   Home   More Online Publications
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Understanding your CP03C Notice

You received a tax credit (called the First-Time Homebuyer Credit) for a house you purchased. You may need to file a form to report a change in ownership to the house you purchased.

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Form 2848, Power of Attorney and Declaration of Representative.

Or you may qualify for help from a Low Income Taxpayer Clinic.
 


What you need to do


You may want to...


Answers to Common Questions

How much is the repayment amount?
The repayment amount is equal to the full amount of the credit you received minus any credit repayments you may have already made.

Do I have to repay the credit if my home was is destroyed, condemned, or disposed of under threat of condemnation and I acquired a new home within two years?
You do not have to repay the credit if you purchased a new main home within two years of the event.

How and when do I repay the credit?
You must file a Form 5405, First-Time Homebuyer Credit and Repayment of the Credit with your tax return for the year in which the change occurred. You can report your change in ownership status by checking the appropriate box in Part III (Disposition or Change in Use of Main Home for Which the Credit Was Claimed) of the form.

You have to repay the credit by including it as additional tax on the federal income tax return for the year in which the home stopped being your main home. For example, a taxpayer who reports a change of ownership occurring in 2010 must repay the first-time homebuyer credit, minus any payments they might have made to repay the credit, in their 2010 tax return.

I heard that taxpayers didn't have to repay the First Time Homebuyers Credit any longer. Didn't the law change?
The law changed for home purchases in 2009 and 2010, which now have no 15-year repayment requirement. The law did not change the repayment requirement for purchases for home that cease being a main home.

What if my spouse has died, do I have to repay the entire amount of the credit?
If, unfortunately, a spouse is deceased, the remaining spouse only has to repay half of the remaining credit balance: we won't seek repayment for the deceased spouse's half. For example, the surviving spouse will owe only $3,750 for a $7,500 first-time homebuyer credit taken on an earlier joint income tax return.

What if I don't have to pay any additional tax, do I still have to report the change in my ownership status?
Yes, even if you don't have to pay any additional tax, you still need to complete a Form 5405 to report the disposition of your property.

Page Last Reviewed or Updated: 14-Mar-2014

The Amend Turbotax Return

Amend turbotax return It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors. Amend turbotax return Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors. Amend turbotax return Select the Scenario that Applies to You: Amend turbotax return I am an independent contractor or in business for myself Amend turbotax return If you are a business owner or contractor who provides services to other businesses, then you are generally considered self-employed. For more information on your tax obligations if you are self-employed (an independent contractor), see our Self-Employed Tax Center. Amend turbotax return I hire or contract with individuals to provide services to my business Amend turbotax return If you are a business owner hiring or contracting with other individuals to provide services, you must determine whether the individuals providing services are employees or independent contractors. Follow the rest of this page to find out more about this topic and what your responsibilities are. Amend turbotax return Determining Whether the Individuals Providing Services are Employees or Independent Contractors Amend turbotax return Before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. The person performing the services may be - Amend turbotax return An independent contractor Amend turbotax return An employee (common-law employee) Amend turbotax return A statutory employee Amend turbotax return A statutory nonemployee Amend turbotax return In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered. Amend turbotax return Common Law Rules Amend turbotax return Facts that provide evidence of the degree of control and independence fall into three categories: Amend turbotax return Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job? Amend turbotax return Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.) Amend turbotax return Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business? Amend turbotax return Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another. Amend turbotax return The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination. Amend turbotax return Form SS-8 Amend turbotax return If, after reviewing the three categories of evidence, it is still unclear whether a worker is an employee or an independent contractor, Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding (PDF) can be filed with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker’s status. Amend turbotax return Be aware that it can take at least six months to get a determination, but a business that continually hires the same types of workers to perform particular services may want to consider filing the Form SS-8 (PDF).