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Amended Tax Returns

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Amended Tax Returns

Amended tax returns Publication 51 - Main Content Table of Contents 1. Amended tax returns Taxpayer Identification NumbersWhen you receive your EIN. Amended tax returns Registering for SSNVS. Amended tax returns 2. Amended tax returns Who Are Employees?Crew Leaders Business Owned and Operated by Spouses 3. Amended tax returns Wages and Other Compensation 4. Amended tax returns Social Security and Medicare TaxesThe $150 Test or the $2,500 Test Social Security and Medicare Tax Withholding 5. Amended tax returns Federal Income Tax WithholdingImplementation of lock-in letter. Amended tax returns Seasonal employees and employees not currently performing services. Amended tax returns Termination and re-hire of employees. Amended tax returns How To Figure Federal Income Tax Withholding 6. Amended tax returns Required Notice to Employees About Earned Income Credit (EIC) 7. Amended tax returns Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties Employers of Both Farm and Nonfarm Workers 8. Amended tax returns Form 943 9. Amended tax returns Reporting Adjustments on Form 943Current Year Adjustments Prior Year Adjustments 10. Amended tax returns Federal Unemployment (FUTA) Tax 11. Amended tax returns Reconciling Wage Reporting Forms 13. Amended tax returns Federal Income Tax Withholding MethodsWage Bracket Method Percentage Method Alternative Methods of Federal Income Tax Withholding How To Get Tax Help 1. Amended tax returns Taxpayer Identification Numbers If you are required to withhold any federal income, social security, or Medicare taxes, you will need an employer identification number (EIN) for yourself. Amended tax returns Also, you will need the SSN of each employee and the name of each employee as shown on the employee's social security card. Amended tax returns Employer identification number (EIN). Amended tax returns   An employer identification number (EIN) is a nine-digit number that the IRS issues. Amended tax returns The digits are arranged as follows: 00-0000000. Amended tax returns It is used to identify the tax accounts of employers and certain others who have no employees. Amended tax returns Use your EIN on all of the items that you send to the IRS and SSA. Amended tax returns   If you do not have an EIN, you may apply for one online. Amended tax returns Visit IRS. Amended tax returns gov and click on the Apply for an EIN Online link under Tools. Amended tax returns You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Amended tax returns Do not use a SSN in place of an EIN. Amended tax returns   If you do not have an EIN by the time a return is due, write “Applied For” and the date you applied for it in the space shown for the number. Amended tax returns If you took over another employer's business, do not use that employer's EIN. Amended tax returns   You should have only one EIN. Amended tax returns If you have more than one, and are not sure which one to use, call the toll-free Business and Specialty Tax Line at 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Amended tax returns Provide the EINs that you have, the name and address to which each number was assigned, and the address of your principal place of business. Amended tax returns The IRS will tell you which EIN to use. Amended tax returns   For more information, see Publication 1635 or Publication 583. Amended tax returns When you receive your EIN. Amended tax returns   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in the Electronic Federal Tax Payment System (EFTPS). Amended tax returns You will receive information in your Employer Identification Number (EIN) Package about Express Enrollment and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. Amended tax returns Call the toll-free number located in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your employment tax deposits. Amended tax returns If you outsource any of your payroll and related tax duties to a third party payer, such as a payroll service provider or reporting agent, be sure to tell them about your EFTPS enrollment. Amended tax returns Social security number (SSN). Amended tax returns   An employee's social security number (SSN) consists of nine digits arranged as follows: 000-00-0000. Amended tax returns You must obtain each employee's name and SSN as shown on the employee's social security card because you must enter them on Form W-2. Amended tax returns Do not accept a social security card that says “Not valid for employment. Amended tax returns ” A social security number issued with this legend does not permit employment. Amended tax returns You may, but are not required to, photocopy the social security card if the employee provides it. Amended tax returns If you do not show the employee's correct name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. Amended tax returns See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs. Amended tax returns Applying for a social security card. Amended tax returns   Any employee who is legally eligible to work in the United States and does not have a social security card can get one by completing Form SS-5, Application for a Social Security Card, and submitting the necessary documentation to SSA. Amended tax returns You can get Form SS-5 at SSA offices, by calling 1-800-772-1213 or 1-800-325-0778 (TTY), or from the SSA website at www. Amended tax returns socialsecurity. Amended tax returns gov/online/ss-5. Amended tax returns html. Amended tax returns The employee must complete and sign Form SS-5; it cannot be filed by the employer. Amended tax returns You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed. Amended tax returns Applying for a social security number. Amended tax returns   If you file Form W-2 on paper and your employee has applied for an SSN but does not have one when you must file Form W-2, enter “Applied For” on the form. Amended tax returns If you are filing electronically, enter all zeros (000-00-0000) in the social security number field. Amended tax returns When the employee receives the SSN, file Copy A of Form W-2c, Corrected Wage and Tax Statement, with the SSA to show the employee's SSN. Amended tax returns Furnish Copies B, C, and 2 of Form W-2c to the employee. Amended tax returns Up to 25 Forms W-2c per Form W-3c, Transmittal of Corrected Wage and Tax Statements, may be filed per session over the Internet, with no limit on the number of sessions. Amended tax returns For more information, visit SSA's Employer W-2 Filing Instructions & Information webpage at www. Amended tax returns socialsecurity. Amended tax returns gov/employer. Amended tax returns Advise your employee to correct the SSN on his or her original Form W-2. Amended tax returns Correctly record the employee's name and SSN. Amended tax returns   Record the name and number of each employee as they are shown on the employee's social security card. Amended tax returns If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. Amended tax returns Continue to report the employee's wages under the old name until the employee shows you an updated social security card with the new name. Amended tax returns   If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported on the most recently filed Form W-2. Amended tax returns It is not necessary to correct other years if the previous name and SSN were used for years before the most recent Form W-2. Amended tax returns IRS individual taxpayer identification numbers (ITINs) for aliens. Amended tax returns   Do not accept an ITIN in place of an SSN for employee identification or for work. Amended tax returns An ITIN is issued for use by resident and nonresident aliens who need identification for tax purposes, but who are not eligible for U. Amended tax returns S. Amended tax returns employment. Amended tax returns The ITIN is a nine-digit number formatted like an SSN (for example, NNN-NN-NNNN). Amended tax returns However, it begins with the number “9” and has either a “7” or “8” as the fourth digit (for example, 9NN-7N-NNNN or 9NN-8N-NNNN). Amended tax returns    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. Amended tax returns If the individual is currently eligible to work in the United States, instruct the individual to apply for an SSN and follow the instructions under Applying for a social security number, earlier in this section. Amended tax returns Do not use an ITIN in place of an SSN on Form W-2. Amended tax returns Verification of social security numbers. Amended tax returns   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 employee names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive results the next business day. Amended tax returns Visit www. Amended tax returns socialsecurity. Amended tax returns gov/employer/ssnv. Amended tax returns htm for more information. Amended tax returns Registering for SSNVS. Amended tax returns   You must register online and receive authorization from your employer to use SSNVS. Amended tax returns To register, visit SSA's website at www. Amended tax returns socialsecurity. Amended tax returns gov/employer and click on the Business Services Online link. Amended tax returns Follow the registration instructions to obtain a user identification (ID) and password. Amended tax returns You will need to provide the following information about yourself and your company. Amended tax returns Name. Amended tax returns SSN. Amended tax returns Date of birth. Amended tax returns Type of employer. Amended tax returns EIN. Amended tax returns Company name, address, and telephone number. Amended tax returns Email address. Amended tax returns When you have completed the online registration process, SSA will mail a one-time activation code to your employer. Amended tax returns You must enter the activation code online to use SSNVS. Amended tax returns 2. Amended tax returns Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. Amended tax returns See Publication 15-A for details on statutory employees and nonemployees. Amended tax returns Employee status under common law. Amended tax returns   Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. Amended tax returns This is so even when you give the employee freedom of action. Amended tax returns What matters is that you have the right to control the details of how the services are performed. Amended tax returns See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Amended tax returns If an employer-employee relationship exists, it does not matter what it is called. Amended tax returns The employee may be called an agent or independent contractor. Amended tax returns It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. Amended tax returns You are responsible for withholding and paying employment taxes for your employees. Amended tax returns You are also required to file employment tax returns. Amended tax returns These requirements do not apply to amounts that you pay to independent contractors. Amended tax returns The rules discussed in this publication apply only to workers who are your employees. Amended tax returns In general, you are an employer of farmworkers if your employees: Raise or harvest agricultural or horticultural products on your farm (including the raising and feeding of livestock); Work in connection with the operation, management, conservation, improvement, or maintenance of your farm and its tools and equipment; Provide services relating to salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor); Handle, process, or package any agricultural or horticultural commodity if you produced over half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity); or Do work for you related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. Amended tax returns For this purpose, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, as well as plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards. Amended tax returns Farmwork does not include reselling activities that do not involve any substantial activity of raising agricultural or horticultural commodities, such as a retail store or a greenhouse used primarily for display or storage. Amended tax returns The table in section 12, How Do Employment Taxes Apply to Farmwork , distinguishes between farm and nonfarm activities, and also addresses rules that apply in special situations. Amended tax returns Crew Leaders If you are a crew leader, you are an employer of farmworkers. Amended tax returns A crew leader is a person who furnishes and pays (either on his or her own behalf or on behalf of the farm operator) workers to do farmwork for the farm operator. Amended tax returns If there is no written agreement between you and the farm operator stating that you are his or her employee and if you pay the workers (either for yourself or for the farm operator), then you are a crew leader. Amended tax returns For FUTA tax rules, see section 10. Amended tax returns Business Owned and Operated by Spouses If you and your spouse jointly own and operate a farm or nonfarm business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Amended tax returns See Publication 541, Partnerships, for more details. Amended tax returns The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. Amended tax returns Exception—Qualified joint venture. Amended tax returns   For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are spouses filing a joint income tax return, can elect not to be treated as a partnership for federal tax purposes. Amended tax returns A qualified joint venture conducts a trade or business where: The only members of the joint venture are spouses who file a joint income tax return, Both spouses materially participate (see Material participation in the Instructions for Schedule C (Form 1040), line G) in the trade or business (mere joint ownership of property is not enough), Both spouses elect to not be treated as a partnership, and The business is co-owned by both spouses and is not held in the name of a state law entity such as a partnership or limited liability company (LLC). Amended tax returns   To make the election, all items of income, gain, loss, deduction, and credit must be divided between the spouses, in accordance with each spouse's interest in the venture, and reported on separate Schedules C or F as sole proprietors. Amended tax returns Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. Amended tax returns   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. Amended tax returns If employment taxes are owed by the qualified joint venture, either spouse may report and pay the employment taxes due on the wages paid to the employees using the EIN of that spouse's sole proprietorship. Amended tax returns Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. Amended tax returns However, it gives each spouse credit for social security earnings on which retirement benefits are based and for Medicare coverage without filing a partnership return. Amended tax returns    Note. Amended tax returns If your spouse is your employee, not your partner, you must pay social security and Medicare taxes for him or her. Amended tax returns   For more information on qualified joint ventures, visit IRS. Amended tax returns gov and enter “qualified joint venture” in the search box. Amended tax returns Exception—Community income. Amended tax returns   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. Amended tax returns S. Amended tax returns possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. Amended tax returns You may still make an election to be taxed as a qualified joint venture instead of a partnership. Amended tax returns See Exception—Qualified joint venture , earlier in this section. Amended tax returns 3. Amended tax returns Wages and Other Compensation Cash wages that you pay to employees for farmwork are generally subject to social security tax and Medicare tax. Amended tax returns You may also be required to withhold, deposit, and report Additional Medicare Tax. Amended tax returns See section 4 for more information. Amended tax returns If the wages are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. Amended tax returns You may also be liable for FUTA tax, which is not withheld by you or paid by the employee. Amended tax returns FUTA tax is discussed in section 10. Amended tax returns Cash wages include checks, money orders, etc. Amended tax returns Do not count as cash wages the value of food, lodging, and other noncash items. Amended tax returns For more information on what payments are considered taxable wages, see Publication 15 (Circular E). Amended tax returns Commodity wages. Amended tax returns   Commodity wages are not cash and are not subject to social security and Medicare taxes or federal income tax withholding. Amended tax returns However, noncash payments, including commodity wages, are treated as cash wages (see above) if the substance of the transaction is a cash payment. Amended tax returns These noncash payments are subject to social security and Medicare taxes and federal income tax withholding. Amended tax returns Other compensation. Amended tax returns   Publications 15-A and 15-B discuss other forms of compensation that may be taxable. Amended tax returns Family members. Amended tax returns   Generally, the wages that you pay to family members who are your employees are subject to social security and Medicare taxes, federal income tax withholding, and FUTA tax. Amended tax returns However, certain exemptions may apply for your child, spouse, or parent. Amended tax returns See the table, How Do Employment Taxes Apply to Farmwork , in section 12. Amended tax returns Household employees. Amended tax returns   The wages of an employee who performs household services, such as a maid, babysitter, gardener, or cook, in your home are not subject to social security and Medicare taxes if you pay that employee cash wages of less than $1,900 in 2014. Amended tax returns   Social security and Medicare taxes do not apply to cash wages for housework in your private home if it was done by your spouse or your child under age 21. Amended tax returns Nor do the taxes apply to housework done by your parent unless: You have a child living in your home who is under age 18 or has a physical or mental condition that requires care by an adult for at least 4 continuous weeks in a calendar quarter, and You are a widow or widower, or divorced and not remarried, or have a spouse in the home who, because of a physical or mental condition, cannot care for your child for at least 4 continuous weeks in the quarter. Amended tax returns   For more information, see Publication 926, Household Employer's Tax Guide. Amended tax returns    Wages for household work may not be a deductible farm expense. Amended tax returns See Publication 225, Farmer's Tax Guide. Amended tax returns Share farmers. Amended tax returns   You do not have to withhold or pay social security and Medicare taxes on amounts paid to share farmers under share-farming arrangements. Amended tax returns Compensation paid to H-2A visa holders. Amended tax returns   Report compensation of $600 or more paid to foreign agricultural workers who entered the country on H-2A visas in box 1 of Form W-2 but do not report it as social security wages (box 3) or Medicare wages (box 5) on Form W-2 because compensation paid to H-2A workers for agricultural labor performed in connection with this visa is not subject to social security and Medicare taxes. Amended tax returns On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. Amended tax returns   An employer is not required to withhold federal income tax from compensation it pays an H-2A worker for agricultural labor performed in connection with this visa unless the worker asks for withholding and the employer agrees. Amended tax returns In that case, the worker must give the employer a completed Form W-4. Amended tax returns Federal income tax withheld should be reported in box 2 of Form W-2. Amended tax returns These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. Amended tax returns For rules relating to backup withholding and reporting when the H-2A worker does not provide a TIN, see the Instructions for Form 1099-MISC and the Instructions for Form 945. Amended tax returns 4. Amended tax returns Social Security and Medicare Taxes Generally, you must withhold social security and Medicare taxes on all cash wage payments that you make to your employees. Amended tax returns You may also be required to withhold Additional Medicare Tax. Amended tax returns For more information, see Additional Medicare Tax withholding , later. Amended tax returns The $150 Test or the $2,500 Test All cash wages that you pay to an employee during the year for farmwork are subject to social security and Medicare taxes and federal income tax withholding if either of the two tests below is met. Amended tax returns You pay cash wages to an employee of $150 or more in a year for farmwork (count all cash wages paid on a time, piecework, or other basis). Amended tax returns The $150 test applies separately to each farmworker that you employ. Amended tax returns If you employ a family of workers, each member is treated separately. Amended tax returns Do not count wages paid by other employers. Amended tax returns The total that you pay for farmwork (cash and noncash) to all your employees is $2,500 or more during the year. Amended tax returns Exceptions. Amended tax returns   The $150 and $2,500 tests do not apply to wages that you pay to a farmworker who receives less than $150 in annual cash wages and the wages are not subject to social security and Medicare taxes, or federal income tax withholding, even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker: Is employed in agriculture as a hand-harvest laborer, Is paid piece rates in an operation that is usually paid on a piece-rate basis in the region of employment, Commutes daily from his or her permanent home to the farm, and Had been employed in agriculture less than 13 weeks in the preceding calendar year. Amended tax returns   Amounts that you pay to these seasonal farmworkers, however, count toward the $2,500-or-more test to determine whether wages that you pay to other farmworkers are subject to social security and Medicare taxes. Amended tax returns Social Security and Medicare Tax Withholding The social security tax rate is 6. Amended tax returns 2%, for both the employee and employer, on the first $117,000 paid to each employee. Amended tax returns You must withhold at this rate from each employee and pay a matching amount. Amended tax returns The Medicare tax rate is 1. Amended tax returns 45% each for the employee and employer on all wages. Amended tax returns You must withhold at this rate from each employee and pay a matching amount. Amended tax returns There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. Amended tax returns Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. Amended tax returns For details, see Publication 15-A. Amended tax returns Additional Medicare Tax withholding. Amended tax returns   In addition to withholding Medicare tax at 1. Amended tax returns 45%, you must withhold a 0. Amended tax returns 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Amended tax returns You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Amended tax returns Additional Medicare Tax is only imposed on the employee. Amended tax returns There is no employer share of Additional Medicare Tax. Amended tax returns All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Amended tax returns   For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E). Amended tax returns For more information on Additional Medicare Tax, visit IRS. Amended tax returns gov and enter “Additional Medicare Tax” in the search box. Amended tax returns Employee share paid by employer. Amended tax returns   If you would rather pay a household or agricultural employee's share of the social security and Medicare taxes without withholding them from his or her wages, you may do so. Amended tax returns If you do not withhold the taxes, however, you must still pay them. Amended tax returns Any employee social security and Medicare taxes that you pay is additional income to the employee. Amended tax returns Include it in box 1 of the employee's Form W-2, but do not count it as social security and Medicare wages and do not include it in boxes 3 and 5. Amended tax returns Also, do not count the additional income as wages for FUTA tax purposes. Amended tax returns Different rules apply to employer payments of social security and Medicare taxes for non-household and non-agricultural employees. Amended tax returns See section 7 of Publication 15-A. Amended tax returns Withholding social security and Medicare taxes on nonresident alien employees. Amended tax returns   In general, if you pay wages to nonresident alien employees, you must withhold social security and Medicare taxes as you would for a U. Amended tax returns S. Amended tax returns citizen or resident alien. Amended tax returns However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. Amended tax returns Also see Compensation paid to H-2A visa holders in section 3. Amended tax returns Religious exemption. Amended tax returns    An exemption from social security and Medicare taxes is available to members of a recognized religious sect opposed to public insurance. Amended tax returns This exemption is available only if both the employee and the employer are members of the sect. Amended tax returns   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Amended tax returns 5. Amended tax returns Federal Income Tax Withholding Farmers and crew leaders must withhold federal income tax from the wages of farmworkers if the wages are subject to social security and Medicare taxes. Amended tax returns The amount to withhold is figured on gross wages before taking out social security and Medicare taxes, union dues, insurance, etc. Amended tax returns You may use one of several methods to determine the amount of federal income tax withholding. Amended tax returns They are discussed in section 13. Amended tax returns Form W-4. Amended tax returns   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. Amended tax returns Encourage your employees to file an updated Form W-4 for 2014, especially if they owed taxes or received a large refund when filing their 2013 tax return. Amended tax returns Advise your employees to use the IRS Withholding Calculator on the IRS website at www. Amended tax returns irs. Amended tax returns gov/individuals for help in determining how many withholding allowances to claim on their Form W-4. Amended tax returns   Ask each new employee to give you a signed Form W-4 when starting work. Amended tax returns Make the form effective with the first wage payment. Amended tax returns If a new employee does not give you a completed Form W-4, withhold tax as if he or she is single, with no withholding allowances. Amended tax returns Forms in Spanish. Amended tax returns   You can provide Formulario W-4(SP) in place of Form W-4 to your Spanish-speaking employees. Amended tax returns For more information, see Publicación 17(SP). Amended tax returns Effective date of Form W-4. Amended tax returns   A Form W-4 remains in effect until the employee gives you a new one. Amended tax returns When you receive a new Form W-4, do not adjust withholding for pay periods before the effective date of the new form. Amended tax returns Do not adjust withholding retroactively. Amended tax returns If an employee gives you a replacement Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date when you received the replacement Form W-4. Amended tax returns For exceptions, see Exemption from federal income tax withholding , IRS review of requested Forms W-4 , and Invalid Forms W-4 , later in this section. Amended tax returns A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. Amended tax returns Completing Form W-4. Amended tax returns   The amount of federal income tax withholding is based on marital status and withholding allowances. Amended tax returns Your employees may not base their withholding amounts on a fixed dollar amount or percentage. Amended tax returns However, the employee may specify a dollar amount to be withheld in addition to the amount of withholding based on filing status and withholding allowances claimed on Form W-4. Amended tax returns   Employees may claim fewer withholding allowances than they are entitled to claim. Amended tax returns They may do this to ensure that they have enough withholding or to offset other sources of taxable income that are not subject to withholding. Amended tax returns   See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. Amended tax returns Along with Form W-4, you may wish to order Publication 505 for use by your employees. Amended tax returns    Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. Amended tax returns If an employee wants additional withholding, he or she should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES, Estimated Tax for Individuals, or by using the Electronic Federal Tax Payment System (EFTPS) to make estimated tax payments. Amended tax returns Exemption from federal income tax withholding. Amended tax returns   Generally, an employee may claim exemption from federal income tax withholding because he or she had no federal income tax liability last year and expects none this year. Amended tax returns See the Form W-4 instructions for more information. Amended tax returns However, the wages are still subject to social security and Medicare taxes. Amended tax returns   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. Amended tax returns To continue to be exempt from withholding in the next calendar year, an employee must give you a new Form W-4 by February 15. Amended tax returns If the employee does not give you a new Form W-4 by February 15, withhold tax based on the last valid Form W-4 you have for the employee that did not claim an exemption from withholding or, if one does not exist, withhold as if he or she is single with zero withholding allowances. Amended tax returns If the employee provides a new Form W-4 claiming an exemption from withholding on February 16 or later, you may apply the exemption to future wages, but do not refund taxes withheld while the exempt status was not in place. Amended tax returns Withholding income taxes on the wages of nonresident alien employees. Amended tax returns   In general, you must withhold federal income taxes on the wages of nonresident alien employees. Amended tax returns However, see Publication 515 for exceptions to this general rule. Amended tax returns Also see Compensation paid to H-2A visa workers in section 3. Amended tax returns Withholding adjustment for nonresident alien employees. Amended tax returns   A special procedure applies for figuring the amount of income tax to withhold from wages of nonresident alien employees performing services within the United States for wages paid in 2014. Amended tax returns This procedure requires a special chart to be used with the withholding tables to determine the amount to withhold from the wages of the nonresident alien employee. Amended tax returns See Withholding adjustment for nonresident alien employees in section 9 of Publication 15 (Circular E). Amended tax returns Nonresident alien employee's Form W-4. Amended tax returns   When completing Forms W-4, nonresident aliens are required to: Not claim exemption from income tax withholding; Request withholding as if they are single, regardless of their actual marital status; Claim only one allowance (if the nonresident alien is a resident of Canada, Mexico, or Korea, he or she may claim more than one allowance); and Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4. Amended tax returns   If you maintain an electronic Form W-4 system, you should provide a field for nonresident alien employees to enter nonresident alien status in lieu of writing “Nonresident Alien” or “NRA” above the dotted line on line 6. Amended tax returns    A nonresident alien employee may request additional withholding at his or her option for other purposes, although such additions should not be necessary for withholding to cover federal income tax liability related to employment. Amended tax returns Form 8233. Amended tax returns   If a nonresident alien employee claims a tax treaty exemption from withholding, the employee must submit Form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with respect to the income exempt under the treaty, instead of Form W-4. Amended tax returns See Publication 515 for details. Amended tax returns IRS review of requested Forms W-4. Amended tax returns   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. Amended tax returns You may also be directed to send certain Forms W-4 to the IRS. Amended tax returns You may receive a notice from the IRS requiring you to submit a copy of Form W-4 for one or more of your named employees. Amended tax returns Send the requested copy or copies of Form W-4 to the IRS at the address provided and in the manner directed by the notice. Amended tax returns The IRS may also require you to submit copies of Form W-4 to the IRS as directed by a revenue procedure or notice published in the Internal Revenue Bulletin. Amended tax returns When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. Amended tax returns   After submitting a copy of the requested Form W-4 to the IRS, continue to withhold federal income tax based on that Form W-4 if it is valid (see Invalid Forms W-4 , later in this section). Amended tax returns However, if the IRS later notifies you in writing that the employee is not entitled to claim a complete exemption from withholding or more than the maximum number of withholding allowances specified by the IRS in the written notice, withhold federal income tax based on the effective date, marital status, and maximum number of withholding allowances specified in the notice (commonly referred to as a “lock-in letter”). Amended tax returns Initial lock-in letter. Amended tax returns   The IRS uses information reported on Form W-2 to identify employees with withholding compliance problems. Amended tax returns In some cases, where a serious under-withholding problem is found to exist for a particular employee, the IRS may issue a lock-in letter to the employer specifying the maximum number of withholding allowances and marital status permitted for a specific employee. Amended tax returns You will also receive a copy for the employee that identifies the maximum number of withholding allowances permitted and the process by which the employee can provide additional information to the IRS for purposes of determining the appropriate number of withholding allowances. Amended tax returns If the employee is employed by you as of the date of the notice, you must furnish the employee copy to the employee within 10 business days of receipt. Amended tax returns You may follow any reasonable business practice to furnish the employee copy to the employee. Amended tax returns Implementation of lock-in letter. Amended tax returns   When you receive the notice specifying the maximum number of withholding allowances and marital status permitted, you may not withhold immediately on the basis of the notice. Amended tax returns You must begin withholding tax on the basis of the notice for any wages paid after the date specified in the notice. Amended tax returns The delay between your receipt of the notice and the date to begin the withholding on the basis of the notice permits the employee to contact the IRS. Amended tax returns Seasonal employees and employees not currently performing services. Amended tax returns   If you receive a notice for an employee who is not currently performing services for you, you are still required to furnish the employee copy to the employee and withhold based on the notice if any of the following apply. Amended tax returns You are paying wages for the employee's prior services and the wages are subject to income tax withholding on or after the date specified in the notice. Amended tax returns You reasonably expect the employee to resume services within 12 months of the date of the notice. Amended tax returns The employee is on a bona fide leave of absence that does not exceed 12 months or the employee has a right to reemployment after the leave of absence. Amended tax returns Termination and re-hire of employees. Amended tax returns   If you are required to furnish and withhold based on the notice and the employment relationship is terminated after the date of the notice, you must continue to withhold based on the notice if you continue to pay any wages subject to income tax withholding. Amended tax returns You must also withhold based on the notice or modification notice (explained next) if the employee resumes the employment relationship with you within 12 months after the termination of the employment relationship. Amended tax returns Modification notice. Amended tax returns   After issuing the notice specifying the maximum number of withholding allowances and marital status permitted, the IRS may issue a subsequent notice (modification notice) that modifies the original notice. Amended tax returns The modification notice may change the marital status and/or the number of withholding allowances permitted. Amended tax returns You must withhold federal income tax based on the effective date specified in the modification notice. Amended tax returns New Form W-4 after IRS notice. Amended tax returns   After the IRS issues a notice or modification notice, if the employee provides you with a new Form W-4 claiming complete exemption from withholding or claims a marital status, a number of withholding allowances, and any additional withholding that results in less withholding than would result under the IRS notice or modification notice, you must disregard the new Form W-4. Amended tax returns You are required to withhold on the basis of the notice or modification notice unless the IRS subsequently notifies you to withhold based on the new Form W-4. Amended tax returns If the employee wants to put a new Form W-4 into effect that results in less withholding than required, the employee must contact the IRS. Amended tax returns   If, after you receive an IRS notice or modification notice, your employee provides you with a new Form W-4 that does not claim exemption from federal income tax withholding and claims a marital status, a number of withholding allowances, and any additional withholding that results in more withholding than would result under the notice or modification notice, you must withhold tax on the basis of that new Form W-4. Amended tax returns Otherwise, disregard any subsequent Forms W-4 provided by the employee and withhold based on the IRS notice or modification notice. Amended tax returns Substitute Forms W-4. Amended tax returns   You are encouraged to have your employees use the official version of Form W-4 to claim withholding allowances or exemption from withholding. Amended tax returns Call the IRS at 1-800-TAX-FORM (1-800-829-3676) or visit IRS. Amended tax returns gov to obtain copies of Form W-4. Amended tax returns   You may use a substitute version of Form W-4 to meet your business needs. Amended tax returns However, your substitute Form W-4 must contain language that is identical to the official Form W-4 and your form must meet all current IRS rules for substitute forms. Amended tax returns At the time that you provide your substitute form to the employee, you must provide him or her with all tables, instructions, and worksheets from the current Form W-4. Amended tax returns   You cannot accept a substitute Form W-4 developed by an employee, and the employee submitting such form will be treated as failing to furnish a Form W-4. Amended tax returns However, continue to use any valid Forms W-4 developed by your employees that you accepted before October 11, 2007. Amended tax returns Invalid Forms W-4. Amended tax returns   Any unauthorized change or addition to Form W-4 makes it invalid. Amended tax returns This includes taking out any language by which the employee certifies that the form is correct. Amended tax returns A Form W-4 is also invalid if, by the date an employee gives it to you, he or she indicates in any way that it is false. Amended tax returns An employee who submits a false Form W-4 may be subject to a $500 penalty. Amended tax returns You may treat a Form W-4 as invalid if the employee wrote “exempt” on line 7 and also entered a number on line 5 or an amount on line 6. Amended tax returns   When you get an invalid Form W-4, do not use it to figure federal income tax withholding. Amended tax returns Tell the employee that it is invalid and ask for another one. Amended tax returns If the employee does not give you a valid one, withhold taxes as if the employee was single and claiming no withholding allowances. Amended tax returns However, if you have an earlier Form W-4 for this worker that is valid, withhold as you did before. Amended tax returns   For additional information about these rules, see Treasury Decision 9337, 2007-35 I. Amended tax returns R. Amended tax returns B. Amended tax returns 455, available at www. Amended tax returns irs. Amended tax returns gov/irb/2007-35_IRB/ar10. Amended tax returns html. Amended tax returns Amounts exempt from levy on wages, salary, and other income. Amended tax returns   If you receive a Notice of Levy on Wages, Salary, and Other Income—Forms 668-W(ACS), 668-W(c)(DO), or 668-W(ICS), you must withhold amounts as described in the instructions for these forms. Amended tax returns Publication 1494, Tables for Figuring Amount Exempt From Levy on Wages, Salary, and Other Income—Forms 668-W(ACS), 668-W(c)(DO), and 668-W(ICS), shows the exempt amount. Amended tax returns If a levy issued in a prior year is still in effect and the taxpayer submits a new Statement of Exemptions and Filing Status, use the current year Publication 1494 to compute the exempt amount. Amended tax returns How To Figure Federal Income Tax Withholding There are several ways to figure federal income tax withholding. Amended tax returns Wage bracket tables. Amended tax returns See section 13 for directions on how to use the tables. Amended tax returns Percentage method. Amended tax returns See section 13 for directions on how to use the percentage method. Amended tax returns Alternative formula tables for percentage method withholding. Amended tax returns See Publication 15-A. Amended tax returns Wage bracket percentage method withholding tables. Amended tax returns See Publication 15-A. Amended tax returns Other alternative methods. Amended tax returns See Publication 15-A. Amended tax returns Employers with automated payroll systems will find the two alternative formula tables and the two alternative wage bracket percentage method tables in Publication 15-A useful. Amended tax returns If an employee wants additional federal tax withheld, have the employee show the extra amount on Form W-4. Amended tax returns Supplemental wages. Amended tax returns   Supplemental wages are wage payments to an employee that are not regular wages. Amended tax returns They include, but are not limited to, bonuses, commissions, overtime pay, accumulated sick leave, severance pay, awards, prizes, back pay and retroactive pay increases for current employees, and payments for nondeductible moving expenses. Amended tax returns Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. Amended tax returns   If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total was a single payment for a regular payroll period. Amended tax returns   If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold federal income tax from your employee's regular wages. Amended tax returns If you withheld federal income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages. Amended tax returns Withhold a flat 25% (no other percentage allowed). Amended tax returns If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. Amended tax returns If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. Amended tax returns Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. Amended tax returns Subtract the tax withheld from the regular wages. Amended tax returns Withhold the remaining tax from the supplemental wages. Amended tax returns If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and previous supplemental wage payments, and withhold the remaining tax from the current payment of supplemental wages. Amended tax returns If you did not withhold federal income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b above. Amended tax returns This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. Amended tax returns    Separate rules apply to any supplemental wages exceeding $1 million that you pay to an individual during the year. Amended tax returns See section 7 in Publication 15 (Circular E) for details. Amended tax returns   Regardless of the method that you use to withhold federal income tax on supplemental wages, they are generally subject to social security, Medicare, and FUTA taxes. Amended tax returns 6. Amended tax returns Required Notice to Employees About Earned Income Credit (EIC) You must notify employees who have no federal income tax withheld that they may be able to claim a tax refund because of the EIC. Amended tax returns Although you do not have to notify employees who claim exemption from withholding on Form W-4 about the EIC, you are encouraged to notify any employees whose wages for 2013 were less than $46,227 ($51,567 if married filing jointly) that they may be eligible to claim the credit for 2013. Amended tax returns This is because eligible employees may get a refund of the amount of EIC that is more than the tax that they owe. Amended tax returns You will meet the notification requirement if you issue to the employee Form W-2 with the EIC notice on the back of Copy B, or a substitute Form W-2 with the same statement. Amended tax returns You may also meet the requirement by providing Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC), or your own statement that contains the same wording. Amended tax returns If a substitute Form W-2 is given to the employee on time but does not have the required statement, you must notify the employee within 1 week of the date that the substitute Form W-2 is given. Amended tax returns If Form W-2 is required but is not given on time, you must give the employee Notice 797 or your written statement by the date that Form W-2 is required to be given. Amended tax returns If Form W-2 is not required, you must notify the employee by February 7, 2014. Amended tax returns 7. Amended tax returns Depositing Taxes Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld. Amended tax returns You must use electronic funds transfer to make all federal tax deposits. Amended tax returns See How To Deposit , later in this section. Amended tax returns The credit against employment taxes for COBRA premium assistance payments is treated as a deposit of taxes on the first day of your return period. Amended tax returns For more information, see COBRA premium assistance credit under Introduction. Amended tax returns Payment with return. Amended tax returns   You may make payments with Forms 943 or 945 instead of depositing if one of the following applies. Amended tax returns You report less than a $2,500 tax liability for the year (Form 943, line 11; Form 945, line 3) and you pay in full with a return that is filed on time. Amended tax returns However, if you are unsure that you will report less than $2,500, deposit under the rules explained in this section so that you will not be subject to failure-to-deposit penalties. Amended tax returns You are a monthly schedule depositor and make a payment in accordance with the Accuracy of Deposits Rule discussed later in this section. Amended tax returns This payment may be $2,500 or more. Amended tax returns Only monthly schedule depositors, defined later, are allowed to make an Accuracy of Deposits Rule payment with the return. Amended tax returns Semiweekly schedule depositors must timely deposit the amount. Amended tax returns See Accuracy of Deposits Rule and How To Deposit, later in this section. Amended tax returns When To Deposit If you employ both farm and nonfarm workers, do not combine the taxes reportable on Forms 941 or 944 with Form 943 to decide whether to make a deposit. Amended tax returns See Employers of Both Farm and Nonfarm Workers, later in this section. Amended tax returns The rules for determining when to deposit Form 943 taxes are discussed below. Amended tax returns See section 10 for the separate rules that apply to FUTA tax. Amended tax returns Under these rules, you are classified as either a monthly schedule depositor or a semiweekly schedule depositor. Amended tax returns The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often your business pays its employees or how often you are required to make deposits. Amended tax returns The terms identify which set of rules you must follow when you incur a tax liability (for example, when you have a payday). Amended tax returns The deposit schedule that you must use for a calendar year is determined from the tax liability reported on your Form 943, line 9, for the lookback period, discussed next. Amended tax returns If you reported $50,000 or less of Form 943 taxes for the lookback period, you are a monthly schedule depositor. Amended tax returns If you reported more than $50,000 of Form 943 taxes for the lookback period, you are a semiweekly schedule depositor. Amended tax returns Lookback period. Amended tax returns   The lookback period is the second calendar year preceding the current calendar year. Amended tax returns For example, the lookback period for 2014 is 2012. Amended tax returns Example of deposit schedule based on lookback period. Amended tax returns Rose Co. Amended tax returns reported taxes on Form 943 as follows. Amended tax returns 2012 — $48,000 2013 — $60,000 Rose Co. Amended tax returns is a monthly schedule depositor for 2014 because its taxes for the lookback period ($48,000 for calendar year 2012) were not more than $50,000. Amended tax returns However, for 2015, Rose Co. Amended tax returns is a semiweekly schedule depositor because the total taxes before adjustment for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. Amended tax returns Adjustments to lookback period taxes. Amended tax returns   To determine your taxes for the lookback period, use only the tax that you reported on the original return (Form 943, line 9). Amended tax returns Do not include adjustments shown on Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. Amended tax returns Example of adjustments. Amended tax returns An employer originally reported total tax of $45,000 for the lookback period in 2012. Amended tax returns The employer discovered during March 2014 that the tax reported for the lookback period was understated by $10,000 and corrected this error by filing Form 943-X. Amended tax returns The total tax reported in the lookback period is still $45,000. Amended tax returns The $10,000 adjustment is also not treated as part of the 2014 taxes. Amended tax returns Deposit period. Amended tax returns   The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. Amended tax returns For monthly schedule depositors, the deposit period is a calendar month. Amended tax returns The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. Amended tax returns Monthly Deposit Schedule If the tax liability reported on Form 943, line 9, for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. Amended tax returns You must deposit Form 943 taxes on payments made during a calendar month by the 15th day of the following month. Amended tax returns Monthly schedule example. Amended tax returns   Red Co. Amended tax returns is a seasonal employer and a monthly schedule depositor. Amended tax returns It pays wages each Friday. Amended tax returns It paid wages during August 2014, but did not pay any wages during September. Amended tax returns Red Co. Amended tax returns must deposit the combined tax liabilities for the August paydays by September 15. Amended tax returns Red Co. Amended tax returns does not have a deposit requirement for September (that is, due by October 15, 2014) because no wages were paid in September; therefore, it did not have a tax liability for September. Amended tax returns New employers. Amended tax returns   For agricultural employers, your tax liability for any year in the lookback period before the date you started or acquired your business is considered to be zero. Amended tax returns Therefore, you are a monthly schedule depositor for the first and second calendar years of your agricultural business (but see the $100,000 Next-Day Deposit Rule , later in this section). Amended tax returns Semiweekly Deposit Schedule You are a semiweekly schedule depositor for a calendar year if the tax liability on Form 943, line 9, during your lookback period was more than $50,000. Amended tax returns Under the semiweekly deposit schedule, deposit Form 943 taxes for payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. Amended tax returns Deposit amounts accumulated for payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. Amended tax returns Semiweekly depositors are not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule (discussed later in this section) applies. Amended tax returns For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 by the following Wednesday. Amended tax returns If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. Amended tax returns Semiweekly schedule depositors must complete Form 943-A, Agricultural Employer's Record of Federal Tax Liability, and submit it with Form 943. Amended tax returns Semiweekly Deposit Schedule IF the payday falls on a. Amended tax returns . Amended tax returns . Amended tax returns THEN deposit taxes by the following. Amended tax returns . Amended tax returns . Amended tax returns Wednesday, Thursday, and/or Friday Wednesday Saturday, Sunday, Monday, and/or Tuesday Friday Semiweekly schedule example. Amended tax returns   Green, Inc. Amended tax returns , is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. Amended tax returns Green, Inc. Amended tax returns , will deposit only once a month, but the deposit will be made under the semiweekly deposit schedule as follows. Amended tax returns Green, Inc. Amended tax returns 's tax liability for the April 25, 2014 (Friday), wage payment must be deposited by April 30, 2014 (Wednesday). Amended tax returns Semiweekly deposit period spanning two quarters. Amended tax returns   If you have more than one pay date during a semiweekly period and the pay dates fall in different calendar quarters, you will need to make separate deposits for the separate liabilities. Amended tax returns For example, if you have a pay date on Monday, March 31, 2014 (first quarter), and another pay date on Tuesday, April 1, 2014 (second quarter), two separate deposits will be required even though the pay dates fall within the same semiweekly period. Amended tax returns Both deposits will be due Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). Amended tax returns Deposits on Business Days Only If a deposit is required to be made on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. Amended tax returns A business day is any day other than a Saturday, Sunday, or legal holiday. Amended tax returns For example, if a deposit is required to be made on Friday and Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day). Amended tax returns Semiweekly schedule depositors   will always have 3 business days to make a deposit. Amended tax returns That is, if any of the 3 weekdays after the end of a semiweekly period is a legal holiday, you will have an additional day for each day that is a legal holiday to make the deposit. Amended tax returns For example, if a semiweekly schedule depositor accumulated taxes on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be made on Thursday (this allows 3 business days to make the deposit). Amended tax returns Legal holiday. Amended tax returns   The term “legal holiday” means any legal holiday in the District of Columbia. Amended tax returns Legal holidays for 2014 are listed below. Amended tax returns January 1— New Year's Day January 20— Birthday of Martin Luther King, Jr. Amended tax returns February 17— Washington's Birthday April 16— District of Columbia Emancipation Day May 26— Memorial Day July 4— Independence Day September 1— Labor Day October 13— Columbus Day November 11— Veterans' Day November 27— Thanksgiving Day December 25— Christmas Day $100,000 Next-Day Deposit Rule If you accumulate $100,000 or more of Form 943 taxes (that is, taxes reported on Form 943, line 11) on any day during a deposit period, you must deposit the tax by the close of the next business day, whether you are a monthly or a semiweekly schedule depositor. Amended tax returns For purposes of the $100,000 rule, do not continue accumulating a tax liability after the end of a deposit period. Amended tax returns For example, if a semiweekly schedule depositor has accumulated a liability of $95,000 on a Tuesday (of a Saturday-through-Tuesday deposit period) and accumulated a $10,000 liability on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. Amended tax returns Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. Amended tax returns However, once you accumulate at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew on the next day. Amended tax returns For example, Fir Co. Amended tax returns is a semiweekly schedule depositor. Amended tax returns On Monday, Fir Co. Amended tax returns accumulates taxes of $110,000 and must deposit this amount on Tuesday, the next business day. Amended tax returns On Tuesday, Fir Co. Amended tax returns accumulates additional taxes of $30,000. Amended tax returns Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. Amended tax returns does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). Amended tax returns If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day, you become a semiweekly schedule depositor on the next day and remain so for at least the rest of the calendar year and for the following calendar year. Amended tax returns Example of the $100,000 next-day deposit rule. Amended tax returns   Elm, Inc. Amended tax returns , started its business on May 1, 2014. Amended tax returns Because Elm, Inc. Amended tax returns , is a new employer, the taxes for its lookback period are considered to be zero; therefore, Elm, Inc. Amended tax returns , is a monthly schedule depositor. Amended tax returns On May 8, Elm, Inc. Amended tax returns , paid wages for the first time and accumulated taxes of $50,000. Amended tax returns On May 9 (Friday), Elm, Inc. Amended tax returns , paid wages and accumulated taxes of $60,000, for a total of $110,000. Amended tax returns Because Elm, Inc. Amended tax returns , accumulated $110,000 on May 9, it must deposit $110,000 by May 12 (Monday), the next business day. Amended tax returns Elm, Inc. Amended tax returns , became a semiweekly schedule depositor on May 10. Amended tax returns It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. Amended tax returns Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. Amended tax returns However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. Amended tax returns Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited. Amended tax returns The deposit shortfall is paid or deposited by the shortfall makeup date as described below. Amended tax returns Makeup Date for Deposit Shortfall:    Monthly Schedule Depositor—Deposit the shortfall or pay it with your return by the due date of your Form 943. Amended tax returns You may pay the shortfall with your Form 943 even if the amount is $2,500 or more. Amended tax returns Semiweekly Schedule Depositor—Deposit by the earlier of (a) the first Wednesday or Friday (whichever comes first) that falls on or after the 15th of the month following the month in which the shortfall occurred, or (b) the due date for Form 943. Amended tax returns For example, if a semiweekly schedule depositor has a deposit shortfall during February 2014, the shortfall makeup date is March 19, 2014 (Wednesday). Amended tax returns How To Deposit You must deposit employment taxes by electronic funds transfer. Amended tax returns See Payment with return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. Amended tax returns Electronic deposit requirement. Amended tax returns   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). Amended tax returns Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). Amended tax returns If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Amended tax returns   EFTPS is a free service provided by the Department of Treasury. Amended tax returns To get more information or to enroll in EFTPS, call 1-800-555-4477 (business), 1-800-316-6541 (individual), or 1-800-733-4829 (TDD). Amended tax returns You can also visit the EFTPS website at www. Amended tax returns eftps. Amended tax returns gov. Amended tax returns Additional information about EFTPS is also available in Publication 966. Amended tax returns New employers that have a federal tax obligation will be pre-enrolled in EFTPS. Amended tax returns Call the toll-free number located in your Employer Identification Number (EIN) Package to activate your enrollment and begin making your tax deposit payments. Amended tax returns See When you receive your EIN in section 1 for more information. Amended tax returns Deposit record. Amended tax returns   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. Amended tax returns The number can be used as a receipt or to trace the payment. Amended tax returns Depositing on time. Amended tax returns   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. Amended tax returns m. Amended tax returns Eastern time the day before the date a deposit is due. Amended tax returns If you use a third party to make a deposit on your behalf, they may have different cutoff times. Amended tax returns Same-day payment option. Amended tax returns   If you fail to initiate a deposit transaction on EFTPS by 8 p. Amended tax returns m. Amended tax returns Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Application (FTA). Amended tax returns To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. Amended tax returns Please check with your financial institution regarding availability, deadlines, and costs. Amended tax returns Your financial institution may charge you a fee for payments made this way. Amended tax returns To learn more about the information you will need to provide to your financial institution to make a same-day wire payment, visit www. Amended tax returns eftps. Amended tax returns gov to download the Same-Day Payment Worksheet. Amended tax returns Deposit Penalties Penalties may apply if you do not make required deposits on time or if you make deposits for less than the required amount. Amended tax returns The penalties do not apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect. Amended tax returns IRS may also waive deposit penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return. Amended tax returns For amounts not properly deposited or not deposited on time, the penalty rates are shown next. Amended tax returns Penalty Charged for. Amended tax returns . Amended tax returns . Amended tax returns 2% Deposits made 1 to 5 days late. Amended tax returns 5% Deposits made 6 to 15 days late. Amended tax returns 10% Deposits made 16 or more days late. Amended tax returns Also applies to amounts paid within 10 days of the date of the first notice the IRS sent asking for the tax due. Amended tax returns 10% Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return. Amended tax returns See Payment with return , earlier in this section, for exceptions. Amended tax returns 15% Amounts still unpaid more than 10 days after the date of the first notice that the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier. Amended tax returns Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. Amended tax returns Order in which deposits are applied. Amended tax returns   Deposits generally are applied to the most recent tax liability within the year. Amended tax returns If you receive a failure-to-deposit penalty notice, you may designate how your deposits are to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. Amended tax returns Follow the instructions on the penalty notice that you received. Amended tax returns For examples on how the IRS will apply deposits and more information on designating deposits, see Revenue Procedure 2001-58. Amended tax returns You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. Amended tax returns irs. Amended tax returns gov/pub/irs-irbs/irb01-50. Amended tax returns pdf. Amended tax returns Example. Amended tax returns Cedar, Inc. Amended tax returns , is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. Amended tax returns It does not make the deposit on July 15. Amended tax returns On August 15, Cedar, Inc. Amended tax returns , deposits $2,000. Amended tax returns Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit is applied to the August 15 deposit and the remaining $500 is applied to the July deposit. Amended tax returns Accordingly, $500 of the July 15 liability remains undeposited. Amended tax returns The penalty on this underdeposit will apply as explained above. Amended tax returns Trust fund recovery penalty. Amended tax returns   If federal income, social security, or Medicare taxes that must be withheld are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. Amended tax returns The penalty is the full amount of the unpaid trust fund tax. Amended tax returns This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. Amended tax returns   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. Amended tax returns   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship. Amended tax returns A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. Amended tax returns    Willfully means voluntarily, consciously, and intentionally. Amended tax returns A responsible person acts willfully if the person knows that the required actions of collecting, accounting for or paying over trust fund taxes are not taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes. Amended tax returns “Average” failure-to-deposit penalty. Amended tax returns   IRS may assess an “averaged” failure-to-deposit penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete Form 943, line 17, when your tax liability shown on Form 943, line 11, was $2,500 or more. Amended tax returns IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability shown on Form 943, line 11, was $2,500 or more and you did any of the following. Amended tax returns Completed Form 943, line 17, instead of Form 943-A. Amended tax returns Failed to attach a properly completed Form 943-A. Amended tax returns Completed Form 943-A incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. Amended tax returns   IRS figures the penalty by allocating your tax liability on Form 943, line 11, equally throughout the tax period. Amended tax returns Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. Amended tax returns   You can avoid the penalty by reviewing your return before filing it. Amended tax returns Follow these steps before filing your Form 943. Amended tax returns If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 943, line 17. Amended tax returns If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Form 943-A in the lines that represent the dates you paid your employees. Amended tax returns Verify that your total liability shown on Form 943, line 17, or Form 943-A, line M, equals your tax liability shown on Form 943, line 11. Amended tax returns Do not show negative amounts on Form 943, line 17, or Form 943-A. Amended tax returns For prior period errors discovered after December 31, 2008, do not adjust your tax liabilities reported on Form 943, line 17, or on Form 943-A. Amended tax returns Employers of Both Farm and Nonfarm Workers If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941 and 944 taxes). Amended tax returns Form 943 taxes and Form 941/944 taxes are not combined for purposes of applying any of the deposit schedule rules. Amended tax returns If a deposit is due, deposi
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The Amended Tax Returns

Amended tax returns 3. Amended tax returns   Personal Exemptions and Dependents Table of Contents What's New Introduction Useful Items - You may want to see: ExemptionsPersonal Exemptions Exemptions for Dependents Qualifying Child Qualifying Relative Phaseout of Exemptions Social Security Numbers for DependentsBorn and died in 2013. Amended tax returns Taxpayer identification numbers for aliens. Amended tax returns Taxpayer identification numbers for adoptees. Amended tax returns What's New Exemption amount. Amended tax returns  The amount you can deduct for each exemption has increased. Amended tax returns It was $3,800 for 2012. Amended tax returns It is $3,900 for 2013. Amended tax returns Exemption phaseout. Amended tax returns  You lose at least part of the benefit of your exemptions if your adjusted gross income is more than a certain amount. Amended tax returns For 2013, this amount is $150,000 for a married individual filing a separate return; $250,000 for a single individual; $275,000 for a head of household; and $300,000 for married individuals filing jointly or a qualifying widow(er). Amended tax returns See Phaseout of Exemptions , later. Amended tax returns Introduction This chapter discusses the following topics. Amended tax returns Personal exemptions — You generally can take one for yourself and, if you are married, one for your spouse. Amended tax returns Exemptions for dependents — You generally can take an exemption for each of your dependents. Amended tax returns A dependent is your qualifying child or qualifying relative. Amended tax returns If you are entitled to claim an exemption for a dependent, that dependent cannot claim a personal exemption on his or her own tax return. Amended tax returns Phaseout of exemptions — Your deduction is reduced if your adjusted gross income is more than a certain amount. Amended tax returns Social security number (SSN) requirement for dependents — You must list the SSN of any dependent for whom you claim an exemption. Amended tax returns Deduction. Amended tax returns   Exemptions reduce your taxable income. Amended tax returns You can deduct $3,900 for each exemption you claim in 2013. Amended tax returns But you may lose at least part of the dollar amount of your exemptions if your adjusted gross income is more than a certain amount. Amended tax returns See Phaseout of Exemptions , later. Amended tax returns How to claim exemptions. Amended tax returns    How you claim an exemption on your tax return depends on which form you file. Amended tax returns    If you file Form 1040EZ, the exemption amount is combined with the standard deduction amount and entered on line 5. Amended tax returns    If you file Form 1040A, complete lines 6a through 6d. Amended tax returns The total number of exemptions you can claim is the total in the box on line 6d. Amended tax returns Also complete line 26. Amended tax returns   If you file Form 1040, complete lines 6a through 6d. Amended tax returns The total number of exemptions you can claim is the total in the box on line 6d. Amended tax returns Also complete line 42. Amended tax returns Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information Form (and Instructions) 2120 Multiple Support Declaration 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent Exemptions There are two types of exemptions you may be able to take: Personal exemptions for yourself and your spouse, and Exemptions for dependents (dependency exemptions). Amended tax returns While each is worth the same amount ($3,900 for 2013), different rules apply to each type. Amended tax returns Personal Exemptions You are generally allowed one exemption for yourself. Amended tax returns If you are married, you may be allowed one exemption for your spouse. Amended tax returns These are called personal exemptions. Amended tax returns Your Own Exemption You can take one exemption for yourself unless you can be claimed as a dependent by another taxpayer. Amended tax returns If another taxpayer is entitled to claim you as a dependent, you cannot take an exemption for yourself even if the other taxpayer does not actually claim you as a dependent. Amended tax returns Your Spouse's Exemption Your spouse is never considered your dependent. Amended tax returns Joint return. Amended tax returns   On a joint return you can claim one exemption for yourself and one for your spouse. Amended tax returns Separate return. Amended tax returns   If you file a separate return, you can claim an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another taxpayer. Amended tax returns This is true even if the other taxpayer does not actually claim your spouse as a dependent. Amended tax returns You can claim an exemption for your spouse even if he or she is a nonresident alien; in that case, your spouse must have no gross income for U. Amended tax returns S. Amended tax returns tax purposes, must not be filing a return, and must not be the dependent of another taxpayer. Amended tax returns Death of spouse. Amended tax returns   If your spouse died during the year and you file a joint return for yourself and your deceased spouse, you generally can claim your spouse's exemption under the rules just explained in Joint return . Amended tax returns If you file a separate return for the year, you may be able to claim your spouse's exemption under the rules just described in Separate return . Amended tax returns   If you remarried during the year, you cannot take an exemption for your deceased spouse. Amended tax returns   If you are a surviving spouse without gross income and you remarry in the year your spouse died, you can be claimed as an exemption on both the final separate return of your deceased spouse and the separate return of your new spouse for that year. Amended tax returns If you file a joint return with your new spouse, you can be claimed as an exemption only on that return. Amended tax returns Divorced or separated spouse. Amended tax returns   If you obtained a final decree of divorce or separate maintenance during the year, you cannot take your former spouse's exemption. Amended tax returns This rule applies even if you provided all of your former spouse's support. Amended tax returns Exemptions for Dependents You are allowed one exemption for each person you can claim as a dependent. Amended tax returns You can claim an exemption for a dependent even if your dependent files a return. Amended tax returns The term “dependent” means: A qualifying child, or A qualifying relative. Amended tax returns The terms “ qualifying child ” and “ qualifying relative ” are defined later. Amended tax returns You can claim an exemption for a qualifying child or qualifying relative only if these three tests are met. Amended tax returns Dependent taxpayer test. Amended tax returns Joint return test. Amended tax returns Citizen or resident test. Amended tax returns These three tests are explained in detail later. Amended tax returns All the requirements for claiming an exemption for a dependent are summarized in Table 3-1. Amended tax returns Table 3-1. Amended tax returns Overview of the Rules for Claiming an Exemption for a Dependent Caution. Amended tax returns This table is only an overview of the rules. Amended tax returns For details, see the rest of this chapter. Amended tax returns You cannot claim any dependents if you (or your spouse, if filing jointly) could be claimed as a dependent by another taxpayer. Amended tax returns   You cannot claim a married person who files a joint return as a dependent unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid. Amended tax returns   You cannot claim a person as a dependent unless that person is a U. Amended tax returns S. Amended tax returns citizen, U. Amended tax returns S. Amended tax returns resident alien, U. Amended tax returns S. Amended tax returns national, or a resident of Canada or Mexico. Amended tax returns 1  You cannot claim a person as a dependent unless that person is your qualifying child or qualifying relative. Amended tax returns   Tests To Be a Qualifying Child   Tests To Be a Qualifying Relative The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Amended tax returns   The child must be (a) under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse, if filing jointly), or (c) any age if permanently and totally disabled. Amended tax returns   The child must have lived with you for more than half of the year. Amended tax returns 2  The child must not have provided more than half of his or her own support for the year. Amended tax returns   The child is not filing a joint return for the year (unless that return is filed only to get a refund of income tax withheld or estimated tax paid). Amended tax returns  If the child meets the rules to be a qualifying child of more than one person, only one person can actually treat the child as a qualifying child. Amended tax returns See the Special Rule for Qualifying Child of More Than One Person to find out which person is the person entitled to claim the child as a qualifying child. Amended tax returns   The person cannot be your qualifying child or the qualifying child of any other taxpayer. Amended tax returns   The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you , or (b) must live with you all year as a member of your household2 (and your relationship must not violate local law). Amended tax returns   The person's gross income for the year must be less than $3,900. Amended tax returns 3  You must provide more than half of the person's total support for the year. Amended tax returns 4  1There is an exception for certain adopted children. Amended tax returns 2There are exceptions for temporary absences, children who were born or died during the year, children of divorced or separated parents (or parents who live apart), and kidnapped children. Amended tax returns 3There is an exception if the person is disabled and has income from a sheltered workshop. Amended tax returns 4There are exceptions for multiple support agreements, children of divorced or separated parents (or parents who live apart), and kidnapped children. Amended tax returns Dependent not allowed a personal exemption. Amended tax returns If you can claim an exemption for your dependent, the dependent cannot claim his or her own personal exemption on his or her own tax return. Amended tax returns This is true even if you do not claim the dependent's exemption on your return. Amended tax returns It is also true if the dependent's exemption on your return is reduced or eliminated under the phaseout rule described under Phaseout of Exemptions, later. Amended tax returns Housekeepers, maids, or servants. Amended tax returns   If these people work for you, you cannot claim exemptions for them. Amended tax returns Child tax credit. Amended tax returns   You may be entitled to a child tax credit for each qualifying child who was under age 17 at the end of the year if you claimed an exemption for that child. Amended tax returns For more information, see chapter 34. Amended tax returns Dependent Taxpayer Test If you can be claimed as a dependent by another person, you cannot claim anyone else as a dependent. Amended tax returns Even if you have a qualifying child or qualifying relative, you cannot claim that person as a dependent. Amended tax returns If you are filing a joint return and your spouse can be claimed as a dependent by someone else, you and your spouse cannot claim any dependents on your joint return. Amended tax returns Joint Return Test You generally cannot claim a married person as a dependent if he or she files a joint return. Amended tax returns Exception. Amended tax returns   You can claim an exemption for a person who files a joint return if that person and his or her spouse file the joint return only to claim a refund of income tax withheld or estimated tax paid. Amended tax returns Example 1—child files joint return. Amended tax returns You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Amended tax returns He earned $25,000 for the year. Amended tax returns The couple files a joint return. Amended tax returns You cannot take an exemption for your daughter. Amended tax returns Example 2—child files joint return only as claim for refund of withheld tax. Amended tax returns Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Amended tax returns Neither is required to file a tax return. Amended tax returns They do not have a child. Amended tax returns Taxes were taken out of their pay so they filed a joint return only to get a refund of the withheld taxes. Amended tax returns The exception to the joint return test applies, so you are not disqualified from claiming an exemption for each of them just because they file a joint return. Amended tax returns You can claim exemptions for each of them if all the other tests to do so are met. Amended tax returns Example 3—child files joint return to claim American opportunity credit. Amended tax returns The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Amended tax returns He and his wife are not required to file a tax return. Amended tax returns However, they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Amended tax returns Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. Amended tax returns The exception to the joint return test does not apply, so you cannot claim an exemption for either of them. Amended tax returns Citizen or Resident Test You cannot claim a person as a dependent unless that person is a U. Amended tax returns S. Amended tax returns citizen, U. Amended tax returns S. Amended tax returns resident alien, U. Amended tax returns S. Amended tax returns national, or a resident of Canada or Mexico. Amended tax returns However, there is an exception for certain adopted children, as explained next. Amended tax returns Exception for adopted child. Amended tax returns   If you are a U. Amended tax returns S. Amended tax returns citizen or U. Amended tax returns S. Amended tax returns national who has legally adopted a child who is not a U. Amended tax returns S. Amended tax returns citizen, U. Amended tax returns S. Amended tax returns resident alien, or U. Amended tax returns S. Amended tax returns national, this test is met if the child lived with you as a member of your household all year. Amended tax returns This exception also applies if the child was lawfully placed with you for legal adoption. Amended tax returns Child's place of residence. Amended tax returns   Children usually are citizens or residents of the country of their parents. Amended tax returns   If you were a U. Amended tax returns S. Amended tax returns citizen when your child was born, the child may be a U. Amended tax returns S. Amended tax returns citizen and meet this test even if the other parent was a nonresident alien and the child was born in a foreign country. Amended tax returns Foreign students' place of residence. Amended tax returns   Foreign students brought to this country under a qualified international education exchange program and placed in American homes for a temporary period generally are not U. Amended tax returns S. Amended tax returns residents and do not meet this test. Amended tax returns You cannot claim an exemption for them. Amended tax returns However, if you provided a home for a foreign student, you may be able to take a charitable contribution deduction. Amended tax returns See Expenses Paid for Student Living With You in chapter 24. Amended tax returns U. Amended tax returns S. Amended tax returns national. Amended tax returns   A U. Amended tax returns S. Amended tax returns national is an individual who, although not a U. Amended tax returns S. Amended tax returns citizen, owes his or her allegiance to the United States. Amended tax returns U. Amended tax returns S. Amended tax returns nationals include American Samoans and Northern Mariana Islanders who chose to become U. Amended tax returns S. Amended tax returns nationals instead of U. Amended tax returns S. Amended tax returns citizens. Amended tax returns Qualifying Child Five tests must be met for a child to be your qualifying child. Amended tax returns The five tests are: Relationship, Age, Residency, Support, and Joint return. Amended tax returns These tests are explained next. Amended tax returns If a child meets the five tests to be the qualifying child of more than one person, a special rule applies to determine which person can actually treat the child as a qualifying child. Amended tax returns See Special Rule for Qualifying Child of More Than One Person, later. Amended tax returns Relationship Test To meet this test, a child must be: Your son, daughter, stepchild, foster child, or a descendant (for example, your grandchild) of any of them, or Your brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant (for example, your niece or nephew) of any of them. Amended tax returns Adopted child. Amended tax returns   An adopted child is always treated as your own child. Amended tax returns The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Amended tax returns Foster child. Amended tax returns   A foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Amended tax returns Age Test To meet this test, a child must be: Under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), A student under age 24 at the end of the year and younger than you (or your spouse, if filing jointly), or Permanently and totally disabled at any time during the year, regardless of age. Amended tax returns Example. Amended tax returns Your son turned 19 on December 10. Amended tax returns Unless he was permanently and totally disabled or a student, he does not meet the age test because, at the end of the year, he was not under age 19. Amended tax returns Child must be younger than you or spouse. Amended tax returns   To be your qualifying child, a child who is not permanently and totally disabled must be younger than you. Amended tax returns However, if you are married filing jointly, the child must be younger than you or your spouse but does not have to be younger than both of you. Amended tax returns Example 1—child not younger than you or spouse. Amended tax returns Your 23-year-old brother, who is a student and unmarried, lives with you and your spouse. Amended tax returns He is not disabled. Amended tax returns Both you and your spouse are 21 years old, and you file a joint return. Amended tax returns Your brother is not your qualifying child because he is not younger than you or your spouse. Amended tax returns Example 2—child younger than your spouse but not younger than you. Amended tax returns The facts are the same as in Example 1 except your spouse is 25 years old. Amended tax returns Because your brother is younger than your spouse, and you and your spouse are filing a joint return, your brother is your qualifying child, even though he is not younger than you. Amended tax returns Student defined. Amended tax returns   To qualify as a student, your child must be, during some part of each of any 5 calendar months of the year: A full-time student at a school that has a regular teaching staff, course of study, and a regularly enrolled student body at the school, or A student taking a full-time, on-farm training course given by a school described in (1), or by a state, county, or local government agency. Amended tax returns The 5 calendar months do not have to be consecutive. Amended tax returns Full-time student. Amended tax returns   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. Amended tax returns School defined. Amended tax returns   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Amended tax returns However, an on-the-job training course, correspondence school, or school offering courses only through the Internet does not count as a school. Amended tax returns Vocational high school students. Amended tax returns   Students who work on “co-op” jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. Amended tax returns Permanently and totally disabled. Amended tax returns   Your child is permanently and totally disabled if both of the following apply. Amended tax returns He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Amended tax returns A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Amended tax returns Residency Test To meet this test, your child must have lived with you for more than half the year. Amended tax returns There are exceptions for temporary absences, children who were born or died during the year, kidnapped children, and children of divorced or separated parents. Amended tax returns Temporary absences. Amended tax returns   Your child is considered to have lived with you during periods of time when one of you, or both, are temporarily absent due to special circumstances such as: Illness, Education, Business, Vacation, or Military service. Amended tax returns Your child is also considered to have lived with you during any required hospital stay following birth, as long as the child would have lived with you during that time but for the hospitalization. Amended tax returns Death or birth of child. Amended tax returns   A child who was born or died during the year is treated as having lived with you more than half of the year if your home was the child's home more than half of the time he or she was alive during the year. Amended tax returns Child born alive. Amended tax returns   You may be able to claim an exemption for a child born alive during the year, even if the child lived only for a moment. Amended tax returns State or local law must treat the child as having been born alive. Amended tax returns There must be proof of a live birth shown by an official document, such as a birth certificate. Amended tax returns The child must be your qualifying child or qualifying relative, and all the other tests to claim an exemption for a dependent must be met. Amended tax returns Stillborn child. Amended tax returns   You cannot claim an exemption for a stillborn child. Amended tax returns Kidnapped child. Amended tax returns   You may be able to treat your child as meeting the residency test even if the child has been kidnapped. Amended tax returns See Publication 501 for details. Amended tax returns Children of divorced or separated parents (or parents who live apart). Amended tax returns   In most cases, because of the residency test, a child of divorced or separated parents is the qualifying child of the custodial parent. Amended tax returns However, the child will be treated as the qualifying child of the noncustodial parent if all four of the following statements are true. Amended tax returns The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of the year, whether or not they are or were married. Amended tax returns The child received over half of his or her support for the year from the parents. Amended tax returns The child is in the custody of one or both parents for more than half of the year. Amended tax returns Either of the following statements is true. Amended tax returns The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return. Amended tax returns (If the decree or agreement went into effect after 1984 and before 2009, see Post-1984 and pre-2009 divorce decree or separation agreement , later. Amended tax returns If the decree or agreement went into effect after 2008, see Post-2008 divorce decree or separation agreement , later. Amended tax returns ) A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 states that the noncustodial parent can claim the child as a dependent, the decree or agreement was not changed after 1984 to say the noncustodial parent cannot claim the child as a dependent, and the noncustodial parent provides at least $600 for the child's support during the year. Amended tax returns Custodial parent and noncustodial parent. Amended tax returns   The custodial parent is the parent with whom the child lived for the greater number of nights during the year. Amended tax returns The other parent is the noncustodial parent. Amended tax returns   If the parents divorced or separated during the year and the child lived with both parents before the separation, the custodial parent is the one with whom the child lived for the greater number of nights during the rest of the year. Amended tax returns   A child is treated as living with a parent for a night if the child sleeps: At that parent's home, whether or not the parent is present, or In the company of the parent, when the child does not sleep at a parent's home (for example, the parent and child are on vacation together). Amended tax returns Equal number of nights. Amended tax returns   If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income (AGI). Amended tax returns December 31. Amended tax returns   The night of December 31 is treated as part of the year in which it begins. Amended tax returns For example, December 31, 2013, is treated as part of 2013. Amended tax returns Emancipated child. Amended tax returns   If a child is emancipated under state law, the child is treated as not living with either parent. Amended tax returns See Examples 5 and 6. Amended tax returns Absences. Amended tax returns   If a child was not with either parent on a particular night (because, for example, the child was staying at a friend's house), the child is treated as living with the parent with whom the child normally would have lived for that night, except for the absence. Amended tax returns But if it cannot be determined with which parent the child normally would have lived or if the child would not have lived with either parent that night, the child is treated as not living with either parent that night. Amended tax returns Parent works at night. Amended tax returns   If, due to a parent's nighttime work schedule, a child lives for a greater number of days, but not nights, with the parent who works at night, that parent is treated as the custodial parent. Amended tax returns On a school day, the child is treated as living at the primary residence registered with the school. Amended tax returns Example 1—child lived with one parent for a greater number of nights. Amended tax returns You and your child’s other parent are divorced. Amended tax returns In 2013, your child lived with you 210 nights and with the other parent 155 nights. Amended tax returns You are the custodial parent. Amended tax returns Example 2—child is away at camp. Amended tax returns In 2013, your daughter lives with each parent for alternate weeks. Amended tax returns In the summer, she spends 6 weeks at summer camp. Amended tax returns During the time she is at camp, she is treated as living with you for 3 weeks and with her other parent, your ex-spouse, for 3 weeks because this is how long she would have lived with each parent if she had not attended summer camp. Amended tax returns Example 3—child lived same number of nights with each parent. Amended tax returns Your son lived with you 180 nights during the year and lived the same number of nights with his other parent, your ex-spouse. Amended tax returns Your AGI is $40,000. Amended tax returns Your ex-spouse's AGI is $25,000. Amended tax returns You are treated as your son's custodial parent because you have the higher AGI. Amended tax returns Example 4—child is at parent’s home but with other parent. Amended tax returns Your son normally lives with you during the week and with his other parent, your ex-spouse, every other weekend. Amended tax returns You become ill and are hospitalized. Amended tax returns The other parent lives in your home with your son for 10 consecutive days while you are in the hospital. Amended tax returns Your son is treated as living with you during this 10-day period because he was living in your home. Amended tax returns Example 5—child emancipated in May. Amended tax returns When your son turned age 18 in May 2013, he became emancipated under the law of the state where he lives. Amended tax returns As a result, he is not considered in the custody of his parents for more than half of the year. Amended tax returns The special rule for children of divorced or separated parents does not apply. Amended tax returns Example 6—child emancipated in August. Amended tax returns Your daughter lives with you from January 1, 2013, until May 31, 2013, and lives with her other parent, your ex-spouse, from June 1, 2013, through the end of the year. Amended tax returns She turns 18 and is emancipated under state law on August 1, 2013. Amended tax returns Because she is treated as not living with either parent beginning on August 1, she is treated as living with you the greater number of nights in 2013. Amended tax returns You are the custodial parent. Amended tax returns Written declaration. Amended tax returns    The custodial parent may use either Form 8332 or a similar statement (containing the same information required by the form) to make the written declaration to release the exemption to the noncustodial parent. Amended tax returns The noncustodial parent must attach a copy of the form or statement to his or her tax return. Amended tax returns   The exemption can be released for 1 year, for a number of specified years (for example, alternate years), or for all future years, as specified in the declaration. Amended tax returns Post-1984 and pre-2009 divorce decree or separation agreement. Amended tax returns   If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Amended tax returns The decree or agreement must state all three of the following. Amended tax returns The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support. Amended tax returns The custodial parent will not claim the child as a dependent for the year. Amended tax returns The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent. Amended tax returns   The noncustodial parent must attach all of the following pages of the decree or agreement to his or her tax return. Amended tax returns The cover page (write the other parent's social security number on this page). Amended tax returns The pages that include all of the information identified in items (1) through (3) above. Amended tax returns The signature page with the other parent's signature and the date of the agreement. Amended tax returns Post-2008 divorce decree or separation agreement. Amended tax returns   The noncustodial parent cannot attach pages from the decree or agreement instead of Form 8332 if the decree or agreement went into effect after 2008. Amended tax returns The custodial parent must sign either Form 8332 or a similar statement whose only purpose is to release the custodial parent's claim to an exemption for a child, and the noncustodial parent must attach a copy to his or her return. Amended tax returns The form or statement must release the custodial parent's claim to the child without any conditions. Amended tax returns For example, the release must not depend on the noncustodial parent paying support. Amended tax returns    The noncustodial parent must attach the required information even if it was filed with a return in an earlier year. Amended tax returns Revocation of release of claim to an exemption. Amended tax returns   The custodial parent can revoke a release of claim to exemption that he or she previously released to the noncustodial parent on Form 8332 (or a similar statement). Amended tax returns For the revocation to be effective for 2013, the custodial parent must have given (or made reasonable efforts to give) written notice of the revocation to the noncustodial parent in 2012 or earlier. Amended tax returns The custodial parent can use Part III of Form 8332 for this purpose and must attach a copy of the revocation to his or her return for each tax year he or she claims the child as a dependent as a result of the revocation. Amended tax returns Remarried parent. Amended tax returns   If you remarry, the support provided by your new spouse is treated as provided by you. Amended tax returns Parents who never married. Amended tax returns   This special rule for divorced or separated parents also applies to parents who never married, and who lived apart at all times during the last 6 months of the year. Amended tax returns Support Test (To Be a Qualifying Child) To meet this test, the child cannot have provided more than half of his or her own support for the year. Amended tax returns This test is different from the support test to be a qualifying relative, which is described later. Amended tax returns However, to see what is or is not support, see Support Test (To Be a Qualifying Relative) , later. Amended tax returns If you are not sure whether a child provided more than half of his or her own support, you may find Worksheet 3-1 helpful. Amended tax returns Worksheet 3-1. Amended tax returns Worksheet for Determining Support Funds Belonging to the Person You Supported       1. Amended tax returns Enter the total funds belonging to the person you supported, including income received (taxable and nontaxable) and amounts borrowed during the year, plus the amount in savings and other accounts at the beginning of the year. Amended tax returns Do not include funds provided by the state; include those amounts on line 23 instead 1. Amended tax returns     2. Amended tax returns Enter the amount on line 1 that was used for the person's support 2. Amended tax returns     3. Amended tax returns Enter the amount on line 1 that was used for other purposes 3. Amended tax returns     4. Amended tax returns Enter the total amount in the person's savings and other accounts at the end of the year 4. Amended tax returns     5. Amended tax returns Add lines 2 through 4. Amended tax returns (This amount should equal line 1. Amended tax returns ) 5. Amended tax returns     Expenses for Entire Household (where the person you supported lived)       6. Amended tax returns Lodging (complete line 6a or 6b):         a. Amended tax returns Enter the total rent paid 6a. Amended tax returns       b. Amended tax returns Enter the fair rental value of the home. Amended tax returns If the person you supported owned the home,  also include this amount in line 21 6b. Amended tax returns     7. Amended tax returns Enter the total food expenses 7. Amended tax returns     8. Amended tax returns Enter the total amount of utilities (heat, light, water, etc. Amended tax returns not included in line 6a or 6b) 8. Amended tax returns     9. Amended tax returns Enter the total amount of repairs (not included in line 6a or 6b) 9. Amended tax returns     10. Amended tax returns Enter the total of other expenses. Amended tax returns Do not include expenses of maintaining the home, such as mortgage interest, real estate taxes, and insurance 10. Amended tax returns     11. Amended tax returns Add lines 6a through 10. Amended tax returns These are the total household expenses 11. Amended tax returns     12. Amended tax returns Enter total number of persons who lived in the household 12. Amended tax returns     Expenses for the Person You Supported       13. Amended tax returns Divide line 11 by line 12. Amended tax returns This is the person's share of the household expenses 13. Amended tax returns     14. Amended tax returns Enter the person's total clothing expenses 14. Amended tax returns     15. Amended tax returns Enter the person's total education expenses 15. Amended tax returns     16. Amended tax returns Enter the person's total medical and dental expenses not paid for or reimbursed by insurance 16. Amended tax returns     17. Amended tax returns Enter the person's total travel and recreation expenses 17. Amended tax returns     18. Amended tax returns Enter the total of the person's other expenses 18. Amended tax returns     19. Amended tax returns Add lines 13 through 18. Amended tax returns This is the total cost of the person's support for the year 19. Amended tax returns     Did the Person Provide More Than Half of His or Her Own Support?       20. Amended tax returns Multiply line 19 by 50% (. Amended tax returns 50) 20. Amended tax returns     21. Amended tax returns Enter the amount from line 2, plus the amount from line 6b if the person you supported owned  the home. Amended tax returns This is the amount the person provided for his or her own support 21. Amended tax returns     22. Amended tax returns Is line 21 more than line 20?   No. Amended tax returns You meet the support test for this person to be your qualifying child. Amended tax returns If this person also meets the other tests to be a qualifying child, stop here; do not complete lines 23–26. Amended tax returns Otherwise, go to line 23 and fill out the rest of the worksheet to determine if this person is your qualifying relative. Amended tax returns    Yes. Amended tax returns You do not meet the support test for this person to be either your qualifying child or your qualifying relative. Amended tax returns Stop here. Amended tax returns        Did You Provide More Than Half?       23. Amended tax returns Enter the amount others provided for the person's support. Amended tax returns Include amounts provided by state, local, and other welfare societies or agencies. Amended tax returns Do not include any amounts included on line 1 23. Amended tax returns     24. Amended tax returns Add lines 21 and 23 24. Amended tax returns     25. Amended tax returns Subtract line 24 from line 19. Amended tax returns This is the amount you provided for the person's support 25. Amended tax returns     26. Amended tax returns Is line 25 more than line 20?   Yes. Amended tax returns You meet the support test for this person to be your qualifying relative. Amended tax returns    No. Amended tax returns You do not meet the support test for this person to be your qualifying relative. Amended tax returns You cannot claim an exemption for this person unless you can do so under a multiple support agreement, the support test for children of divorced or separated parents, or the special rule for kidnapped children. Amended tax returns See Multiple Support Agreement or Support Test for Children of Divorced or Separated Parents (or Parents Who Live Apart) , or Kidnapped child under Qualifying Relative. Amended tax returns   Example. Amended tax returns You provided $4,000 toward your 16-year-old son's support for the year. Amended tax returns He has a part-time job and provided $6,000 to his own support. Amended tax returns He provided more than half of his own support for the year. Amended tax returns He is not your qualifying child. Amended tax returns Foster care payments and expenses. Amended tax returns   Payments you receive for the support of a foster child from a child placement agency are considered support provided by the agency. Amended tax returns Similarly, payments you receive for the support of a foster child from a state or county are considered support provided by the state or county. Amended tax returns   If you are not in the trade or business of providing foster care and your unreimbursed out-of-pocket expenses in caring for a foster child were mainly to benefit an organization qualified to receive deductible charitable contributions, the expenses are deductible as charitable contributions but are not considered support you provided. Amended tax returns For more information about the deduction for charitable contributions, see chapter 24. Amended tax returns If your unreimbursed expenses are not deductible as charitable contributions, they may qualify as support you provided. Amended tax returns   If you are in the trade or business of providing foster care, your unreimbursed expenses are not considered support provided by you. Amended tax returns Example 1. Amended tax returns Lauren, a foster child, lived with Mr. Amended tax returns and Mrs. Amended tax returns Smith for the last 3 months of the year. Amended tax returns The Smiths cared for Lauren because they wanted to adopt her (although she had not been placed with them for adoption). Amended tax returns They did not care for her as a trade or business or to benefit the agency that placed her in their home. Amended tax returns The Smiths' unreimbursed expenses are not deductible as charitable contributions but are considered support they provided for Lauren. Amended tax returns Example 2. Amended tax returns You provided $3,000 toward your 10-year-old foster child's support for the year. Amended tax returns The state government provided $4,000, which is considered support provided by the state, not by the child. Amended tax returns See Support provided by the state (welfare, food stamps, housing, etc. Amended tax returns ) , later. Amended tax returns Your foster child did not provide more than half of her own support for the year. Amended tax returns Scholarships. Amended tax returns   A scholarship received by a child who is a student is not taken into account in determining whether the child provided more than half of his or her own support. Amended tax returns Joint Return Test (To Be a Qualifying Child) To meet this test, the child cannot file a joint return for the year. Amended tax returns Exception. Amended tax returns   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. Amended tax returns Example 1—child files joint return. Amended tax returns You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Amended tax returns He earned $25,000 for the year. Amended tax returns The couple files a joint return. Amended tax returns Because your daughter and her husband file a joint return, she is not your qualifying child. Amended tax returns Example 2—child files joint return only as a claim for refund of withheld tax. Amended tax returns Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Amended tax returns Neither is required to file a tax return. Amended tax returns They do not have a child. Amended tax returns Taxes were taken out of their pay so they filed a joint return only to get a refund of the withheld taxes. Amended tax returns The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Amended tax returns Example 3—child files joint return to claim American opportunity credit. Amended tax returns The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Amended tax returns He and his wife were not required to file a tax return. Amended tax returns However, they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Amended tax returns Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. Amended tax returns The exception to the joint return test does not apply, so your son is not your qualifying child. Amended tax returns Special Rule for Qualifying Child of More Than One Person If your qualifying child is not a qualifying child of anyone else, this special rule does not apply to you and you do not need to read about it. Amended tax returns This is also true if your qualifying child is not a qualifying child of anyone else except your spouse with whom you file a joint return. Amended tax returns If a child is treated as the qualifying child of the noncustodial parent under the rules for children of divorced or separated parents (or parents who live apart) described earlier, see Applying this special rule to divorced or separated parents (or parents who live apart), later. Amended tax returns Sometimes, a child meets the relationship, age, residency, support, and joint return tests to be a qualifying child of more than one person. Amended tax returns Although the child is a qualifying child of each of these persons, only one person can actually treat the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). Amended tax returns The exemption for the child. Amended tax returns The child tax credit. Amended tax returns Head of household filing status. Amended tax returns The credit for child and dependent care expenses. Amended tax returns The exclusion from income for dependent care benefits. Amended tax returns The earned income credit. Amended tax returns The other person cannot take any of these benefits based on this qualifying child. Amended tax returns In other words, you and the other person cannot agree to divide these benefits between you. Amended tax returns The other person cannot take any of these tax benefits for a child unless he or she has a different qualifying child. Amended tax returns Tiebreaker rules. Amended tax returns   To determine which person can treat the child as a qualifying child to claim these six tax benefits, the following tiebreaker rules apply. Amended tax returns If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Amended tax returns If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. Amended tax returns If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. Amended tax returns If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. Amended tax returns If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. Amended tax returns If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. Amended tax returns If the child's parents file a joint return with each other, this rule can be applied by dividing the parents' combined AGI equally between the parents. Amended tax returns See Example 6 . Amended tax returns   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. Amended tax returns Example 1—child lived with parent and grandparent. Amended tax returns You and your 3-year-old daughter Jane lived with your mother all year. Amended tax returns You are 25 years old, unmarried, and your AGI is $9,000. Amended tax returns Your mother's AGI is $15,000. Amended tax returns Jane's father did not live with you or your daughter. Amended tax returns You have not signed Form 8332 (or a similar statement) to release the child's exemption to the noncustodial parent. Amended tax returns Jane is a qualifying child of both you and your mother because she meets the relationship, age, residency, support, and joint return tests for both you and your mother. Amended tax returns However, only one of you can claim her. Amended tax returns Jane is not a qualifying child of anyone else, including her father. Amended tax returns You agree to let your mother claim Jane. Amended tax returns This means your mother can claim Jane as a qualifying child for all of the six tax benefits listed earlier, if she qualifies (and if you do not claim Jane as a qualifying child for any of those tax benefits). Amended tax returns Example 2—parent has higher AGI than grandparent. Amended tax returns The facts are the same as in Example 1 except your AGI is $18,000. Amended tax returns Because your mother's AGI is not higher than yours, she cannot claim Jane. Amended tax returns Only you can claim Jane. Amended tax returns Example 3—two persons claim same child. Amended tax returns The facts are the same as in Example 1 except that you and your mother both claim Jane as a qualifying child. Amended tax returns In this case, you, as the child's parent, will be the only one allowed to claim Jane as a qualifying child. Amended tax returns The IRS will disallow your mother's claim to the six tax benefits listed earlier unless she has another qualifying child. Amended tax returns Example 4—qualifying children split between two persons. Amended tax returns The facts are the same as in Example 1 except you also have two other young children who are qualifying children of both you and your mother. Amended tax returns Only one of you can claim each child. Amended tax returns However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Amended tax returns For example, if you claim one child, your mother can claim the other two. Amended tax returns Example 5—taxpayer who is a qualifying child. Amended tax returns The facts are the same as in Example 1 except you are only 18 years old and did not provide more than half of your own support for the year. Amended tax returns This means you are your mother's qualifying child. Amended tax returns If she can claim you as a dependent, then you cannot claim your daughter as a dependent because of the Dependent Taxpayer Test explained earlier. Amended tax returns Example 6—child lived with both parents and grandparent. Amended tax returns The facts are the same as in Example 1 except you are married to your daughter's father. Amended tax returns The two of you live together with your daughter and your mother, and have an AGI of $20,000 on a joint return. Amended tax returns If you and your husband do not claim your daughter as a qualifying child, your mother can claim her instead. Amended tax returns Even though the AGI on your joint return, $20,000, is more than your mother's AGI of $15,000, for this purpose each parent's AGI can be treated as $10,000, so your mother's $15,000 AGI is treated as higher than the highest AGI of any of the child's parents who can claim the child. Amended tax returns Example 7—separated parents. Amended tax returns You, your husband, and your 10-year-old son lived together until August 1, 2013, when your husband moved out of the household. Amended tax returns In August and September, your son lived with you. Amended tax returns For the rest of the year, your son lived with your husband, the boy's father. Amended tax returns Your son is a qualifying child of both you and your husband because your son lived with each of you for more than half the year and because he met the relationship, age, support, and joint return tests for both of you. Amended tax returns At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the rule for children of divorced or separated parents (or parents who live apart) does not apply. Amended tax returns You and your husband will file separate returns. Amended tax returns Your husband agrees to let you treat your son as a qualifying child. Amended tax returns This means, if your husband does not claim your son as a qualifying child, you can claim your son as a qualifying child for the dependency exemption, child tax credit, and exclusion for dependent care benefits (if you qualify for each of those tax benefits). Amended tax returns However, you cannot claim head of household filing status because you and your husband did not live apart for the last 6 months of the year. Amended tax returns As a result, your filing status is married filing separately, so you cannot claim the earned income credit or the credit for child and dependent care expenses. Amended tax returns Example 8—separated parents claim same child. Amended tax returns The facts are the same as in Example 7 except that you and your husband both claim your son as a qualifying child. Amended tax returns In this case, only your husband will be allowed to treat your son as a qualifying child. Amended tax returns This is because, during 2013, the boy lived with him longer than with you. Amended tax returns If you claimed an exemption or the child tax credit for your son, the IRS will disallow your claim to both these tax benefits. Amended tax returns If you do not have another qualifying child or dependent, the IRS will also disallow your claim to the exclusion for dependent care benefits. Amended tax returns In addition, because you and your husband did not live apart for the last 6 months of the year, your husband cannot claim head of household filing status. Amended tax returns As a result, his filing status is married filing separately, so he cannot claim the earned income credit or the credit for child and dependent care expenses. Amended tax returns Example 9—unmarried parents. Amended tax returns You, your 5-year-old son, and your son's father lived together all year. Amended tax returns You and your son's father are not married. Amended tax returns Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, support, and joint return tests for both you and his father. Amended tax returns Your AGI is $12,000 and your son's father's AGI is $14,000. Amended tax returns Your son's father agrees to let you claim the child as a qualifying child. Amended tax returns This means you can claim him as a qualifying child for the dependency exemption, child tax credit, head of household filing status, credit for child and dependent care expenses, exclusion for dependent care benefits, and the earned income credit, if you qualify for each of those tax benefits (and if your son's father does not, in fact, claim your son as a qualifying child for any of those tax benefits). Amended tax returns Example 10—unmarried parents claim same child. Amended tax returns The facts are the same as in Example 9 except that you and your son's father both claim your son as a qualifying child. Amended tax returns In this case, only your son's father will be allowed to treat your son as a qualifying child. Amended tax returns This is because his AGI, $14,000, is more than your AGI, $12,000. Amended tax returns If you claimed an exemption or the child tax credit for your son, the IRS will disallow your claim to both these tax benefits. Amended tax returns If you do not have another qualifying child or dependent, the IRS will also disallow your claim to the earned income credit, head of household filing status, the credit for child and dependent care expenses, and the exclusion for dependent care benefits. Amended tax returns Example 11—child did not live with a parent. Amended tax returns You and your 7-year-old niece, your sister's child, lived with your mother all year. Amended tax returns You are 25 years old, and your AGI is $9,300. Amended tax returns Your mother's AGI is $15,000. Amended tax returns Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Amended tax returns Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, support, and joint return tests for both you and your mother. Amended tax returns However, only your mother can treat her as a qualifying child. Amended tax returns This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Amended tax returns Applying this special rule to divorced or separated parents (or parents who live apart). Amended tax returns   If a child is treated as the qualifying child of the noncustodial parent under the rules described earlier for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. Amended tax returns However, the custodial parent, if eligible, or other eligible person can claim the child as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, and the earned income credit. Amended tax returns If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules just explained determine which person can treat the child as a qualifying child. Amended tax returns Example 1. Amended tax returns You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Amended tax returns Your AGI is $10,000. Amended tax returns Your mother's AGI is $25,000. Amended tax returns Your son's father did not live with you or your son. Amended tax returns Under the rules explained earlier for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for him. Amended tax returns Because of this, you cannot claim an exemption or the child tax credit for your son. Amended tax returns However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the earned income credit. Amended tax returns You and your mother did not have any child care expenses or dependent care benefits, so neither of you can claim the credit for child and dependent care expenses or the exclusion for dependent care benefits. Amended tax returns But the boy is a qualifying child of both you and your mother for head of household filing status and the earned income credit because he meets the relationship, age, residency, support, and joint return tests for both you and your mother. Amended tax returns (Note: The support test does not apply for the earned income credit. Amended tax returns ) However, you agree to let your mother claim your son. Amended tax returns This means she can claim him for head of household filing status and the earned income credit if she qualifies for each and if you do not claim him as a qualifying child for the earned income credit. Amended tax returns (You cannot claim head of household filing status because your mother paid the entire cost of keeping up the home. Amended tax returns ) Example 2. Amended tax returns The facts are the same as in Example 1 except your AGI is $25,000 and your mother's AGI is $21,000. Amended tax returns Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Amended tax returns Example 3. Amended tax returns The facts are the same as in Example 1 except you and your mother both claim your son as a qualifying child for the earned income credit. Amended tax returns Your mother also claims him as a qualifying child for head of household filing status. Amended tax returns You, as the child's parent, will be the only one allowed to claim your son as a qualifying child for the earned income credit. Amended tax returns The IRS will disallow your mother's claim to the earned income credit and head of household filing status unless she has another qualifying child. Amended tax returns Qualifying Relative Four tests must be met for a person to be your qualifying relative. Amended tax returns The four tests are: Not a qualifying child test, Member of household or relationship test, Gross income test, and Support test. Amended tax returns Age. Amended tax returns   Unlike a qualifying child, a qualifying relative can be any age. Amended tax returns There is no age test for a qualifying relative. Amended tax returns Kidnapped child. Amended tax returns   You may be able to treat a child as your qualifying relative even if the child has been kidnapped. Amended tax returns See Publication 501 for details. Amended tax returns Not a Qualifying Child Test A child is not your qualifying relative if the child is your qualifying child or the qualifying child of any other taxpayer. Amended tax returns Example 1. Amended tax returns Your 22-year-old daughter, who is a student, lives with you and meets all the tests to be your qualifying child. Amended tax returns She is not your qualifying relative. Amended tax returns Example 2. Amended tax returns Your 2-year-old son lives with your parents and meets all the tests to be their qualifying child. Amended tax returns He is not your qualifying relative. Amended tax returns Example 3. Amended tax returns Your son lives with you but is not your qualifying child because he is 30 years old and does not meet the age test. Amended tax returns He may be your qualifying relative if the gross income test and the support test are met. Amended tax returns Example 4. Amended tax returns Your 13-year-old grandson lived with his mother for 3 months, with his uncle for 4 months, and with you for 5 months during the year. Amended tax returns He is not your qualifying child because he does not meet the residency test. Amended tax returns He may be your qualifying relative if the gross income test and the support test are met. Amended tax returns Child of person not required to file a return. Amended tax returns   A child is not the qualifying child of any other taxpayer and so may qualify as your qualifying relative if the child's parent (or other person for whom the child is defined as a qualifying child) is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Amended tax returns Example 1—return not required. Amended tax returns You support an unrelated friend and her 3-year-old child, who lived with you all year in your home. Amended tax returns Your friend has no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Amended tax returns Both your friend and her child are your qualifying relatives if the support test is met. Amended tax returns Example 2—return filed to claim refund. Amended tax returns The facts are the same as in Example 1 except your friend had wages of $1,500 during the year and had income tax withheld from her wages. Amended tax returns She files a return only to get a refund of the income tax withheld and does not claim the earned income credit or any other tax credits or deductions. Amended tax returns Both your friend and her child are your qualifying relatives if the support test is met. Amended tax returns Example 3—earned income credit claimed. Amended tax returns The facts are the same as in Example 2 except your friend had wages of $8,000 during the year and claimed the earned income credit on her return. Amended tax returns Your friend's child is the qualifying child of another taxpayer (your friend), so you cannot claim your friend's child as your qualifying relative. Amended tax returns Child in Canada or Mexico. Amended tax returns   You may be able to claim your child as a dependent even if the child lives in Canada or Mexico. Amended tax returns If the child does not live with you, the child does not meet the residency test to be your qualifying child. Amended tax returns However, the child may still be your qualifying relative. Amended tax returns If the persons the child does live with are not U. Amended tax returns S. Amended tax returns citizens and have no U. Amended tax returns S. Amended tax returns gross income, those persons are not “taxpayers,” so the child is not the qualifying child of any other taxpayer. Amended tax returns If the child is not the qualifying child of any other taxpayer, the child is your qualifying relative as long as the gross income test and the support test are met. Amended tax returns   You cannot claim as a dependent a child who lives in a foreign country other than Canada or Mexico, unless the child is a U. Amended tax returns S. Amended tax returns citizen, U. Amended tax returns S. Amended tax returns resident alien, or U. Amended tax returns S. Amended tax returns national. Amended tax returns There is an exception for certain adopted children who lived with you all year. Amended tax returns See Citizen or Resident Test , earlier. Amended tax returns Example. Amended tax returns You provide all the support of your children, ages 6, 8, and 12, who live in Mexico with your mother and have no income. Amended tax returns You are single and live in the United States. Amended tax returns Your mother is not a U. Amended tax returns S. Amended tax returns citizen and has no U. Amended tax returns S. Amended tax returns income, so she is not a “taxpayer. Amended tax returns ” Your children are not your qualifying children because they do not meet the residency test. Amended tax returns But since they are not the qualifying children of any other taxpayer, they are your qualifying relatives and you can claim them as dependents. Amended tax returns You may also be able to claim your mother as a dependent if the gross income and support tests are met. Amended tax returns Member of Household or Relationship Test To meet this test, a person must either: Live with you all year as a member of your household, or Be related to you in one of the ways listed under Relatives who do not have to live with you . Amended tax returns If at any time during the year the person was your spouse, that person cannot be your qualifying relative. Amended tax returns However, see Personal Exemptions , earlier. Amended tax returns Relatives who do not have to live with you. Amended tax returns   A person related to you in any of the following ways does not have to live with you all year as a member of your household to meet this test. Amended tax returns Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). Amended tax returns (A legally adopted child is considered your child. Amended tax returns ) Your brother, sister, half brother, half sister, stepbrother, or stepsister. Amended tax returns Your father, mother, grandparent, or other direct ancestor, but not foster parent. Amended tax returns Your stepfather or stepmother. Amended tax returns A son or daughter of your brother or sister. Amended tax returns A son or daughter of your half brother or half sister. Amended tax returns A brother or sister of your father or mother. Amended tax returns Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. Amended tax returns Any of these relationships that were established by marriage are not ended by death or divorce. Amended tax returns Example. Amended tax returns You and your wife began supporting your wife's father, a widower, in 2006. Amended tax returns Your wife died in 2012. Amended tax returns Despite your wife's death, your father-in-law continues to meet this test, even if he does not live with you. Amended tax returns You can claim him as a dependent if all other tests are met, including the gross income test and support test. Amended tax returns Foster child. Amended tax returns   A foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Amended tax returns Joint return. Amended tax returns   If you file a joint return, the person can be related to either you or your spouse. Amended tax returns Also, the person does not need to be related to the spouse who provides support. Amended tax returns   For example, your spouse's uncle who receives more than half of his support from you may be your qualifying relative, even though he does not live with you. Amended tax returns However, if you and your spouse file separate returns, your spouse's uncle can be your qualifying relative only if he lives with you all year as a member of your household. Amended tax returns Temporary absences. Amended tax returns   A person is considered to live with you as a member of your household during periods of time when one of you, or both, are temporarily absent due to special circumstances such as: Illness, Education, Business, Vacation, or Military service. Amended tax returns   If the person is placed in a nursing home for an indefinite period of time to receive constant medical care, the absence may be considered temporary. Amended tax returns Death or birth. Amended tax returns   A person who died during the year, but lived with you as a member of your household until death, will meet this test. Amended tax returns The same is true for a child who was born during the year and lived with you as a member of your household for the rest of the year. Amended tax returns The test is also met if a child lived with you as a member of your household except for any required hospital stay following birth. Amended tax returns   If your dependent died during the year and you otherwise qualify to claim an exemption for the dependent, you can still claim the exemption. Amended tax returns Example. Amended tax returns Your dependent mother died on January 15. Amended tax returns She met the tests to be your qualifying relative. Amended tax returns The other tests to claim an exemption for a dependent were also met. Amended tax returns You can claim an exemption for her on your return. Amended tax returns Local law violated. Amended tax returns   A person does not meet this test if at any time during the year the relationship between you and that person violates local law. Amended tax returns Example. Amended tax returns Your girlfriend lived with you as a member of your household all year. Amended tax returns However, your relationship with her violated the laws of the state where you live, because she was married to someone else. Amended tax returns Therefore, she does not meet this test and you cannot claim her as a dependent. Amended tax returns Adopted child. Amended tax returns   An adopted child is always treated as your own child. Amended tax returns The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Amended tax returns Cousin. Amended tax returns   Your cousin meets this test only if he or she lives with you all year as a member of your household. Amended tax returns A cousin is a descendant of a brother or sister of your father or mother. Amended tax returns Gross Income Test To meet this test, a person's gross income for the year must be less than $3,900. Amended tax returns Gross income defined. Amended tax returns   Gross income is all income in the form of money, property, and services that is not exempt from tax. Amended tax returns   In a manufacturing, merchandising, or mining business, gross income is the total net sales minus the cost of goods sold, plus any miscellaneous income from the business. Amended tax returns   Gross receipts from rental property are gross income. Amended tax returns Do not deduct taxes, repairs, or other expenses, to determine the gross income from rental property. Amended tax returns   Gross income includes a partner's share of the gross (not a share of the net) partnership income. Amended tax returns    Gross income also includes all taxable unemployment compensation and certain scholarship and fellowship grants. Amended tax returns Scholarships received by degree candidates and used for tuition, fees, supplies, books, and equipment required for particular courses generally are not included in gross income. Amended tax returns For more information about scholarships, see chapter 12. Amended tax returns   Tax-exempt income, such as certain social security benefits, is not included in gross income. Amended tax returns Disabled dependent working at sheltered workshop. Amended tax returns   For purposes of the gross income test, the gross income of an individual who is permanently and totally disabled at any time during the year does not include income for services the individual performs at a sheltered workshop. Amended tax returns The availability of medical care at the workshop must be the main reason for the individual's presence there. Amended tax returns Also, the income must come solely from activities at the workshop that are incident to this medical care. Amended tax returns   A “sheltered workshop” is a school that: Provides special instruction or training designed to alleviate the disability of the individual, and Is operated by certain tax-exempt organizations, or by a state, a U. Amended tax returns S. Amended tax returns possession, a political subdivision of a state or possession, the United States, or the District of Columbia. Amended tax returns “Permanently and totally disabled” has the same meaning here as under Qualifying Child, earlier. Amended tax returns Support Test (To Be a Qualifying Relative) To meet this test, you generally must provide more than half of a person's total support during the calendar year. Amended tax returns However, if two or more persons provide support, but no one person provides more than half of a person's total support, see Multiple Support Agreement , later. Amended tax returns How to determine if support test is met. Amended tax returns   You figure whether you have provided more than half of a person's total support by comparing the amount you contributed to that person's support with the entire amount of support that person received from all sources. Amended tax returns This includes support the person provided from his or her own funds. Amended tax returns   You may find Worksheet 3-1 helpful in figuring whether you provided more than half of a person's support. Amended tax returns Person's own funds not used for support. Amended tax returns   A person's own funds are not support unless they are actually spent for support. Amended tax returns Example. Amended tax returns Your mother received $2,400 in social security benefits and $300 in interest. Amended tax returns She paid $2,000 for lodging and $400 for recreation. Amended tax returns She put $300 in a savings account. Amended tax returns Even though your mother received a total of $2,700 ($2,400 + $300), she spent only $2,400 ($2,000 + $400) for her own support. Amended tax returns If you spent more than $2,400 for her support and no other support was received, you have provided more than half of her support. Amended tax returns Child's wages used for own support. Amended tax returns   You cannot include in your contribution to your child's support any support paid for by the child with the child's own wages, even if you paid the wages. Amended tax returns Year support is provided. Amended tax returns   The year you provide the support is the year you pay for it, even if you do so with borrowed money that you repay in a later year. Amended tax returns   If you use a fiscal year to report your income, you must provide more than half of the dependent's support for the calendar year in which your fiscal year begins. Amended tax returns Armed Forces dependency allotments. Amended tax returns   The part of the allotment contributed by the government and the part taken out of your military pay are both considered provided by you in figuring whether you provide more than half of the support. Amended tax returns If your allotment is used to support persons other than those you name, you can take the exemptions for them if they otherwise qualify. Amended tax returns Example. Amended tax returns You are in the Armed Forces. Amended tax returns You authorize an allotment for your widowed mother that she uses to support herself and her sister. Amended tax returns If the allotment provides more than half of each person's support, you can take an exemption for each of them, if they otherwise qualify, even though you authorize the allotment only for your mother. Amended tax returns Tax-exempt military quarters allowances. Amended tax returns   These allowances are treated the same way as dependency allotments in figuring support. Amended tax returns The allotment of pay and the tax-exempt basic allowance for quarters are both considered as provided by you for support. Amended tax returns Tax-exempt income. Amended tax returns   In figuring a person's total support, include tax-exempt income, savings, and borrowed amounts used to support that person. Amended tax returns Tax-exempt income includes certain social security benefits, welfare benefits, nontaxable life insurance proceeds, Armed Forces family allotments, nontaxable pensions, and tax-exempt interest. Amended tax returns Example 1. Amended tax returns You provide $4,000 toward your mother's support during the year. Amended tax returns She has earned income of $600, nontaxable social security benefits of $4,800, and tax-exempt interest of $200. Amended tax returns She uses all these for her support. Amended tax returns You cannot claim an exemption for your mother because the $4,000 you provide is not more than half of her total support of $9,600 ($4,000 + $600 + $4,800 + $200). Amended tax returns Example 2. Amended tax returns Your niece takes out a student loan of $2,500 a