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E File State Income Tax

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E File State Income Tax

E file state income tax Publication 525 - Main Content Table of Contents Employee CompensationBabysitting. E file state income tax Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Business and Investment IncomeRents From Personal Property Royalties Partnership Income S Corporation Income Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Miscellaneous IncomeBartering Canceled Debts Host or Hostess Life Insurance Proceeds Recoveries Survivor Benefits Unemployment Benefits Welfare and Other Public Assistance Benefits Other Income RepaymentsMethod 1. E file state income tax Method 2. E file state income tax How To Get Tax HelpLow Income Taxpayer Clinics Employee Compensation In most cases, you must include in gross income everything you receive in payment for personal services. E file state income tax In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. E file state income tax You should receive a Form W-2 from your employer or former employer showing the pay you received for your services. E file state income tax Include all your pay on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ, even if you do not receive Form W-2, or you receive a Form W-2 that does not include all pay that should be included on the Form W-2. E file state income tax If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. E file state income tax These wages must be included on line 7 of Form 1040. E file state income tax See Form 8919 for more information. E file state income tax Childcare providers. E file state income tax   If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. E file state income tax If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. E file state income tax You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. E file state income tax Babysitting. E file state income tax   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. E file state income tax Bankruptcy. E file state income tax   If you filed for bankruptcy under Chapter 11 of the Bankruptcy Code, you must allocate your wages and withheld income tax. E file state income tax Your W-2 will show your total wages and withheld income tax for the year. E file state income tax On your tax return, you report the wages and withheld income tax for the period before you filed for bankruptcy. E file state income tax Your bankruptcy estate reports the wages and withheld income tax for the period after you filed for bankruptcy. E file state income tax If you receive other information returns (such as Form 1099-DIV, Dividends and Distributions, or 1099-INT, Interest Income) that report gross income to you, rather than to the bankruptcy estate, you must allocate that income. E file state income tax   The only exception is for purposes of figuring your self-employment tax, if you are self-employed. E file state income tax For that purpose, you must take into account all your self-employment income for the year from services performed both before and after the beginning of the case. E file state income tax   You must file a statement with your income tax return stating you filed a Chapter 11 bankruptcy case. E file state income tax The statement must show the allocation and describe the method used to make the allocation. E file state income tax For a sample of this statement and other information, see Notice 2006-83, 2006-40 I. E file state income tax R. E file state income tax B. E file state income tax 596, available at www. E file state income tax irs. E file state income tax gov/irb/2006-40_IRB/ar12. E file state income tax html. E file state income tax Miscellaneous Compensation This section discusses many types of employee compensation. E file state income tax The subjects are arranged in alphabetical order. E file state income tax Advance commissions and other earnings. E file state income tax   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. E file state income tax    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. E file state income tax If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), Itemized Deductions, or you may be able to take a credit for that year. E file state income tax See Repayments , later. E file state income tax Allowances and reimbursements. E file state income tax    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. E file state income tax If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. E file state income tax Back pay awards. E file state income tax   Include in income amounts you are awarded in a settlement or judgment for back pay. E file state income tax These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. E file state income tax They should be reported to you by your employer on Form W-2. E file state income tax Bonuses and awards. E file state income tax    Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. E file state income tax These include prizes such as vacation trips for meeting sales goals. E file state income tax If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. E file state income tax However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. E file state income tax Employee achievement award. E file state income tax   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. E file state income tax However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. E file state income tax Your employer can tell you whether your award is a qualified plan award. E file state income tax Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. E file state income tax   However, the exclusion does not apply to the following awards. E file state income tax A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. E file state income tax A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. E file state income tax Example. E file state income tax Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. E file state income tax Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. E file state income tax However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 − $1,600) in his income. E file state income tax Differential wage payments. E file state income tax   This is any payment made by an employer to an individual for any period during which the individual is, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages the individual would have received from the employer for that period. E file state income tax These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. E file state income tax The payments are reported as wages on Form W-2. E file state income tax Government cost-of-living allowances. E file state income tax   Most payments received by U. E file state income tax S. E file state income tax Government civilian employees for working abroad are taxable. E file state income tax However, certain cost-of-living allowances are tax free. E file state income tax Publication 516, U. E file state income tax S. E file state income tax Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. E file state income tax Nonqualified deferred compensation plans. E file state income tax   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. E file state income tax This amount is shown on Form W-2, box 12, using code Y. E file state income tax This amount is not included in your income. E file state income tax   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. E file state income tax This amount is included in your wages shown on Form W-2, box 1. E file state income tax It is also shown on Form W-2, box 12, using code Z. E file state income tax Nonqualified deferred compensation plans of nonqualified entities. E file state income tax   In most cases, any compensation deferred under a nonqualified deferred compensation plan of a nonqualified entity is included in gross income when there is no substantial risk of forfeiture of the rights to such compensation. E file state income tax For this purpose, a nonqualified entity is: A foreign corporation unless substantially all of its income is: Effectively connected with the conduct of a trade or business in the United States, or Subject to a comprehensive foreign income tax. E file state income tax A partnership unless substantially all of its income is allocated to persons other than: Foreign persons for whom the income is not subject to a comprehensive foreign income tax, and Tax-exempt organizations. E file state income tax Note received for services. E file state income tax   If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. E file state income tax When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. E file state income tax Do not include that part again in your income. E file state income tax Include the rest of the payment in your income in the year of payment. E file state income tax   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. E file state income tax Severance pay. E file state income tax   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. E file state income tax Accrued leave payment. E file state income tax   If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. E file state income tax   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. E file state income tax You can reduce gross wages by the amount you repaid in the same tax year in which you received it. E file state income tax Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on your return and the wages on your Forms W-2. E file state income tax Outplacement services. E file state income tax   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. E file state income tax    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). E file state income tax Sick pay. E file state income tax   Pay you receive from your employer while you are sick or injured is part of your salary or wages. E file state income tax In addition, you must include in your income sick pay benefits received from any of the following payers. E file state income tax A welfare fund. E file state income tax A state sickness or disability fund. E file state income tax An association of employers or employees. E file state income tax An insurance company, if your employer paid for the plan. E file state income tax However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. E file state income tax For more information, see Other Sickness and Injury Benefits under Sickness and Injury Benefits, later. E file state income tax Social security and Medicare taxes paid by employer. E file state income tax   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. E file state income tax The payment is also treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. E file state income tax However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. E file state income tax Stock appreciation rights. E file state income tax   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. E file state income tax When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. E file state income tax You include the cash payment in income in the year you use the right. E file state income tax Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. E file state income tax Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. E file state income tax See Valuation of Fringe Benefits , later in this discussion, for information on how to determine the amount to include in income. E file state income tax Recipient of fringe benefit. E file state income tax   You are the recipient of a fringe benefit if you perform the services for which the fringe benefit is provided. E file state income tax You are considered to be the recipient even if it is given to another person, such as a member of your family. E file state income tax An example is a car your employer gives to your spouse for services you perform. E file state income tax The car is considered to have been provided to you and not to your spouse. E file state income tax   You do not have to be an employee of the provider to be a recipient of a fringe benefit. E file state income tax If you are a partner, director, or independent contractor, you also can be the recipient of a fringe benefit. E file state income tax Provider of benefit. E file state income tax   Your employer or another person for whom you perform services is the provider of a fringe benefit regardless of whether that person actually provides the fringe benefit to you. E file state income tax The provider can be a client or customer of an independent contractor. E file state income tax Accounting period. E file state income tax   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. E file state income tax Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. E file state income tax The general rule: benefits are reported for a full calendar year (January 1–December 31). E file state income tax The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. E file state income tax For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. E file state income tax Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. E file state income tax   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). E file state income tax Form W-2. E file state income tax   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. E file state income tax Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). E file state income tax However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). E file state income tax Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. E file state income tax Benefits you receive from the plan may be taxable, as explained, later, under Sickness and Injury Benefits . E file state income tax For information on the items covered in this section, other than Long-term care coverage , see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. E file state income tax Long-term care coverage. E file state income tax   Contributions by your employer to provide coverage for long-term care services generally are not included in your income. E file state income tax However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. E file state income tax This amount will be reported as wages in box 1 of your Form W-2. E file state income tax Archer MSA contributions. E file state income tax    Contributions by your employer to your Archer MSA generally are not included in your income. E file state income tax Their total will be reported in box 12 of Form W-2, with code R. E file state income tax You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. E file state income tax File the form with your return. E file state income tax Health flexible spending arrangement (health FSA). E file state income tax   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. E file state income tax   Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. E file state income tax The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. E file state income tax For more information, see Notice 2012-40, 2012-26 I. E file state income tax R. E file state income tax B. E file state income tax 1046, available at www. E file state income tax irs. E file state income tax gov/irb/2012-26 IRB/ar09. E file state income tax html. E file state income tax Health reimbursement arrangement (HRA). E file state income tax   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. E file state income tax Health savings accounts (HSA). E file state income tax   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. E file state income tax Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. E file state income tax Contributions made by your employer are not included in your income. E file state income tax Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. E file state income tax Distributions not used for qualified medical expenses are included in your income. E file state income tax See Publication 969 for the requirements of an HSA. E file state income tax   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. E file state income tax The contributions are treated as a distribution of money and are not included in the partner's gross income. E file state income tax Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. E file state income tax In both situations, the partner can deduct the contribution made to the partner's HSA. E file state income tax   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. E file state income tax The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. E file state income tax Qualified HSA funding distribution. E file state income tax   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. E file state income tax See Publication 590, Individual Retirement Arrangements (IRAs), for the requirements for these qualified HSA funding distributions. E file state income tax Failure to maintain eligibility. E file state income tax   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. E file state income tax If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. E file state income tax This income is also subject to an additional 10% tax. E file state income tax Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. E file state income tax See Instructions for Form 8839, Qualified Adoption Expenses, for more information. E file state income tax Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. E file state income tax They also are included as social security and Medicare wages in boxes 3 and 5. E file state income tax However, they are not included as wages in box 1. E file state income tax To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. E file state income tax File the form with your return. E file state income tax Athletic Facilities If your employer provides you with the free or low-cost use of an employer-operated gym or other athletic club on your employer's premises, the value is not included in your compensation. E file state income tax The gym must be used primarily by employees, their spouses, and their dependent children. E file state income tax If your employer pays for a fitness program provided to you at an off-site resort hotel or athletic club, the value of the program is included in your compensation. E file state income tax De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. E file state income tax In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. E file state income tax Also see Employee Discounts , later. E file state income tax Holiday gifts. E file state income tax   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. E file state income tax However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. E file state income tax Dependent Care Benefits If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. E file state income tax Dependent care benefits include: Amounts your employer pays directly to either you or your care provider for the care of your qualifying person while you work, and The fair market value of care in a daycare facility provided or sponsored by your employer. E file state income tax The amount you can exclude is limited to the lesser of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). E file state income tax Your employer must show the total amount of dependent care benefits provided to you during the year under a qualified plan in box 10 of your Form W-2. E file state income tax Your employer also will include any dependent care benefits over $5,000 in your wages shown in box 1 of your Form W-2. E file state income tax To claim the exclusion, you must complete Part III of Form 2441, Child and Dependent Care Expenses. E file state income tax See the Instructions for Form 2441 for more information. E file state income tax Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. E file state income tax For more information, see Publication 970. E file state income tax Employee Discounts If your employer sells you property or services at a discount, you may be able to exclude the amount of the discount from your income. E file state income tax The exclusion applies to discounts on property or services offered to customers in the ordinary course of the line of business in which you work. E file state income tax However, it does not apply to discounts on real property or property commonly held for investment (such as stocks or bonds). E file state income tax The exclusion is limited to the price charged nonemployee customers multiplied by the following percentage. E file state income tax For a discount on property, your employer's gross profit percentage (gross profit divided by gross sales) on all property sold during the employer's previous tax year. E file state income tax (Ask your employer for this percentage. E file state income tax ) For a discount on services, 20%. E file state income tax Financial Counseling Fees Financial counseling fees paid for you by your employer are included in your income and must be reported as part of wages. E file state income tax If the fees are for tax or investment counseling, they can be deducted on Schedule A (Form 1040) as a miscellaneous deduction (subject to the 2%-of-AGI limit). E file state income tax Qualified retirement planning services paid for you by your employer may be excluded from your income. E file state income tax For more information, see Retirement Planning Services , later. E file state income tax Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. E file state income tax However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. E file state income tax For exceptions to this rule, see Entire cost excluded , and Entire cost taxed , later. E file state income tax If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. E file state income tax Also, it is shown separately in box 12 with code C. E file state income tax Group-term life insurance. E file state income tax   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. E file state income tax Permanent benefits. E file state income tax   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. E file state income tax Your employer should be able to tell you the amount to include in your income. E file state income tax Accidental death benefits. E file state income tax   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. E file state income tax Former employer. E file state income tax   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. E file state income tax Also, it is shown separately in box 12 with code C. E file state income tax Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. E file state income tax You must pay these taxes with your income tax return. E file state income tax Include them on line 60, Form 1040, and follow the instructions forline 60. E file state income tax For more information, see the Instructions for Form 1040. E file state income tax Two or more employers. E file state income tax   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. E file state income tax If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. E file state income tax You must figure how much to include in your income. E file state income tax Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. E file state income tax Figuring the taxable cost. E file state income tax    Use the following worksheet to figure the amount to include in your income. E file state income tax   If you pay any part of the cost of the insurance, your entire payment reduces, dollar for dollar, the amount you otherwise would include in your income. E file state income tax However, you cannot reduce the amount to include in your income by: Payments for coverage in a different tax year, Payments for coverage through a cafeteria plan, unless the payments are after-tax contributions, or Payments for coverage not taxed to you because of the exceptions discussed later under Entire cost excluded . E file state income tax Worksheet 1. E file state income tax Figuring the Cost of Group-Term Life Insurance To Include in Income 1. E file state income tax Enter the total amount of your insurance coverage from your employer(s) 1. E file state income tax   2. E file state income tax Limit on exclusion for employer-provided group-term life insurance coverage 2. E file state income tax 50,000 3. E file state income tax Subtract line 2 from line 1 3. E file state income tax   4. E file state income tax Divide line 3 by $1,000. E file state income tax Figure to the nearest tenth 4. E file state income tax   5. E file state income tax Go to Table 1. E file state income tax Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. E file state income tax   6. E file state income tax Multiply line 4 by line 5 6. E file state income tax     7. E file state income tax Enter the number of full months of coverage at this cost 7. E file state income tax   8. E file state income tax Multiply line 6 by line 7 8. E file state income tax   9. E file state income tax Enter the premiums you paid per month 9. E file state income tax       10. E file state income tax Enter the number of months you paid the  premiums 10. E file state income tax       11. E file state income tax Multiply line 9 by line 10. E file state income tax 11. E file state income tax   12. E file state income tax Subtract line 11 from line 8. E file state income tax Include this amount in your income as wages 12. E file state income tax   Table 1. E file state income tax Cost of $1,000 of Group-Term Life Insurance for One Month   Age Cost     Under 25 $ . E file state income tax 05     25 through 29 . E file state income tax 06     30 through 34 . E file state income tax 08     35 through 39 . E file state income tax 09     40 through 44 . E file state income tax 10     45 through 49 . E file state income tax 15     50 through 54 . E file state income tax 23     55 through 59 . E file state income tax 43     60 through 64 . E file state income tax 66     65 through 69 1. E file state income tax 27     70 and older 2. E file state income tax 06   Example. E file state income tax You are 51 years old and work for employers A and B. E file state income tax Both employers provide group-term life insurance coverage for you for the entire year. E file state income tax Your coverage is $35,000 with employer A and $45,000 with employer B. E file state income tax You pay premiums of $4. E file state income tax 15 a month under the employer B group plan. E file state income tax You figure the amount to include in your income as follows. E file state income tax   Worksheet 1. E file state income tax Figuring the Cost of Group-Term Life Insurance To Include in Income—Illustrated 1. E file state income tax Enter the total amount of your insurance coverage from your employer(s) 1. E file state income tax 80,000 2. E file state income tax Limit on exclusion for employer-provided group-term life insurance coverage 2. E file state income tax 50,000 3. E file state income tax Subtract line 2 from line 1 3. E file state income tax 30,000 4. E file state income tax Divide line 3 by $1,000. E file state income tax Figure to the nearest tenth 4. E file state income tax 30. E file state income tax 0 5. E file state income tax Go to Table 1. E file state income tax Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. E file state income tax . E file state income tax 23 6. E file state income tax Multiply line 4 by line 5 6. E file state income tax 6. E file state income tax 90 7. E file state income tax Enter the number of full months of coverage at this cost. E file state income tax 7. E file state income tax 12 8. E file state income tax Multiply line 6 by line 7 8. E file state income tax 82. E file state income tax 80 9. E file state income tax Enter the premiums you paid per month 9. E file state income tax 4. E file state income tax 15     10. E file state income tax Enter the number of months you paid the premiums 10. E file state income tax 12     11. E file state income tax Multiply line 9 by line 10. E file state income tax 11. E file state income tax 49. E file state income tax 80 12. E file state income tax Subtract line 11 from line 8. E file state income tax Include this amount in your income as wages 12. E file state income tax 33. E file state income tax 00 The total amount to include in income for the cost of excess group-term life insurance is $33. E file state income tax Neither employer provided over $50,000 insurance coverage, so the wages shown on your Forms W-2 do not include any part of that $33. E file state income tax You must add it to the wages shown on your Forms W-2 and include the total on your return. E file state income tax Entire cost excluded. E file state income tax   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. E file state income tax You are permanently and totally disabled and have ended your employment. E file state income tax Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. E file state income tax A charitable organization to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. E file state income tax (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. E file state income tax ) The plan existed on January 1, 1984, and: You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. E file state income tax Entire cost taxed. E file state income tax   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply. E file state income tax The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. E file state income tax You are a key employee and your employer's plan discriminates in favor of key employees. E file state income tax Meals and Lodging You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met. E file state income tax The meals are: Furnished on the business premises of your employer, and Furnished for the convenience of your employer. E file state income tax The lodging is: Furnished on the business premises of your employer, Furnished for the convenience of your employer, and A condition of your employment. E file state income tax (You must accept it in order to be able to properly perform your duties. E file state income tax ) You also do not include in your income the value of meals or meal money that qualifies as a de minimis fringe benefit. E file state income tax See De Minimis (Minimal) Benefits , earlier. E file state income tax Faculty lodging. E file state income tax   If you are an employee of an educational institution or an academic health center and you are provided with lodging that does not meet the three conditions given earlier, you still may not have to include the value of the lodging in income. E file state income tax However, the lodging must be qualified campus lodging, and you must pay an adequate rent. E file state income tax Academic health center. E file state income tax   This is an organization that meets the following conditions. E file state income tax Its principal purpose or function is to provide medical or hospital care or medical education or research. E file state income tax It receives payments for graduate medical education under the Social Security Act. E file state income tax One of its principal purposes or functions is to provide and teach basic and clinical medical science and research using its own faculty. E file state income tax Qualified campus lodging. E file state income tax   Qualified campus lodging is lodging furnished to you, your spouse, or one of your dependents by, or on behalf of, the institution or center for use as a home. E file state income tax The lodging must be located on or near a campus of the educational institution or academic health center. E file state income tax Adequate rent. E file state income tax   The amount of rent you pay for the year for qualified campus lodging is considered adequate if it is at least equal to the lesser of: 5% of the appraised value of the lodging, or The average of rentals paid by individuals (other than employees or students) for comparable lodging held for rent by the educational institution. E file state income tax If the amount you pay is less than the lesser of these amounts, you must include the difference in your income. E file state income tax   The lodging must be appraised by an independent appraiser and the appraisal must be reviewed on an annual basis. E file state income tax Example. E file state income tax Carl Johnson, a sociology professor for State University, rents a home from the university that is qualified campus lodging. E file state income tax The house is appraised at $200,000. E file state income tax The average rent paid for comparable university lodging by persons other than employees or students is $14,000 a year. E file state income tax Carl pays an annual rent of $11,000. E file state income tax Carl does not include in his income any rental value because the rent he pays equals at least 5% of the appraised value of the house (5% × $200,000 = $10,000). E file state income tax If Carl paid annual rent of only $8,000, he would have to include $2,000 in his income ($10,000 − $8,000). E file state income tax Moving Expense Reimbursements In most cases, if your employer pays for your moving expenses (either directly or indirectly) and the expenses would have been deductible if you paid them yourself, the value is not included in your income. E file state income tax See Publication 521 for more information. E file state income tax No-Additional-Cost Services The value of services you receive from your employer for free, at cost, or for a reduced price is not included in your income if your employer: Offers the same service for sale to customers in the ordinary course of the line of business in which you work, and Does not have a substantial additional cost (including any sales income given up) to provide you with the service (regardless of what you paid for the service). E file state income tax In most cases, no-additional-cost services are excess capacity services, such as airline, bus, or train tickets, hotel rooms, and telephone services. E file state income tax Example. E file state income tax You are employed as a flight attendant for a company that owns both an airline and a hotel chain. E file state income tax Your employer allows you to take personal flights (if there is an unoccupied seat) and stay in any one of their hotels (if there is an unoccupied room) at no cost to you. E file state income tax The value of the personal flight is not included in your income. E file state income tax However, the value of the hotel room is included in your income because you do not work in the hotel business. E file state income tax Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. E file state income tax Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. E file state income tax You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. E file state income tax Also, see Financial Counseling Fees , earlier. E file state income tax Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. E file state income tax A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. E file state income tax Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. E file state income tax However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. E file state income tax Exclusion limit. E file state income tax   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. E file state income tax   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. E file state income tax   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. E file state income tax   If the benefits have a value that is more than these limits, the excess must be included in your income. E file state income tax You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. E file state income tax Commuter highway vehicle. E file state income tax   This is a highway vehicle that seats at least six adults (not including the driver). E file state income tax At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). E file state income tax Transit pass. E file state income tax   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. E file state income tax Qualified parking. E file state income tax   This is parking provided to an employee at or near the employer's place of business. E file state income tax It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. E file state income tax It does not include parking at or near the employee's home. E file state income tax Qualified bicycle commuting. E file state income tax   This is reimbursement based on the number of qualified bicycle commuting months for the year. E file state income tax A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. E file state income tax The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. E file state income tax Tuition Reduction You can exclude a qualified tuition reduction from your income. E file state income tax This is the amount of a reduction in tuition: For education (below graduate level) furnished by an educational institution to an employee, former employee who retired or became disabled, or his or her spouse and dependent children. E file state income tax For education furnished to a graduate student at an educational institution if the graduate student is engaged in teaching or research activities for that institution. E file state income tax Representing payment for teaching, research, or other services if you receive the amount under the National Health Service Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance program. E file state income tax For more information, see Publication 970. E file state income tax Working Condition Benefits If your employer provides you with a product or service and the cost of it would have been allowable as a business or depreciation deduction if you paid for it yourself, the cost is not included in your income. E file state income tax Example. E file state income tax You work as an engineer and your employer provides you with a subscription to an engineering trade magazine. E file state income tax The cost of the subscription is not included in your income because the cost would have been allowable to you as a business deduction if you had paid for the subscription yourself. E file state income tax Valuation of Fringe Benefits If a fringe benefit is included in your income, the amount included is generally its value determined under the general valuation rule or under the special valuation rules. E file state income tax For an exception, see Group-Term Life Insurance , earlier. E file state income tax General valuation rule. E file state income tax   You must include in your income the amount by which the fair market value of the fringe benefit is more than the sum of: The amount, if any, you paid for the benefit, plus The amount, if any, specifically excluded from your income by law. E file state income tax If you pay fair market value for a fringe benefit, no amount is included in your income. E file state income tax Fair market value. E file state income tax   The fair market value of a fringe benefit is determined by all the facts and circumstances. E file state income tax It is the amount you would have to pay a third party to buy or lease the benefit. E file state income tax This is determined without regard to: Your perceived value of the benefit, or The amount your employer paid for the benefit. E file state income tax Employer-provided vehicles. E file state income tax   If your employer provides a car (or other highway motor vehicle) to you, your personal use of the car is usually a taxable noncash fringe benefit. E file state income tax   Under the general valuation rules, the value of an employer-provided vehicle is the amount you would have to pay a third party to lease the same or a similar vehicle on the same or comparable terms in the same geographic area where you use the vehicle. E file state income tax An example of a comparable lease term is the amount of time the vehicle is available for your use, such as a 1-year period. E file state income tax The value cannot be determined by multiplying a cents-per-mile rate times the number of miles driven unless you prove the vehicle could have been leased on a cents-per-mile basis. E file state income tax Flights on employer-provided aircraft. E file state income tax   Under the general valuation rules, if your flight on an employer-provided piloted aircraft is primarily personal and you control the use of the aircraft for the flight, the value is the amount it would cost to charter the flight from a third party. E file state income tax   If there is more than one employee on the flight, the cost to charter the aircraft must be divided among those employees. E file state income tax The division must be based on all the facts, including which employee or employees control the use of the aircraft. E file state income tax Special valuation rules. E file state income tax   You generally can use a special valuation rule for a fringe benefit only if your employer uses the rule. E file state income tax If your employer uses a special valuation rule, you cannot use a different special rule to value that benefit. E file state income tax You always can use the general valuation rule discussed earlier, based on facts and circumstances, even if your employer uses a special rule. E file state income tax   If you and your employer use a special valuation rule, you must include in your income the amount your employer determines under the special rule minus the sum of: Any amount you repaid your employer, plus Any amount specifically excluded from income by law. E file state income tax The special valuation rules are the following. E file state income tax The automobile lease rule. E file state income tax The vehicle cents-per-mile rule. E file state income tax The commuting rule. E file state income tax The unsafe conditions commuting rule. E file state income tax The employer-operated eating-facility rule. E file state income tax   For more information on these rules, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. E file state income tax    For information on the non-commercial flight and commercial flight valuation rules, see sections 1. E file state income tax 61-21(g) and 1. E file state income tax 61-21(h) of the regulations. E file state income tax Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. E file state income tax (Your employer can tell you whether your retirement plan is qualified. E file state income tax ) However, the cost of life insurance coverage included in the plan may have to be included. E file state income tax See Group-Term Life Insurance , earlier, under Fringe Benefits. E file state income tax If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. E file state income tax However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. E file state income tax For information on distributions from retirement plans, see Publication 575 (or Publication 721, Tax Guide to U. E file state income tax S. E file state income tax Civil Service Retirement Benefits, if you are a federal employee or retiree). E file state income tax Elective Deferrals If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. E file state income tax The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. E file state income tax An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. E file state income tax However, it is included in wages subject to social security and Medicare taxes. E file state income tax Elective deferrals include elective contributions to the following retirement plans. E file state income tax Cash or deferred arrangements (section 401(k) plans). E file state income tax The Thrift Savings Plan for federal employees. E file state income tax Salary reduction simplified employee pension plans (SARSEP). E file state income tax Savings incentive match plans for employees (SIMPLE plans). E file state income tax Tax-sheltered annuity plans (403(b) plans). E file state income tax Section 501(c)(18)(D) plans. E file state income tax (But see Reporting by employer , later. E file state income tax ) Section 457 plans. E file state income tax Qualified automatic contribution arrangements. E file state income tax   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. E file state income tax You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. E file state income tax The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. E file state income tax   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. E file state income tax Overall limit on deferrals. E file state income tax   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3), earlier. E file state income tax The specific plan limits for the plans listed in (4) through (7), earlier, are discussed later. E file state income tax Amounts deferred under specific plan limits are part of the overall limit on deferrals. E file state income tax   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. E file state income tax However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. E file state income tax Catch-up contributions. E file state income tax   You may be allowed catch-up contributions (additional elective deferrals) if you are age 50 or older by the end of your tax year. E file state income tax For more information about catch-up contributions to 403(b) plans, see chapter 6 of Publication 571, Tax Sheltered Annuity Plans. E file state income tax   For more information about additional elective deferrals to: SEPs (SARSEPs), see Salary Reduction Simplified Employee Pension in chapter 2 of Publication 560, Retirement Plans for Small Business. E file state income tax SIMPLE plans, see How Much Can Be Contributed on Your Behalf? in chapter 3 of Publication 590. E file state income tax Section 457 plans, see Limit for deferrals under section 457 plans , later. E file state income tax Limit for deferrals under SIMPLE plans. E file state income tax   If you are a participant in a SIMPLE plan, you generally should not have deferred more than $12,000 in 2013. E file state income tax Amounts you defer under a SIMPLE plan count toward the overall limit ($17,500 for 2013) and may affect the amount you can defer under other elective deferral plans. E file state income tax Limit for tax-sheltered annuities. E file state income tax   If you are a participant in a tax-sheltered annuity plan (403(b) plan), the limit on elective deferrals for 2013 generally is $17,500. E file state income tax However, if you have at least 15 years of service with a public school system, a hospital, a home health service agency, a health and welfare service agency, a church, or a convention or association of churches (or associated organization), the limit on elective deferrals is increased by the least of the following amounts. E file state income tax $3,000, $15,000, reduced by the sum of: The additional pre-tax elective deferrals made in earlier years because of this rule, plus The aggregate amount of designated Roth contributions permitted for prior tax years because of this rule, or $5,000 times the number of your years of service for the organization, minus the total elective deferrals made by your employer on your behalf for earlier years. E file state income tax   If you qualify for the 15-year rule, your elective deferrals under this limit can be as high as $20,500 for 2013. E file state income tax   For more information, see Publication 571. E file state income tax Limit for deferral under section 501(c)(18) plans. E file state income tax   If you are a participant in a section 501(c)(18) plan (a trust created before June 25, 1959, funded only by employee contributions), you should have deferred no more than the lesser of $7,000 or 25% of your compensation. E file state income tax Amounts you defer under a section 501(c)(18) plan count toward the overall limit ($17,500 in 2013) and may affect the amount you can defer under other elective deferral plans. E file state income tax Limit for deferrals under section 457 plans. E file state income tax   If you are a participant in a section 457 plan (a deferred compensation plan for employees of state or local governments or tax-exempt organizations), you should have deferred no more than the lesser of your includible compensation or $17,500 in 2013. E file state income tax However, if you are within 3 years of normal retirement age, you may be allowed an increased limit if the plan allows it. E file state income tax See Increased limit , later. E file state income tax Includible compensation. E file state income tax   This is the pay you received for the year from the employer who maintained the section 457 plan. E file state income tax In most cases, it includes all the following payments. E file state income tax Wages and salaries. E file state income tax Fees for professional services. E file state income tax The value of any employer-provided qualified transportation fringe benefit (defined under Transportation , earlier) that is not included in your income. E file state income tax Other amounts received (cash or noncash) for personal services you performed, including, but not limited to, the following items. E file state income tax Commissions and tips. E file state income tax Fringe benefits. E file state income tax Bonuses. E file state income tax Employer contributions (elective deferrals) to: The section 457 plan. E file state income tax Qualified cash or deferred arrangements (section 401(k) plans) that are not included in your income. E file state income tax A salary reduction simplified employee pension (SARSEP). E file state income tax A tax-sheltered annuity (section 403(b) plan). E file state income tax A savings incentive match plan for employees (SIMPLE plan). E file state income tax A section 125 cafeteria plan. E file state income tax   Instead of using the amounts listed earlier to determine your includible compensation, your employer can use any of the following amounts. E file state income tax Your wages as defined for income tax withholding purposes. E file state income tax Your wages as reported in box 1 of Form W-2. E file state income tax Your wages that are subject to social security withholding (including elective deferrals). E file state income tax Increased limit. E file state income tax   During any, or all, of the last 3 years ending before you reach normal retirement age under the plan, your plan may provide that your limit is the lesser of: Twice the annual limit ($35,000 for 2013), or The basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50 or over catch-up contributions). E file state income tax Catch-up contributions. E file state income tax   You generally can have additional elective deferrals made to your governmental section 457 plan if: You reached age 50 by the end of the year, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions. E file state income tax If you qualify, your limit can be the lesser of your includible compensation or $17,500, plus $5,500. E file state income tax However, if you are within 3 years of retirement age and your plan provides the increased limit, discussed earlier, that limit may be higher. E file state income tax Designated Roth contributions. E file state income tax   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. E file state income tax Designated Roth contributions are treated as elective deferrals, except that they are included in income. E file state income tax Your retirement plan must maintain separate accounts and recordkeeping for the designated Roth contributions. E file state income tax   Qualified distributions from a Roth plan are not included in income. E file state income tax In most cases, a distribution made before the end of the 5-tax-year period beginning with the first tax year for which you made a designated Roth contribution to the plan is not a qualified distribution. E file state income tax Reporting by employer. E file state income tax   Your employer generally should not include elective deferrals in your wages in box 1 of Form W-2. E file state income tax Instead, your employer should mark the Retirement plan checkbox in box 13 and show the total amount deferred in box 12. E file state income tax Section 501(c)(18)(D) contributions. E file state income tax   Wages shown in box 1 of your Form W-2 should not have been reduced for contributions you made to a section 501(c)(18)(D) retirement plan. E file state income tax The amount you contributed should be identified with code “H” in box 12. E file state income tax You may deduct the amount deferred subject to the limits that apply. E file state income tax Include your deduction in the total on Form 1040, line 36. E file state income tax Enter the amount and “501(c)(18)(D)” on the dotted line next to line 36. E file state income tax Designated Roth contributions. E file state income tax    These contributions are elective deferrals but are included in your wages in box 1 of Form W-2. E file state income tax Designated Roth contributions to a section 401(k) plan are reported using code AA in box 12, or, for section 403(b) plans, code BB in box 12. E file state income tax Excess deferrals. E file state income tax   If your deferrals exceed the limit, you must notify your plan by the date required by the plan. E file state income tax If the plan permits, the excess amount will be distributed to you. E file state income tax If you participate in more than one plan, you can have the excess paid out of any of the plans that permit these distributions. E file state income tax You must notify each plan by the date required by that plan of the amount to be paid from that particular plan. E file state income tax The plan then must pay you the amount of the excess, along with any income earned on that amount, by April 15 of the following year. E file state income tax   You must include the excess deferral in your income for the year of the deferral unless you have an excess deferral of a designated Roth contribution. E file state income tax File Form 1040 to add the excess deferral amount to your wages on line 7. E file state income tax Do not use Form 1040A or Form 1040EZ to report excess deferral amounts. E file state income tax Excess not distributed. E file state income tax   If you do not take out the excess amount, you cannot include it in the cost of the contract even though you included it in your income. E file state income tax Therefore, you are taxed twice on the excess deferral left in the plan—once when you contribute it, and again when you receive it as a distribution. E file state income tax Excess distributed to you. E file state income tax   If you take out the excess after the year of the deferral and you receive the corrective distribution by April 15 of the following year, do not include it in income again in the year you receive it. E file state income tax If you receive it later, you must include it in income in both the year of the deferral and the year you receive it. E file state income tax Any income on the excess deferral taken out is taxable in the tax year in which you take it out. E file state income tax If you take out part of the excess deferral and the income on it, allocate the distribution proportionately between the excess deferral and the income. E file state income tax    You should receive a Form 1099-R for the year in which the excess deferral is distributed to you. E file state income tax Use the following rules to report a corrective distribution shown on Form 1099-R for 2013. E file state income tax If the distribution was for a 2013 excess deferral, your Form 1099-R should have the code “8” in box 7. E file state income tax Add the excess deferral amount to your wages on your 2013 tax return. E file state income tax If the distribution was for a 2013 excess deferral to a designated Roth account, your Form 1099-R should have code “B” in box 7. E file state income tax Do not add this amount to your wages on your 2013 return. E file state income tax If the distribution was for a 2012 excess deferral, your Form 1099-R should have the code “P” in box 7. E file state income tax If you did not add the excess deferral amount to your wages on your 2012 tax return, you must file an amended return on Form 1040X, Amended U. E file state income tax S. E file state income tax Individual Income Tax Return. E file state income tax If you did not receive the distribution by April 15, 2013, you also must add it to your wages on your 2013 tax return. E file state income tax If the distribution was for the income earned on an excess deferral, your Form 1099-R should have the code “8” in box 7. E file state income tax Add the income amount to your wages on your 2013 income tax return, regardless of when the excess deferral was made. E file state income tax Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. E file state income tax Include the loss as a negative amount on Form 1040, line 21 and identify it as “Loss on Excess Deferral Distribution. E file state income tax ”    Even though a corrective distribution of excess deferrals is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. E file state income tax It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. E file state income tax Excess Contributions If you are a highly compensated employee, the total of your elective deferrals and other contributions made for you for any year under a section 401(k) plan or SARSEP can be, as a percentage of pay, no more than 125% of the average deferral percentage (ADP) of all eligible non-highly compensated employees. E file state income tax If the total contributed to the plan is more than the amount allowed under the ADP test, the excess contributions must be either distributed to you or recharacterized as after-tax employee contributions by treating them as distributed to you and then contributed by you to the plan. E file state income tax You must include the excess contributions in your income as wages on Form 1040, line 7. E file state income tax You cannot use Form 1040A or Form 1040EZ to report excess contribution amounts. E file state income tax If you receive a corrective distribution of excess contributions (and allocable income), it is included in your income in the year of the distribution. E file state income tax The allocable income is the amount of gain or loss through the end of the plan year for which the contribution was made that is allocable to the excess contributions. E file state income tax You should receive a Form 1099-R for the year the excess contributions are distributed to you. E file state income tax Add the distribution to your wages for that year. E file state income tax Even though a corrective distribution of excess contributions is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. E file state income tax It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. E file state income tax Excess Annual Additions The amount contributed in 2013 to a defined contribution plan is generally limited to the lesser of 100% of your compensation or $51,000. E file state income tax Under certain circumstances, contributions that exceed these limits (excess annual additions) may be corrected by a distribution of your elective deferrals or a return of your after-tax contributions and earnings from these contributions. E file state income tax A corrective payment of excess annual additions consisting of elective deferrals or earnings from your after-tax contributions is fully taxable in the year paid. E file state income tax A corrective payment consisting of your after-tax contributions is not taxable. E file state income tax If you received a corrective payment of excess annual additions, you should receive a separate Form 1099-R for the year of the payment with the code “E” in box 7. E file state income tax Report the total payment shown in box 1 of Form 1099-R on line 16a of Form 1040 or line 12a of Form 1040A. E file state income tax Report the taxable amount shown in box 2a of Form 1099-R on line 16b of Form 1040 or line 12b of Form 1040A. E file state income tax Even though a corrective distribution of excess annual additions is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. E file state income tax It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. E file state income tax Stock Options If you receive an option to buy or sell stock or other property as payment for your services, you may have income when you receive the option (the grant), when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option or property acquired through exercise of the option. E file state income tax The timing, type, and amount of income inclusion depend on whether you receive a nonstatutory stock option or a statutory stock option. E file state income tax Your employer can tell you which kind of option you hold. E file state income tax Nonstatutory Stock Options Grant of option. E file state income tax   If you are granted a nonstatutory stock option, you may have income when you receive the option. E file state income tax The amount of income to include and the time to include it depend on whether the fair market value of the option can be readily determined. E file state income tax The fair market value of an option can be readily determined if it is actively traded on an established market. E file state income tax    The fair market value of an option that is not traded on an established market can be readily determined only if all of the following conditions exist. E file state income tax You can transfer the option. E file state income tax You can exercise the option immediately in full. E file state income tax The option or the property subject to the option is not subject to any condition or restriction (other than a condition to secure payment of the purchase price) that has a significant effect on the fair market value of the option. E file state income tax The fair market value of the option privilege can be readily determined. E file state income tax The option privilege for an option to buy is the opportunity to benefit during the option's exercise period from any increase in the value of property subject to the option without risking any capital. E file state income tax For example, if during the exercise period the fair market value of stock subject to an option is greater than the option's exercise price, a profit may be realized by exercising the option and immediately selling the stock at its higher value. E file state income tax The option privilege for an option to sell is the opportunity to benefit during the exercise period from a decrease in the value of the property subject to the option. E file state income tax If you or a member of your family is an officer, director, or more-than-10% owner of an expatriated corporation, you may owe an excise tax on the value of nonstatutory options and other stock-based compensation from that corporation. E file state income tax For more information on the excise tax, see Internal Revenue Code section 4985. E file state income tax Option with readily determinable value. E file state income tax   If you receive a nonstatutory stock option that has a readily determinable fair market value at the time it is granted to you, the option is treated like other property received as compensation. E file state income tax See Restricted Property , later, for rules on how much income to include and when to include it. E file state income tax However, the rule described in that discussion for choosing to include the value of property in your income for the year of the transfer does not apply to a nonstatutory option. E file state income tax Option without readily determinable value. E file state income tax   If the fair market value of the option is not readily determinable at the time it is granted to you (even if it is determined later), you do not have income until you exercise or transfer the option. E file state income tax    Exercise or transfer of option. E file state income tax   When you exercise a nonstatutory stock option, the amount to include in your income depends on whether the option had a readily determinable value. E file state income tax Option with readily determinable value. E file state income tax   When you exercise a nonstatutory stock option that had a readily determinable value at the time the option was granted, you do not have to include any amount in income. E file state income tax Option without readily determinable value. E file state income tax   When you exercise a nonstatutory stock option that did not have a readily determinable value at the time the option was granted, the restricted prope
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The E File State Income Tax

E file state income tax Publication 536 - Introductory Material Table of Contents Reminders IntroductionOrdering forms and publications. E file state income tax Tax questions. E file state income tax Useful Items - You may want to see: Reminders Future developments. E file state income tax  For the latest developments related to Publication 536, such as legislation enacted after we release it, go to www. E file state income tax irs. E file state income tax gov/pub536. E file state income tax Photographs of missing children. E file state income tax  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. E file state income tax Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. E file state income tax You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. E file state income tax Introduction If your deductions for the year are more than your income for the year, you may have a net operating loss (NOL). E file state income tax An NOL year is the year in which an NOL occurs. E file state income tax You can use an NOL by deducting it from your income in another year or years. E file state income tax What this publication covers. E file state income tax   This publication discusses NOLs for individuals, estates, and trusts. E file state income tax It covers: How to figure an NOL, When to use an NOL, How to claim an NOL deduction, and How to figure an NOL carryover. E file state income tax To have an NOL, your loss must generally be caused by deductions from your: Trade or business, Work as an employee, Casualty and theft losses, Moving expenses, or Rental property. E file state income tax A loss from operating a business is the most common reason for an NOL. E file state income tax Partnerships and S corporations generally cannot use an NOL. E file state income tax However, partners or shareholders can use their separate shares of the partnership's or S corporation's business income and business deductions to figure their individual NOLs. E file state income tax Keeping records. E file state income tax   You should keep records for any tax year that generates an NOL for 3 years after you have used the carryback/carryforward or 3 years after the carryforward expires. E file state income tax    You should attach all required documents to the Form 1045 or Form 1040X. E file state income tax For details, see the instructions for Form 1045 or Form 1040X. E file state income tax What is not covered in this publication?   The following topics are not covered in this publication. E file state income tax Bankruptcies. E file state income tax See Publication 908, Bankruptcy Tax Guide. E file state income tax NOLs of corporations. E file state income tax See Publication 542, Corporations. E file state income tax Section references. E file state income tax   Section references are to the Internal Revenue Code unless otherwise noted. E file state income tax Comments and suggestions. E file state income tax   We welcome your comments about this publication and your suggestions for future editions. E file state income tax   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. E file state income tax NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. E file state income tax Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. E file state income tax   You can send your comments from www. E file state income tax irs. E file state income tax gov/formspubs/. E file state income tax Click on “More Information. E file state income tax ” and then on “Comment on Tax Forms and Publications. E file state income tax ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. E file state income tax Ordering forms and publications. E file state income tax   Visit www. E file state income tax irs. E file state income tax gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. E file state income tax Internal Revenue Service 1201 N. E file state income tax Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. E file state income tax   If you have a tax question, check the information available on IRS. E file state income tax gov or call 1-800-829-1040. E file state income tax We cannot answer tax questions sent to either of the above addresses. E file state income tax Useful Items - You may want to see: Form (and Instructions) 1040X Amended U. E file state income tax S. E file state income tax Individual Income Tax Return 1045 Application for Tentative Refund   See How To Get Tax Help near the end of this publication for information about getting these forms. E file state income tax Prev  Up  Next   Home   More Online Publications