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E File State Tax

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E File State Tax

E file state tax Listed Property Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Listed Property DefinedPassenger Automobile Defined Dwelling Unit Other Property Used for Transportation Computers and Related Peripheral Equipment Predominant Use TestMeeting the Predominant Use Test Qualified Business Use Method of Allocating Use Applying the Predominant Use Test Deductions After Recovery Period Leased PropertyLessor Lessee What Records Must Be KeptAdequate Records Reporting Information on Form 4562 Deductions in Later Years Appendix Topics - This chapter discusses: Listed property defined The predominant use test What records must be kept Useful Items - You may want to see: Publication 463 Travel, Entertainment, and Gift Expenses 587 Business Use of Your Home (Including Use by Day-Care Providers) 917 Business Use of a Car 946 How To Depreciate Property Form (and Instructions) 2106–EZ Unreimbursed Employee Business Expenses 2106 Employee Business Expenses 4255 Recapture of Investment Credit 4562 Depreciation and Amortization This chapter discusses some special rules and recordkeeping requirements for listed property. E file state tax For complete coverage of the rules, including the rules concerning passenger automobiles, see Publication 946. E file state tax If listed property is not used predominantly (more than 50%) in a qualified business use as discussed inPredominant Use Test, later, the section 179 deduction is not allowable and the property must be depreciated using the straight line method. E file state tax Listed Property Defined Listed property is any of the following: Any passenger automobile (defined later), Any other property used for transportation, Any property of a type generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video recording equipment), Any computer and related peripheral equipment, defined later, unless it is used only at a regular business establishment and owned or leased by the person operating the establishment. E file state tax A regular business establishment includes a portion of a dwelling unit (defined later), if, and only if, that portion is used both regularly and exclusively for business as discussed in Publication 587. E file state tax Any cellular telephone (or similar telecommunication equipment) placed in service or leased in a tax year beginning after 1989. E file state tax Passenger Automobile Defined A passenger automobile is any four-wheeled vehicle made primarily for use on public streets, roads, and highways and rated at 6,000 pounds or less of unloaded gross vehicle weight (at 6,000 pounds or less of gross vehicle weight for trucks and vans). E file state tax It includes any part, component, or other item physically attached to the automobile or usually included in the purchase price of an automobile. E file state tax A passenger automobile does not include: An ambulance, hearse, or combination ambulance-hearse used directly in a trade or business, and A vehicle used directly in the trade or business of transporting persons or property for compensation or hire. E file state tax Dwelling Unit A dwelling unit is a house or apartment used to provide living accommodations in a building or structure. E file state tax It does not include a unit in a hotel, motel, inn, or other establishment where more than half the units are used on a transient basis. E file state tax Other Property Used for Transportation Other property used for transportation includes trucks, buses, boats, airplanes, motorcycles, and any other vehicles for transporting persons or goods. E file state tax Listed property does not include: Any vehicle which, by reason of its design, is not likely to be used more than a minimal amount for personal purposes, such as clearly marked police and fire vehicles, ambulances, or hearses used for those purposes, Any vehicle that is designed to carry cargo and that has a loaded gross vehicle weight over 14,000 pounds, bucket trucks (cherry pickers), cement mixers, combines, cranes and derricks, delivery trucks with seating only for the driver (or only for the driver plus a folding jump seat), dump trucks (including garbage trucks), flatbed trucks, forklifts, qualified moving vans, qualified specialized utility repair trucks, and refrigerated trucks, Any passenger bus used for that purpose with a capacity of at least 20 passengers and school buses, Any tractor or other special purpose farm vehicle, and unmarked vehicles used by law enforcement officers if the use is officially authorized, and Any vehicle, such as a taxicab, if substantially all its use is in the trade or business of providing services to transport persons or property for compensation or hire by unrelated persons. E file state tax Computers and Related Peripheral Equipment A computer is a programmable electronically activated device that: Is capable of accepting information, applying prescribed processes to the information, and supplying the results of those processes with or without human intervention, and Consists of a central processing unit with extensive storage, logic, arithmetic, and control capabilities. E file state tax Related peripheral equipment is any auxiliary machine which is designed to be controlled by the central processing unit of a computer. E file state tax Computer or peripheral equipment does not include: Any equipment which is an integral part of property which is not a computer, Typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment, and Equipment of a kind, used primarily for the user's amusement or entertainment, such as video games. E file state tax Predominant Use Test If “listed property,” defined earlier, placed in service after June 18, 1984, is not used predominantly (more than 50%) in a qualified business use during any tax year: The section 179 deduction on the property is not allowable, and You must depreciate the property using the straight line method. E file state tax Listed property placed in service before 1987. E file state tax   For listed property placed in service before 1987, depreciate the property over the following period: Class of Property Listed Property Recovery Period 3-year property 5 years 5-year property 12 years 10-year property 25 years 18-year real property 40 years 19-year real property 40 years If you must use the above recovery periods for listed property not used predominantly in a trade or business, use the percentages from Table 16 titled Listed Property Not Used Predominantly (Other Than 18- or 19-year Real Property), and Table 17 for 18- or 19-year real property, near the end of this publication in the Appendix. E file state tax Listed property placed in service after 1986. E file state tax   For information on listed property placed in service after 1986, see Publication 946. E file state tax Meeting the Predominant Use Test Listed property meets the predominant use test for any tax year if its business use is more than 50% of its total use. E file state tax You must allocate the use of any item of listed property used for more than one purpose during the tax year among its various uses. E file state tax The percentage of investment use of listed property cannot be used as part of the percentage of qualified business use to meet the predominant use test. E file state tax However, the combined total of business and investment use is taken into account to figure your depreciation deduction for the property. E file state tax Note: Property does not stop being predominantly used in a qualified business use because of a transfer at death. E file state tax Example. E file state tax Sarah Bradley uses a home computer 50% of the time to manage her investments. E file state tax She also uses the computer 40% of the time in her part-time consumer research business. E file state tax Sarah's home computer is listed property because it is not used at a regular business establishment. E file state tax Because her business use of the computer does not exceed 50%, the computer is not predominantly used in a qualified business use for the tax year. E file state tax Because she does not meet the predominant use test, she cannot elect a section 179 deduction for this property. E file state tax Her combined rate of business/investment use for determining her depreciation deduction is 90%. E file state tax Qualified Business Use A qualified business use is any use in your trade or business. E file state tax However, it does not include: The use of property held merely to produce income (investment use), The leasing of property to any 5% owner or related person (to the point that the property is used by a 5% owner or person related to the owner or lessee of the property), The use of property as compensation for the performance of services by a 5% owner or related person, or The use of property as compensation for the performance of services by any person (other than a5% owner or related person) unless the value of the use is included in that person's gross income for the use of the property and income tax is withheld on that amount where required. E file state tax See Employees, later. E file state tax 5% owner. E file state tax   A 5% owner of a business, other than a corporation, is any person who owns more than 5% of the capital or profits interest in the business. E file state tax   A 5% owner of a corporation is any person who owns, or is considered to own: More than 5% of the outstanding stock of the corporation, or Stock possessing more than 5% of the total combined voting power of all stock in the corporation. E file state tax Related person. E file state tax   A related person is anyone related to a taxpayer as discussed under Related persons, in chapter 2 under Nonqualifying Property in Publication 946. E file state tax Entertainment Use The use of listed property for entertainment, recreation, or amusement purposes is treated as a qualified business use only to the extent that expenses (other than interest and property tax expenses) for its use are deductible as ordinary and necessary business expenses. E file state tax See Publication 463. E file state tax Leasing or Compensatory Use of Aircraft If at least 25% of the total use of any aircraft during the tax year is for a qualified business use, the leasing or compensatory use of the aircraft by a 5% owner or related person is treated as a qualified business use. E file state tax Commuting The use of a vehicle for commuting is not business use, regardless of whether work is performed during the trip. E file state tax Use of Your Passenger Automobile by Another Person If someone else uses your automobile, that use is not business use unless: That use is directly connected with your business, The value of the use is property reported by you as income to the other person and tax is withheld on the income where required, or The value of the use results in a payment of fair market rent. E file state tax Any payment to you for the use of the automobile is treated as a rent payment for 3). E file state tax Employees Any use by an employee of his or her own listed property (or listed property rented by an employee) in performing services as an employee is not business use unless: The use is for the employer's convenience, and The use is required as a condition of employment. E file state tax Use for the employer's convenience. E file state tax   Whether the use of listed property is for the employer's convenience must be determined from all the facts. E file state tax The use is for the employer's convenience if it is for a substantial business reason of the employer. E file state tax The use of listed property during the employee's regular working hours to carry on the employer's business is generally for the employer's convenience. E file state tax Use required as a condition of employment. E file state tax   Whether the use of listed property is a condition of employment depends on all the facts and circumstances. E file state tax The use of property must be required for the employee to perform duties properly. E file state tax The employer need not explicitly require the employee to use the property. E file state tax A mere statement by the employer that the use of the property is a condition of employment is not sufficient. E file state tax Example 1. E file state tax Virginia Sycamore is employed as a courier with We Deliver which provides local courier services. E file state tax She owns and uses a motorcycle to deliver packages to downtown offices. E file state tax We Deliver explicitly requires all delivery persons to own a small car or motorcycle for use in their employment. E file state tax The company reimburses delivery persons for their costs. E file state tax Virginia's use of the motorcycle is for the convenience of We Deliver and is required as a condition of employment. E file state tax Example 2. E file state tax Bill Nelson is an inspector for Uplift, a construction company with many sites in the local area. E file state tax He must travel to these sites on a regular basis. E file state tax Uplift does not furnish an automobile or explicitly require him to use his own automobile. E file state tax However, it reimburses him for any costs he incurs in traveling to the various sites. E file state tax The use of his own automobile or a rental automobile is for the convenience of Uplift and is required as a condition of employment. E file state tax Method of Allocating Use For passenger automobiles and other means of transportation, allocate the property's use on the basis of mileage. E file state tax You determine the percentage of qualified business use by dividing the number of miles the vehicle is driven for business purposes during the year by the total number of miles the vehicle is driven for all purposes (including business miles) during the year. E file state tax For other items of listed property, allocate the property's use on the basis of the most appropriate unit of time. E file state tax For example, you can determine the percentage of business use of a computer by dividing the number of hours the computer is used for business purposes during the year by the total number of hours the computer is used for all purposes (including business hours) during the year. E file state tax Applying the Predominant Use Test You must apply the predominant use test for an item of listed property each year of the recovery period. E file state tax First Recovery Year If any item of listed property is not used predominantly in a qualified business use in the year it is placed in service: The property is not eligible for a section 179 deduction, and The depreciation deduction must be figured using the straight line method. E file state tax Note: The required use of the straight line method for an item of listed property that does not meet the predominant use test is not the same as electing the straight line method. E file state tax It does not mean that you have to use the straight line method for other property in the same class as the item of listed property. E file state tax Years After the First Recovery Year If you use listed property predominantly (more than 50%) in a qualified business use in the tax year you place it in service, but not in a subsequent tax year during the recovery period, the following rules apply: Figure depreciation using the straight line method. E file state tax Do this for each year, beginning with the year you no longer use the property predominantly in a qualified business use, and Figure any excess depreciation on the property and add it to: Your gross income, and The adjusted basis of your property. E file state tax See Recapture of excess depreciation, next. E file state tax Recapture of excess depreciation. E file state tax   You must include any excess depreciation in your gross income for the first tax year the property is not predominantly used in a qualified business use. E file state tax Any excess depreciation must also be added to the adjusted basis of your property. E file state tax Excess depreciation is the excess (if any) of: The amount of depreciation allowable for the property (including any section 179 deduction claimed) for tax years before the first tax year the property was not predominantly used in a qualified business use, over The amount of depreciation that would have been allowable for those years if the property were not used predominantly in a qualified business use for the year it was placed in service. E file state tax This means you figure your depreciation using the percentages fromTable 16 or 17. E file state tax For information on investment credit recapture, see the instructions for Form 4255. E file state tax Deductions After Recovery Period When listed property (other than passenger automobiles) is used for business, investment, and personal purposes, no deduction is ever allowable for the personal use. E file state tax In tax years after the recovery period, you must determine if there is any unrecovered basis remaining before you compute the depreciation deduction for that tax year. E file state tax To make this determination, figure the depreciation for earlier tax years as if your property were used 100% for business or investment purposes, beginning with the first tax year in which some or all use is for business or investment. E file state tax See Car Used 50% or Less for Business in Publication 917. E file state tax Leased Property The limitations on cost recovery deductions apply to the rental of listed property. E file state tax The following discussion covers the rules that apply to the lessor (the owner of the property) and the lessee (the person who rents the property from the owner). E file state tax SeeLeasing a Car in Publication 917 for a discussion of leased passenger automobiles. E file state tax Lessor The limitations on cost recovery generally do not apply to any listed property leased or held for leasing by anyone regularly engaged in the business of leasing listed property. E file state tax A person is considered regularly engaged in the business of leasing listed property only if contracts for leasing of listed property are entered into with some frequency over a continuous period of time. E file state tax This determination is made on the basis of the facts and circumstances in each case and takes into account the nature of the person's business in its entirety. E file state tax Occasional or incidental leasing activity is insufficient. E file state tax For example, a person leasing only one passenger automobile during a tax year is not regularly engaged in the business of leasing automobiles. E file state tax An employer who allows an employee to use the employer's property for personal purposes and charges the employee for the use is not regularly engaged in the business of leasing the property used by the employee. E file state tax Lessee A lessee of listed property (other than passenger automobiles), must include an amount in gross income called the inclusion amount for the first tax year the property is not used predominantly in a qualified business use. E file state tax Inclusion amount for property leased before 1987. E file state tax   You determine the inclusion amount for property leased after June 18, 1984 and before 1987 by multiplying the fair market value of the property by both the average business/investment use percentage and the applicable percentage. E file state tax You can find the applicable percentages for listed property that is 5- or 10-year recovery property in Tables 19 or 20 in Appendix A of Publication 946. E file state tax   The lease term for listed property other than 18- or 19-year real property, and residential rental or nonresidential real property, includes options to renew. E file state tax For 18- or 19-year real property and residential rental or nonresidential real property that is listed property, the period of the lease does not include any option to renew at fair market value, determined at the time of renewal. E file state tax You treat two or more successive leases that are part of the same transaction (or a series of related transactions) for the same or substantially similar property as one lease. E file state tax Special rules. E file state tax   The lessee adds the inclusion amount to gross income in the next tax year if: The lease term begins within 9 months before the close of the lessee's tax year, The lessee does not use the property predominantly in a qualified business use during that portion of the tax year, and The lease term continues into the lessee's next tax year. E file state tax The lessee determines the inclusion amount by taking into account the average of the business/investment use for both tax years and the applicable percentage for the tax year the lease term begins. E file state tax   If the lease term is less than one year, the amount included in gross income is the amount that bears the same ratio to the additional inclusion amount as the number of days in the lease term bears to 365. E file state tax Maximum inclusion amount. E file state tax   The inclusion amount cannot be more than the sum of the deductible amounts of rent allocable to the lessee's tax year in which the amount must be included in gross income. E file state tax What Records Must Be Kept You cannot take any depreciation or section 179 deduction for the use of listed property (including passenger automobiles) unless you can prove business/investment use with adequate records or sufficient evidence to support your own statements. E file state tax How long to keep records. E file state tax   For listed property, records must be kept for as long as any excess depreciation can be recaptured (included in income). E file state tax Adequate Records To meet the adequate records requirement, you must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or other documentary evidence that, together with the receipt, is sufficient to establish each element of an expenditure or use. E file state tax It is not necessary to record information in an account book, diary, or similar record if the information is already shown on the receipt. E file state tax However, your records should back up your receipts in an orderly manner. E file state tax Elements of Expenditure or Use The records or other documentary evidence must support: The amount of each separate expenditure, such as the cost of acquiring the item, maintenance and repair costs, capital improvement costs, lease payments, and any other expenses, The amount of each business and investment use (based on an appropriate measure, such as mileage for vehicles and time for other listed property), and the total use of the property for the tax year, The date of the expenditure or use, and The business or investment purpose for the expenditure or use. E file state tax Written documents of your expenditure or use are generally better evidence than oral statements alone. E file state tax A written record prepared at or near the time of the expenditure or use has greater value as proof of the expenditure or use. E file state tax A daily log is not required. E file state tax However, some type of record containing the elements of an expenditure or the business or investment use of listed property made at or near the time and backed up by other documents is preferable to a statement prepared later. E file state tax Timeliness The elements of an expenditure or use must be recorded at the time you have full knowledge of the elements. E file state tax An expense account statement made from an account book, diary, or similar record prepared or maintained at or near the time of the expenditure or use is generally considered a timely record if in the regular course of business: The statement is submitted by an employee to the employer, or The statement is submitted by an independent contractor to the client or customer. E file state tax For example, a log maintained on a weekly basis, which accounts for use during the week, will be considered a record made at or near the time of use. E file state tax Business Purpose Supported An adequate record of business purpose must generally be in the form of a written statement. E file state tax However, the amount of backup necessary to establish a business purpose depends on the facts and circumstances of each case. E file state tax A written explanation of the business purpose will not be required if the purpose can be determined from the surrounding facts and circumstances. E file state tax For example, a salesperson visiting customers on an established sales route will not normally need a written explanation of the business purpose of his or her travel. E file state tax Business Use Supported An adequate record contains enough information on each element of every business or investment use. E file state tax The amount of detail required to support the use depends on the facts and circumstances. E file state tax For example, a taxpayer whose only business use of a truck is to make customer deliveries on an established route can satisfy the requirement by recording the length of the route, including the total number of miles driven during the tax year and the date of each trip at or near the time of the trips. E file state tax Although an adequate record generally must be written, a record of the business use of listed property, such as a computer or automobile, can be prepared in a computer memory device using a logging program. E file state tax Separate or Combined Expenditures or Uses Each use by you is normally considered a separate use. E file state tax However, repeated uses can be combined as a single item. E file state tax Each expenditure is recorded as a separate item and not combined with other expenditures. E file state tax If you choose, however, amounts spent for the use of listed property during a tax year, such as for gasoline or automobile repairs, can be combined. E file state tax If these expenses are combined, you do not need to support the business purpose of each expense. E file state tax Instead, you can divide the expenses based on the total business use of the listed property. E file state tax Uses which can be considered part of a single use, such as a round trip or uninterrupted business use, can be accounted for by a single record. E file state tax For example, use of a truck to make deliveries at several locations which begin and end at the business premises and can include a stop at the business in between deliveries can be accounted for by a single record of miles driven. E file state tax Use of a passenger automobile by a salesperson for a business trip away from home over a period of time can be accounted for by a single record of miles traveled. E file state tax Minimal personal use (such as a stop for lunch between two business stops) is not an interruption of business use. E file state tax Confidential Information If any of the information on the elements of an expenditure or use is confidential, it does not need to be in the account book or similar record if it is recorded at or near the time of the expenditure or use. E file state tax It must be kept elsewhere and made available as support to the district director on request. E file state tax Substantial Compliance If you have not fully supported a particular element of an expenditure or use, but have complied with the adequate records requirement for the expenditure or use to the district director's satisfaction, you can establish this element by any evidence the district director deems adequate. E file state tax If you fail to establish that you have substantially complied with the adequate records requirement for an element of an expenditure or use to the district director's satisfaction, you must establish the element: By your own oral or written statement containing detailed information as to the element, and By other evidence sufficient to establish the element. E file state tax If the element is the cost or amount, time, place, or date of an expenditure or use, its supporting evidence must be direct, such as oral testimony by witnesses or a written statement setting forth detailed information about the element or the documentary evidence. E file state tax If the element is the business purpose of an expenditure, its supporting evidence can be circumstantial evidence. E file state tax Sampling You can maintain an adequate record for portions of a tax year and use that record to support your business and investment use for the entire tax year if it can be shown by other evidence that the periods for which an adequate record is maintained are representative of use throughout the year. E file state tax Loss of Records When you establish that failure to produce adequate records is due to loss of the records through circumstances beyond your control, such as through fire, flood, earthquake, or other casualty, you have the right to support a deduction by reasonable reconstruction of your expenditures and use. E file state tax Reporting Information on Form 4562 If you claim a deduction for any listed property, you must provide the requested information on page 2, Section B of Form 4562. E file state tax If you claim a deduction for any vehicle, you must answer certain questions onpage 2 of Form 4562 to provide information about the vehicle use. E file state tax Employees. E file state tax   Employees claiming the standard mileage rate or actual expenses (including depreciation) must use Form 2106 instead of Part V of Form 4562. E file state tax Employees claiming the standard mileage rate may be able to use Form 2106–EZ. E file state tax Employer who provides vehicles to employees. E file state tax   An employer who provides vehicles to employees must obtain enough information from those employees to provide the requested information onForm 4562. E file state tax   An employer who provides more than five vehicles to employees need not include any information on his or her tax return. E file state tax Instead, the employer must obtain the information from his or her employees and indicate on his or her return that the information was obtained and is being retained. E file state tax   You do not need to provide the information requested on page 2 of Form 4562 if, as an employer: You can satisfy the requirements of a written policy statement for vehicles either not used for personal purposes, or not used for personal purposes other than commuting, or You treat all vehicle use by employees as personal use. E file state tax See the instructions for Form 4562. E file state tax Deductions in Later Years When listed property is used for business, investment, and personal purposes, no deduction is allowable for its personal use either in the current year or any later tax year. E file state tax In later years, you must determine if there is any remaining unadjusted or unrecovered basis before you compute the depreciation deduction for that tax year. E file state tax In making this determination, figure the depreciation deductions for earlier tax years as if the listed property were used 100% for business or investment purposes in those years, beginning with the first tax year in which some or all of the property use is for business or investment. E file state tax For more information about deductions after the recovery period for automobiles, see Publication 917. E file state tax Appendix The following tables are for use in figuring depreciation deductions under the ACRS system. E file state tax Table 1. E file state tax 15-Year Real Property* (Other Than Low-Inclome Housing) Table 3. E file state tax Low-Income Housing* Table 6 - Table 9 Table 6 - Table 9 Table 10 - Table 13 Table 14 - Table 17 Prev  Up  Next   Home   More Online Publications
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The E File State Tax

E file state tax 33. E file state tax   Credit for the Elderly or the Disabled Table of Contents Introduction Useful Items - You may want to see: Are You Eligible for the Credit?Qualified Individual Income Limits How to Claim the CreditCredit Figured for You Credit Figured by You Introduction If you qualify, you may be able to reduce the tax you owe by taking the credit for the elderly or the disabled which is figured on Schedule R (Form 1040A or 1040). E file state tax This chapter explains the following. E file state tax Who qualifies for the credit for the elderly or the disabled. E file state tax How to claim the credit. E file state tax You may be able to take the credit for the elderly or the disabled if: You are age 65 or older at the end of 2013, or You retired on permanent and total disability and have taxable disability income. E file state tax Useful Items - You may want to see: Publication 524 Credit for the Elderly or the Disabled 554 Tax Guide for Seniors Form (and Instruction) Schedule R (Form 1040A or 1040) Credit for the Elderly or the Disabled Are You Eligible for the Credit? You can take the credit for the elderly or the disabled if you meet both of the following requirements. E file state tax You are a qualified individual. E file state tax Your income is not more than certain limits. E file state tax You can use Figure 33-A and Table 33-1 as guides to see if you are eligible for the credit. E file state tax Use Figure 33-A first to see if you are a qualified individual. E file state tax If you are, go to Table 33-1 to make sure your income is not too high to take the credit. E file state tax You can take the credit only if you file Form 1040 or Form 1040A. E file state tax You cannot take the credit if you file Form 1040EZ. E file state tax Qualified Individual You are a qualified individual for this credit if you are a U. E file state tax S. E file state tax citizen or resident alien, and either of the following applies. E file state tax You were age 65 or older at the end of 2013. E file state tax You were under age 65 at the end of 2013 and all three of the following statements are true. E file state tax You retired on permanent and total disability (explained later). E file state tax You received taxable disability income for 2013. E file state tax On January 1, 2013, you had not reached mandatory retirement age (defined later under Disability income ). E file state tax Age 65. E file state tax   You are considered to be age 65 on the day before your 65th birthday. E file state tax Therefore, if you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. E file state tax U. E file state tax S. E file state tax Citizen or Resident Alien You must be a U. E file state tax S. E file state tax citizen or resident alien (or be treated as a resident alien) to take the credit. E file state tax Generally, you cannot take the credit if you were a nonresident alien at any time during the tax year. E file state tax Exceptions. E file state tax   You may be able to take the credit if you are a nonresident alien who is married to a U. E file state tax S. E file state tax citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U. E file state tax S. E file state tax resident alien. E file state tax If you make that choice, both you and your spouse are taxed on your worldwide incomes. E file state tax If you were a nonresident alien at the beginning of the year and a resident alien at the end of the year, and you were married to a U. E file state tax S. E file state tax citizen or resident alien at the end of the year, you may be able to choose to be treated as a U. E file state tax S. E file state tax resident alien for the entire year. E file state tax In that case, you may be allowed to take the credit. E file state tax For information on these choices, see chapter 1 of Publication 519, U. E file state tax S. E file state tax Tax Guide for Aliens. E file state tax Married Persons Generally, if you are married at the end of the tax year, you and your spouse must file a joint return to take the credit. E file state tax However, if you and your spouse did not live in the same household at any time during the tax year, you can file either a joint return or separate returns and still take the credit. E file state tax Head of household. E file state tax   You can file as head of household and qualify to take the credit, even if your spouse lived with you during the first 6 months of the year, if you meet certain tests. E file state tax See Head of Household in chapter 2 for the tests you must meet. E file state tax Under Age 65 If you are under age 65 at the end of 2013, you can qualify for the credit only if you are retired on permanent and total disability (discussed next) and have taxable disability income (discussed later under Disability income ). E file state tax You are retired on permanent and total disability if: You were permanently and totally disabled when you retired, and You retired on disability before the close of the tax year. E file state tax Even if you do not retire formally, you may be considered retired on disability when you have stopped working because of your disability. E file state tax If you retired on disability before 1977, and were not permanently and totally disabled at the time, you can qualify for the credit if you were permanently and totally disabled on January 1, 1976, or January 1, 1977. E file state tax Permanent and total disability. E file state tax    You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of your physical or mental condition. E file state tax A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. E file state tax See Physician's statement , later. E file state tax Substantial gainful activity. E file state tax   Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. E file state tax Full-time work (or part-time work done at your employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that you are able to engage in substantial gainful activity. E file state tax   Substantial gainful activity is not work you do to take care of yourself or your home. E file state tax It is not unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. E file state tax However, doing this kind of work may show that you are able to engage in substantial gainful activity. E file state tax    The fact that you have not worked for some time is not, of itself, conclusive evidence that you cannot engage in substantial gainful activity. E file state tax Sheltered employment. E file state tax   Certain work offered at qualified locations to physically or mentally impaired persons is considered sheltered employment. E file state tax These qualified locations are in sheltered workshops, hospitals, and similar institutions, homebound programs, and Department of Veterans Affairs (VA) sponsored homes. E file state tax   Compared to commercial employment, pay is lower for sheltered employment. E file state tax Therefore, one usually does not look for sheltered employment if he or she can get other employment. E file state tax The fact that one has accepted sheltered employment is not proof of the person's ability to engage in substantial gainful activity. E file state tax Physician's statement. E file state tax   If you are under age 65, you must have your physician complete a statement certifying that you were permanently and totally disabled on the date you retired. E file state tax You can use the statement in the Instructions for Schedule R. E file state tax    Figure 33-A. E file state tax Are You a Qualified Individual? This image is too large to be displayed in the current screen. E file state tax Please click the link to view the image. E file state tax Figure 33-A Are You a Qualified Individual?   You do not have to file this statement with your Form 1040 or Form 1040A, but you must keep it for your records. E file state tax Veterans. E file state tax   If the Department of Veterans Affairs (VA) certifies that you are permanently and totally disabled, you can substitute VA Form 21-0172, Certification of Permanent and Total Disability, for the physician's statement you are required to keep. E file state tax VA Form 21-0172 must be signed by a person authorized by the VA to do so. E file state tax You can get this form from your local VA regional office. E file state tax Physician's statement obtained in earlier year. E file state tax   If you got a physician's statement in an earlier year and, due to your continued disabled condition, you were unable to engage in any substantial gainful activity during 2013, you may not need to get another physician's statement for 2013. E file state tax For a detailed explanation of the conditions you must meet, see the instructions for Schedule R, Part II. E file state tax If you meet the required conditions, check the box on your Schedule R, Part II, line 2. E file state tax   If you checked box 4, 5, or 6 in Part I of Schedule R, enter in the space above the box on line 2 in Part II the first name(s) of the spouse(s) for whom the box is checked. E file state tax Table 33-1. E file state tax Income Limits IF your filing status is . E file state tax . E file state tax . E file state tax THEN, even if you qualify (see Figure 33-A ), you CANNOT take the credit if. E file state tax . E file state tax . E file state tax   Your adjusted gross income (AGI)* is equal to or more than. E file state tax . E file state tax . E file state tax     OR the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than. E file state tax . E file state tax . E file state tax   single, head of household, or qualifying widow(er) with dependent child   $17,500     $5,000   married filing jointly and only one spouse qualifies in Figure 33-A   $20,000     $5,000   married filing jointly and both spouses qualify in Figure 33-A   $25,000     $7,500   married filing separately and you lived apart from your spouse for all of 2013   $12,500     $3,750   * AGI is the amount on Form 1040A, line 22, or Form 1040, line 38. E file state tax Disability income. E file state tax   If you are under age 65, you must also have taxable disability income to qualify for the credit. E file state tax Disability income must meet both of the following requirements. E file state tax It must be paid under your employer's accident or health plan or pension plan. E file state tax It must be included in your income as wages (or payments instead of wages) for the time you are absent from work because of permanent and total disability. E file state tax Payments that are not disability income. E file state tax   Any payment you receive from a plan that does not provide for disability retirement is not disability income. E file state tax Any lump-sum payment for accrued annual leave that you receive when you retire on disability is a salary payment and is not disability income. E file state tax   For purposes of the credit for the elderly or the disabled, disability income does not include amounts you receive after you reach mandatory retirement age. E file state tax Mandatory retirement age is the age set by your employer at which you would have had to retire, had you not become disabled. E file state tax Income Limits To determine if you can claim the credit, you must consider two income limits. E file state tax The first limit is the amount of your adjusted gross income (AGI). E file state tax The second limit is the amount of nontaxable social security and other nontaxable pensions, annuities, or disability income you received. E file state tax The limits are shown in Table 33-1. E file state tax If your AGI and nontaxable pensions, annuities, or disability income are less than the income limits, you may be able to claim the credit. E file state tax See How to Claim the Credit , later. E file state tax If either your AGI or your nontaxable pensions, annuities, or disability income are equal to or more than the income limits, you cannot take the credit. E file state tax How to Claim the Credit You can figure the credit yourself or the Internal Revenue Service will figure it for you. E file state tax Credit Figured for You If you choose to have the IRS figure the credit for you, read the following discussion for the form you will file (Form 1040 or 1040A). E file state tax If you want the IRS to figure your tax, see chapter 30. E file state tax Form 1040. E file state tax   If you want the IRS to figure your credit, see Form 1040 Line Entries under Tax Figured by IRS in chapter 30. E file state tax Form 1040A. E file state tax   If you want the IRS to figure your credit, see Form 1040A Line Entries under Tax Figured by IRS in chapter 30. E file state tax Credit Figured by You If you choose to figure the credit yourself, fill out the front of Schedule R. E file state tax Next, fill out Schedule R, Part III. E file state tax If you file Form 1040A, enter the amount from Schedule R, line 22, on Form 1040A, line 30. E file state tax If you file Form 1040, include the amount from Schedule R, line 22, on line 53; check box c, and enter “Sch R” on the line next to that box. E file state tax For a step-by-step discussion about filling out Part III of Schedule R, see Figuring the Credit Yourself in Publication 524. E file state tax Limit on credit. E file state tax   The amount of the credit you can claim is generally limited to the amount of your tax. E file state tax Use the Credit Limit Worksheet in the Instructions for Schedule R to determine if your credit is limited. E file state tax Prev  Up  Next   Home   More Online Publications