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Efile taxes free Publication 514 - Main Content Table of Contents Choosing To Take Credit or DeductionChoice Applies to All Qualified Foreign Taxes Making or Changing Your Choice Why Choose the Credit?Credit for Taxes Paid or Accrued Foreign Currency and Exchange Rates Foreign Tax Redetermination Who Can Take the Credit?U. Efile taxes free S. Efile taxes free Citizens Resident Aliens Nonresident Aliens What Foreign Taxes Qualify for the Credit?Tax Must Be Imposed on You You Must Have Paid or Accrued the Tax Tax Must Be the Legal and Actual Foreign Tax Liability Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) Foreign Taxes for Which You Cannot Take a CreditTaxes on Excluded Income Taxes for Which You Can Only Take an Itemized Deduction Taxes on Foreign Mineral Income Taxes From International Boycott Operations Taxes on Combined Foreign Oil and Gas Income Taxes of U. Efile taxes free S. Efile taxes free Persons Controlling Foreign Corporations and Partnerships Taxes Related to a Foreign Tax Credit Splitting Event How To Figure the CreditLimit on the Credit Separate Limit Income Allocation of Foreign Taxes Foreign Taxes From a Partnership or an S Corporation Figuring the Limit Qualified Dividends Capital Gains and Losses Allocation of Foreign and U. Efile taxes free S. Efile taxes free Losses Tax Treaties Carryback and CarryoverTime Limit on Tax Assessment Claim for Refund Taxes All Credited or All Deducted Married Couples How To Claim the CreditForm 1116 Records To Keep Simple Example — Filled-In Form 1116Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Comprehensive Example — Filled-In Form 1116Foreign earned income. Efile taxes free Employee business expenses. Efile taxes free Forms 1116 Computation of Taxable Income Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Unused Foreign Taxes How To Get Tax HelpLow Income Taxpayer Clinics Choosing To Take Credit or Deduction You can choose whether to take the amount of any qualified foreign taxes paid or accrued during the year as a foreign tax credit or as an itemized deduction. Efile taxes free You can change your choice for each year's taxes. Efile taxes free To choose the foreign tax credit, in most cases you must complete Form 1116 and attach it to your U. Efile taxes free S. Efile taxes free tax return. Efile taxes free However, you may qualify for the exception that allows you to claim the foreign tax credit without using Form 1116. Efile taxes free See How To Figure the Credit , later. Efile taxes free To choose to claim the taxes as an itemized deduction, use Schedule A (Form 1040), Itemized Deductions. Efile taxes free Figure your tax both ways—claiming the credit and claiming the deduction. Efile taxes free Then fill out your return the way that benefits you more. Efile taxes free See Why Choose the Credit, later. Efile taxes free Choice Applies to All Qualified Foreign Taxes As a general rule, you must choose to take either a credit or a deduction for all qualified foreign taxes. Efile taxes free If you choose to take a credit for qualified foreign taxes, you must take the credit for all of them. Efile taxes free You cannot deduct any of them. Efile taxes free Conversely, if you choose to deduct qualified foreign taxes, you must deduct all of them. Efile taxes free You cannot take a credit for any of them. Efile taxes free See What Foreign Taxes Qualify for the Credit , later, for the meaning of qualified foreign taxes. Efile taxes free There are exceptions to this general rule, which are described next. Efile taxes free Exceptions for foreign taxes not allowed as a credit. Efile taxes free   Even if you claim a credit for other foreign taxes, you can deduct any foreign tax that is not allowed as a credit if: You paid the tax to a country for which a credit is not allowed because it provides support for acts of international terrorism, or because the United States does not have or does not conduct diplomatic relations with it or recognize its government and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act, You paid withholding tax on dividends from foreign corporations whose stock you did not hold for the required period of time, You paid withholding tax on income or gain (other than dividends) from property you did not hold for the required period of time, You paid withholding tax on income or gain to the extent you had to make related payments on positions in substantially similar or related property, You participated in or cooperated with an international boycott, You paid taxes in connection with the purchase or sale of oil or gas, or You paid or accrued taxes on income or gain in connection with a covered asset acquisition. Efile taxes free Covered asset acquisitions include certain acquisitions that result in a stepped-up basis for U. Efile taxes free S. Efile taxes free tax purposes. Efile taxes free For more information, see Internal Revenue Code section 901(m). Efile taxes free The IRS intends to issue guidance that will explain this provision in greater detail. Efile taxes free   For more information on these items, see Taxes for Which You Can Only Take an Itemized Deduction , later, under Foreign Taxes for Which You Cannot Take a Credit. Efile taxes free Foreign taxes that are not income taxes. Efile taxes free   In most cases, only foreign income taxes qualify for the foreign tax credit. Efile taxes free Other taxes, such as foreign real and personal property taxes, do not qualify. Efile taxes free But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. Efile taxes free   In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of income. Efile taxes free However, you can deduct foreign real property taxes that are not trade or business expenses as an itemized deduction on Schedule A (Form 1040). Efile taxes free Carrybacks and carryovers. Efile taxes free   There is a limit on the credit you can claim in a tax year. Efile taxes free If your qualified foreign taxes exceed the credit limit, you may be able to carry over or carry back the excess to another tax year. Efile taxes free If you deduct qualified foreign taxes in a tax year, you cannot use a carryback or carryover in that year. Efile taxes free That is because you cannot take both a deduction and a credit for qualified foreign taxes in the same tax year. Efile taxes free   For more information on the limit, see How To Figure the Credit , later. Efile taxes free For more information on carrybacks and carryovers, see Carryback and Carryover , later. Efile taxes free Making or Changing Your Choice You can make or change your choice to claim a deduction or credit at any time during the period within 10 years from the regular due date for filing the return (without regard to any extension of time to file) for the tax year in which the taxes were actually paid or accrued. Efile taxes free You make or change your choice on your tax return (or on an amended return) for the year your choice is to be effective. Efile taxes free Example. Efile taxes free You paid foreign taxes for the last 13 years and chose to deduct them on your U. Efile taxes free S. Efile taxes free income tax returns. Efile taxes free You were timely in both filing your returns and paying your U. Efile taxes free S. Efile taxes free tax liability. Efile taxes free In February 2013, you file an amended return for tax year 2002 choosing to take a credit for your 2002 foreign taxes because you now realize that the credit is more advantageous than the deduction for that year. Efile taxes free Because the regular due date of your 2002 return was April 15, 2003, this choice is timely (within 10 years). Efile taxes free Because there is a limit on the credit for your 2002 foreign tax, you have unused 2002 foreign taxes. Efile taxes free Ordinarily, you first carry back unused foreign taxes arising in 2002 to, and claim them as a credit in, the 2 preceding tax years. Efile taxes free If you are unable to claim all of them in those 2 years, you carry them forward to the 10 years following the year in which they arose. Efile taxes free Because you originally chose to deduct your foreign taxes and the 10-year period for changing the choice for 2000 and 2001 has passed, you cannot change your choice and carry the unused 2002 foreign taxes back to tax years 2000 and 2001. Efile taxes free Because the 10-year periods for changing the choice have not passed for your 2003 through 2012 income tax returns, you can still choose to claim the credit for those years and carry forward any unused 2002 foreign taxes. Efile taxes free However, you must reduce the unused 2002 foreign taxes that you carry forward by the amount that would have been allowed as a carryback if you had timely carried back the foreign tax to tax years 2000 and 2001. Efile taxes free You cannot take a credit or a deduction for foreign taxes paid on income you exclude under the foreign earned income exclusion or the foreign housing exclusion. Efile taxes free See Foreign Earned Income and Housing Exclusions under Foreign Taxes for Which You Cannot Take a Credit, later. Efile taxes free Why Choose the Credit? The foreign tax credit is intended to relieve you of a double tax burden when your foreign source income is taxed by both the United States and the foreign country. Efile taxes free In most cases, if the foreign tax rate is higher than the U. Efile taxes free S. Efile taxes free rate, there will be no U. Efile taxes free S. Efile taxes free tax on the foreign income. Efile taxes free If the foreign tax rate is lower than the U. Efile taxes free S. Efile taxes free rate, U. Efile taxes free S. Efile taxes free tax on the foreign income will be limited to the difference between the rates. Efile taxes free The foreign tax credit can only reduce U. Efile taxes free S. Efile taxes free taxes on foreign source income; it cannot reduce U. Efile taxes free S. Efile taxes free taxes on U. Efile taxes free S. Efile taxes free source income. Efile taxes free Although no one rule covers all situations, in most cases it is better to take a credit for qualified foreign taxes than to deduct them as an itemized deduction. Efile taxes free This is because: A credit reduces your actual U. Efile taxes free S. Efile taxes free income tax on a dollar-for-dollar basis, while a deduction reduces only your income subject to tax, You can choose to take the foreign tax credit even if you do not itemize your deductions. Efile taxes free You then are allowed the standard deduction in addition to the credit, and If you choose to take the foreign tax credit, and the taxes paid or accrued exceed the credit limit for the tax year, you may be able to carry over or carry back the excess to another tax year. Efile taxes free (See Limit on credit under How To Figure the Credit, later. Efile taxes free ) Example 1. Efile taxes free For 2013, you and your spouse have adjusted gross income of $80,300, including $20,000 of dividend income from foreign sources. Efile taxes free None of the dividends are qualified dividends. Efile taxes free You file a joint return and can claim two $3,900 exemptions. Efile taxes free You had to pay $2,000 in foreign income taxes on the dividend income. Efile taxes free If you take the foreign taxes as an itemized deduction, your total itemized deductions are $15,000. Efile taxes free Your taxable income then is $57,500 and your tax is $7,736. Efile taxes free If you take the credit instead, your itemized deductions are only $13,000. Efile taxes free Your taxable income then is $59,500 and your tax before the credit is $8,036. Efile taxes free After the credit, however, your tax is only $6,036. Efile taxes free Therefore, your tax is $1,700 lower ($7,736 − $6,036) by taking the credit. Efile taxes free Example 2. Efile taxes free In 2013, you receive investment income of $5,000 from a foreign country, which imposes a tax of $1,500 on that income. Efile taxes free You report on your U. Efile taxes free S. Efile taxes free return this income as well as $56,000 of U. Efile taxes free S. Efile taxes free source wages and an allowable $49,000 partnership loss from a U. Efile taxes free S. Efile taxes free partnership. Efile taxes free Your share of the partnership's gross income is $25,000 and your share of its expenses is $74,000. Efile taxes free You are single, entitled to one $3,900 exemption, and have other itemized deductions of $6,850. Efile taxes free If you deduct the foreign tax on your U. Efile taxes free S. Efile taxes free return, your taxable income is a negative $250 ($5,000 + $56,000 − $49,000 − $1,500 − $6,850 − $3,900) and your tax is $0. Efile taxes free If you take the credit instead, your taxable income is $1,250 ($5,000 + $56,000 − $49,000 − $3,900 − $6,850) and your tax before the credit is $126. Efile taxes free You can take a credit of only $113 because of limits discussed later. Efile taxes free Your tax after the credit is $13 ($126 − $113), which is $13 more than if you deduct the foreign tax. Efile taxes free If you choose the credit, you will have unused foreign taxes of $1,387 ($1,500 − $113). Efile taxes free When deciding whether to take the credit or the deduction this year, you will need to consider whether you can benefit from a carryback or carryover of that unused foreign tax. Efile taxes free Credit for Taxes Paid or Accrued You can claim the credit for a qualified foreign tax in the tax year in which you pay it or accrue it, depending on your method of accounting. Efile taxes free “Tax year” refers to the tax year for which your U. Efile taxes free S. Efile taxes free return is filed, not the tax year for which your foreign return is filed. Efile taxes free Accrual method of accounting. Efile taxes free   If you use an accrual method of accounting, you can claim the credit only in the year in which you accrue the tax. Efile taxes free You are using an accrual method of accounting if you report income when you earn it, rather than when you receive it, and you deduct your expenses when you incur them, rather than when you pay them. Efile taxes free   In most cases, foreign taxes accrue when all the events have taken place that fix the amount of the tax and your liability to pay it. Efile taxes free Generally, this occurs on the last day of the tax year for which your foreign return is filed. Efile taxes free Contesting your foreign tax liability. Efile taxes free   If you are contesting your foreign tax liability, you cannot accrue it and take a credit until the amount of foreign tax due is finally determined. Efile taxes free However, if you choose to pay the tax liability you are contesting, you can take a credit for the amount you pay before a final determination of foreign tax liability is made. Efile taxes free Once your liability is determined, the foreign tax credit is allowable for the year to which the foreign tax relates. Efile taxes free If the amount of foreign taxes taken as a credit differs from the final foreign tax liability, you may have to adjust the credit, as discussed later under Foreign Tax Redetermination . Efile taxes free You may have to post a bond. Efile taxes free   If you claim a credit for taxes accrued but not paid, you may have to post an income tax bond to guarantee your payment of any tax due in the event the amount of foreign tax paid differs from the amount claimed. Efile taxes free   The IRS can request this bond at any time without regard to the Time Limit on Tax Assessment discussed later under Carryback and Carryover. Efile taxes free Cash method of accounting. Efile taxes free   If you use the cash method of accounting, you can choose to take the credit either in the year you pay the tax or in the year you accrue it. Efile taxes free You are using the cash method of accounting if you report income in the year you actually or constructively receive it, and deduct expenses in the year you pay them. Efile taxes free Choosing to take credit in the year taxes accrue. Efile taxes free   Even if you use the cash method of accounting, you can choose to take a credit for foreign taxes in the year they accrue. Efile taxes free You make the choice by checking the box in Part II of Form 1116. Efile taxes free Once you make that choice, you must follow it in all later years and take a credit for foreign taxes in the year they accrue. Efile taxes free   In addition, the choice to take the credit when foreign taxes accrue applies to all foreign taxes qualifying for the credit. Efile taxes free You cannot take a credit for some foreign taxes when paid and take a credit for others when accrued. Efile taxes free   If you make the choice to take the credit when foreign taxes accrue and pay them in a later year, you cannot claim a deduction for any part of the previously accrued taxes. Efile taxes free Credit based on taxes paid in earlier year. Efile taxes free   If, in earlier years, you took the credit based on taxes paid, and this year you choose to take the credit based on taxes accrued, you may be able to take the credit this year for taxes from more than one year. Efile taxes free Example. Efile taxes free Last year you took the credit based on taxes paid. Efile taxes free This year you chose to take the credit based on taxes accrued. Efile taxes free During the year you paid foreign income taxes owed for last year. Efile taxes free You also accrued foreign income taxes for this year that you did not pay by the end of the year. Efile taxes free You can base the credit on your return for this year on both last year's taxes that you paid and this year's taxes that you accrued. Efile taxes free Foreign Currency and Exchange Rates U. Efile taxes free S. Efile taxes free income tax is imposed on income expressed in U. Efile taxes free S. Efile taxes free dollars, while in most cases the foreign tax is imposed on income expressed in foreign currency. Efile taxes free Therefore, fluctuations in the value of the foreign currency relative to the U. Efile taxes free S. Efile taxes free dollar may affect the foreign tax credit. Efile taxes free Translating foreign currency into U. Efile taxes free S. Efile taxes free dollars. Efile taxes free   If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U. Efile taxes free S. Efile taxes free dollars. Efile taxes free How and when you do this depends on your functional currency. Efile taxes free In most cases, your functional currency is the U. Efile taxes free S. Efile taxes free dollar unless you are required to use the currency of a foreign country. Efile taxes free   You must make all federal income tax determinations in your functional currency. Efile taxes free The U. Efile taxes free S. Efile taxes free dollar is the functional currency for all taxpayers except some qualified business units. Efile taxes free A qualified business unit is a separate and clearly identified unit of a trade or business that maintains separate books and records. Efile taxes free Unless you are self-employed, your functional currency is the U. Efile taxes free S. Efile taxes free dollar. Efile taxes free   Even if you are self-employed and have a qualified business unit, your functional currency is the U. Efile taxes free S. Efile taxes free dollar if any of the following apply. Efile taxes free You conduct the business primarily in dollars. Efile taxes free The principal place of business is located in the United States. Efile taxes free You choose to or are required to use the dollar as your functional currency. Efile taxes free The business books and records are not kept in the currency of the economic environment in which a significant part of the business activities is conducted. Efile taxes free   If your functional currency is the U. Efile taxes free S. Efile taxes free dollar, you must immediately translate into dollars all items of income, expense, etc. Efile taxes free , that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax. Efile taxes free If there is more than one exchange rate, use the one that most properly reflects your income. Efile taxes free In most cases, you can get exchange rates from banks and U. Efile taxes free S. Efile taxes free Embassies. Efile taxes free   If your functional currency is not the U. Efile taxes free S. Efile taxes free dollar, make all income tax determinations in your functional currency. Efile taxes free At the end of the year, translate the results, such as income or loss, into U. Efile taxes free S. Efile taxes free dollars to report on your income tax return. Efile taxes free    For more information, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Rate of exchange for foreign taxes paid. Efile taxes free   Use the rate of exchange in effect on the date you paid the foreign taxes to the foreign country unless you meet the exception discussed next. Efile taxes free If your tax was withheld in foreign currency, use the rate of exchange in effect for the date on which the tax was withheld. Efile taxes free If you make foreign estimated tax payments, you use the rate of exchange in effect for the date on which you made the estimated tax payment. Efile taxes free   The exchange rate rules discussed here apply even if the foreign taxes are paid or accrued with respect to a foreign tax credit splitting event (discussed later). Efile taxes free Exception. Efile taxes free   If you claim the credit for foreign taxes on an accrual basis, in most cases you must use the average exchange rate for the tax year to which the taxes relate. Efile taxes free This rule applies to accrued taxes relating to tax years beginning after 1997 and only under the following conditions. Efile taxes free The foreign taxes are paid on or after the first day of the tax year to which they relate. Efile taxes free The foreign taxes are paid not later than 2 years after the close of the tax year to which they relate. Efile taxes free The foreign tax liability is not denominated in an inflationary currency (defined in the Form 1116 instructions). Efile taxes free (This condition applies to taxes paid or accrued in tax years beginning after November 6, 2007. Efile taxes free )   For all other foreign taxes, you should use the exchange rate in effect on the date you paid them. Efile taxes free Election to use exchange rate on date paid. Efile taxes free   If you have accrued foreign taxes that you are otherwise required to convert using the average exchange rate, you may elect to use the exchange rate in effect on the date the foreign taxes are paid if the taxes are denominated in a nonfunctional foreign currency. Efile taxes free If any of the accrued taxes are unpaid, you must translate them into U. Efile taxes free S. Efile taxes free dollars using the exchange rate on the last day of the U. Efile taxes free S. Efile taxes free tax year to which those taxes relate. Efile taxes free You may make the election for all nonfunctional currency foreign income taxes or only those nonfunctional currency foreign income taxes that are attributable to qualified business units with a U. Efile taxes free S. Efile taxes free dollar functional currency. Efile taxes free Once made, the election applies to the tax year for which made and all subsequent tax years unless revoked with the consent of the IRS. Efile taxes free The election is available for tax years beginning after 2004. Efile taxes free It must be made by the due date (including extensions) for filing the tax return for the first tax year to which the election applies. Efile taxes free Make the election by attaching a statement to the applicable tax return. Efile taxes free The statement must identify whether the election is made for all foreign taxes or only for foreign taxes attributable to qualified business units with a U. Efile taxes free S. Efile taxes free dollar functional currency. Efile taxes free Foreign Tax Redetermination A foreign tax redetermination is any change in your foreign tax liability that may affect your U. Efile taxes free S. Efile taxes free foreign tax credit claimed. Efile taxes free The year in which to claim the credit remains the year to which the foreign taxes paid or accrued relate, even if the change in foreign tax liability occurs in a later year. Efile taxes free If a foreign tax redetermination occurs, a redetermination of your U. Efile taxes free S. Efile taxes free tax liability is required if any of the following conditions apply. Efile taxes free The accrued taxes when paid differ from the amounts claimed as a credit. Efile taxes free The accrued taxes you claimed as a credit in one tax year are not paid within 2 years after the end of that tax year. Efile taxes free If this applies to you, you must reduce the credit previously claimed by the amount of the unpaid taxes. Efile taxes free You will not be allowed a credit for the unpaid taxes until you pay them. Efile taxes free When you pay the accrued taxes, a new foreign tax redetermination occurs and you must translate the taxes into U. Efile taxes free S. Efile taxes free dollars using the exchange rate as of the date they were paid. Efile taxes free The foreign tax credit is allowed for the year to which the foreign tax relates. Efile taxes free See Rate of exchange for foreign taxes paid , earlier, under Foreign Currency and Exchange Rates. Efile taxes free The foreign taxes you paid are refunded in whole or in part. Efile taxes free For taxes taken into account when accrued but translated into dollars on the date of payment, the dollar value of the accrued tax differs from the dollar value of the tax paid because of fluctuations in the exchange rate between the date of accrual and the date of payment. Efile taxes free However, no redetermination is required if the change in foreign tax liability for each foreign country is solely attributable to exchange rate fluctuations and is less than the smaller of: $10,000, or 2% of the total dollar amount of the foreign tax initially accrued for that foreign country for the U. Efile taxes free S. Efile taxes free tax year. Efile taxes free In this case, you must adjust your U. Efile taxes free S. Efile taxes free tax in the tax year in which the accrued foreign taxes are paid. Efile taxes free Notice to the Internal Revenue Service (IRS) of Redetermination You are required to notify the IRS about a foreign tax credit redetermination that affects your U. Efile taxes free S. Efile taxes free tax liability for each tax year affected by the redetermination. Efile taxes free In most cases, you must file Form 1040X, Amended U. Efile taxes free S. Efile taxes free Individual Income Tax Return, with a revised Form 1116 and a statement that contains information sufficient for the IRS to redetermine your U. Efile taxes free S. Efile taxes free tax liability for the year or years affected. Efile taxes free See Contents of statement , later. Efile taxes free You are not required to attach Form 1116 for a tax year affected by a redetermination if: The amount of your creditable taxes paid or accrued during the tax year is not more than $300 ($600 if married filing a joint return) as a result of the foreign tax redetermination, and You meet the requirements listed under Exemption from foreign tax credit limit under How To Figure the Credit, later. Efile taxes free There are other exceptions to this requirement. Efile taxes free They are discussed later under Due date of notification to IRS . Efile taxes free Contents of statement. Efile taxes free   The statement must include all of the following. Efile taxes free Your name, address, and taxpayer identification number. Efile taxes free The tax year or years that are affected by the foreign tax redetermination. Efile taxes free The date or dates the foreign taxes were accrued, if applicable. Efile taxes free The date or dates the foreign taxes were paid. Efile taxes free The amount of foreign taxes paid or accrued on each date (in foreign currency) and the exchange rate used to translate each amount. Efile taxes free Information sufficient to determine any interest due from or owing to you, including the amount of any interest paid to you by the foreign government and the dates received. Efile taxes free   In the case of any foreign taxes that were not paid before the date two years after the close of the tax year to which those taxes relate, you must provide the amount of those taxes in foreign currency and the exchange rate that was used to translate that amount when originally claimed as a credit. Efile taxes free   If any foreign tax was refunded in whole or in part, you must provide the date and amount (in foreign currency) of each refund, the exchange rate that was used to translate each amount when originally claimed as a credit, and the exchange rate for the date the refund was received (for purposes of computing foreign currency gain or loss under Internal Revenue Code section 988). Efile taxes free Due date of notification to IRS. Efile taxes free   If you pay less foreign tax than you originally claimed a credit for, in most cases you must file a notification by the due date (with extensions) of your original return for your tax year in which the foreign tax redetermination occurred. Efile taxes free There is no limit on the time the IRS has to redetermine and assess the correct U. Efile taxes free S. Efile taxes free tax due. Efile taxes free If you pay more foreign tax than you originally claimed a credit for, you have 10 years to file a claim for refund of U. Efile taxes free S. Efile taxes free taxes. Efile taxes free See Time Limit on Refund Claims , later. Efile taxes free   Exceptions to this due date are explained in the next two paragraphs. Efile taxes free Multiple redeterminations of U. Efile taxes free S. Efile taxes free tax liability for same tax year. Efile taxes free   Where more than one foreign tax redetermination requires a redetermination of U. Efile taxes free S. Efile taxes free tax liability for the same tax year and those redeterminations occur in the same tax year or within two consecutive tax years, you can file for that tax year one notification (Form 1040X with a Form 1116 and the required statement) that reflects all those tax redeterminations. Efile taxes free If you choose to file one notification, the due date for that notification is the due date of the original return (with extensions) for the year in which the first foreign tax redetermination that reduced your foreign tax liability occurred. Efile taxes free However, foreign tax redeterminations with respect to the tax year for which a redetermination of U. Efile taxes free S. Efile taxes free tax liability is required may occur after the due date for providing that notification. Efile taxes free In this situation, you may have to file more than one Form 1040X for that tax year. Efile taxes free Additional U. Efile taxes free S. Efile taxes free tax due eliminated by foreign tax credit carryback or carryover. Efile taxes free   If a foreign tax redetermination requires a redetermination of U. Efile taxes free S. Efile taxes free tax liability that would otherwise result in an additional amount of U. Efile taxes free S. Efile taxes free tax due, but the additional tax is eliminated by a carryback or carryover of an unused foreign tax, you do not have to amend your tax return for the year affected by the redetermination. Efile taxes free Instead, you can notify the IRS by attaching a statement to the original return for the tax year in which the foreign tax redetermination occurred. Efile taxes free You must file the statement by the due date (with extensions) of that return. Efile taxes free The statement must show the amount of the unused foreign taxes paid or accrued and a detailed schedule showing the computation of the carryback or carryover (including the amounts carried back or over to the year for which a redetermination on U. Efile taxes free S. Efile taxes free tax liability is required). Efile taxes free Failure-to-notify penalty. Efile taxes free   If you fail to notify the IRS of a foreign tax redetermination and cannot show reasonable cause for the failure, you may have to pay a penalty. Efile taxes free   For each month, or part of a month, that the failure continues, you pay a penalty of 5% of the tax due resulting from a redetermination of your U. Efile taxes free S. Efile taxes free tax. Efile taxes free This penalty cannot be more than 25% of the tax due. Efile taxes free Foreign tax refund. Efile taxes free   If you receive a foreign tax refund without interest from the foreign government, you will not have to pay interest on the amount of tax due resulting from the adjustment to your U. Efile taxes free S. Efile taxes free tax for the time before the date of the refund. Efile taxes free   However, if you receive a foreign tax refund with interest, you must pay interest to the IRS up to the amount of the interest paid to you by the foreign government. Efile taxes free The interest you must pay cannot be more than the interest you would have had to pay on taxes that were unpaid for any other reason for the same period. Efile taxes free Interest also is owed from the time you receive a refund until you pay the additional tax due. Efile taxes free Foreign tax imposed on foreign refund. Efile taxes free   If your foreign tax refund is taxed by the foreign country, you cannot take a separate credit or deduction for this additional foreign tax. Efile taxes free However, when you refigure the foreign tax credit taken for the original foreign tax, reduce the amount of the refund by the foreign tax paid on the refund. Efile taxes free Example. Efile taxes free You paid a foreign income tax of $3,000 in 2011, and received a foreign tax refund of $500 in 2013 on which a foreign tax of $100 was imposed. Efile taxes free When you refigure your credit for 2011, you must reduce the $3,000 you paid by $400. Efile taxes free Time Limit on Refund Claims You have 10 years to file a claim for refund of U. Efile taxes free S. Efile taxes free tax if you find that you paid or accrued a larger foreign tax than you claimed a credit for. Efile taxes free The 10-year period begins the day after the regular due date for filing the return (without extensions) for the year in which the taxes were actually paid or accrued. Efile taxes free You have 10 years to file your claim regardless of whether you claim the credit for taxes paid or taxes accrued. Efile taxes free The 10-year period applies to claims for refund or credit based on: Fixing math errors in figuring qualified foreign taxes, Reporting qualified foreign taxes not originally reported on the return, or Any other change in the size of the credit (including one caused by correcting the foreign tax credit limit). Efile taxes free The special 10-year period also applies to making or changing your choice to claim a deduction or credit for foreign taxes. Efile taxes free See Making or Changing Your Choice discussed earlier under Choosing To Take Credit or Deduction. Efile taxes free Who Can Take the Credit? U. Efile taxes free S. Efile taxes free citizens, resident aliens, and nonresident aliens who paid foreign income tax and are subject to U. Efile taxes free S. Efile taxes free tax on foreign source income may be able to take a foreign tax credit. Efile taxes free U. Efile taxes free S. Efile taxes free Citizens If you are a U. Efile taxes free S. Efile taxes free citizen, you are taxed by the United States on your worldwide income wherever you live. Efile taxes free You are normally entitled to take a credit for foreign taxes you pay or accrue. Efile taxes free Resident Aliens If you are a resident alien of the United States, you can take a credit for foreign taxes subject to the same general rules as U. Efile taxes free S. Efile taxes free citizens. Efile taxes free If you are a bona fide resident of Puerto Rico for the entire tax year, you also come under the same rules. Efile taxes free Usually, you can take a credit only for those foreign taxes imposed on income you actually or constructively received while you had resident alien status. Efile taxes free For information on alien status, see Publication 519. Efile taxes free Nonresident Aliens If you are a nonresident alien, you cannot take the credit in most cases. Efile taxes free However, you may be able to take the credit if: You were a bona fide resident of Puerto Rico during your entire tax year, or You pay or accrue tax to a foreign country or U. Efile taxes free S. Efile taxes free possession on income from foreign sources that is effectively connected with a trade or business in the United States. Efile taxes free But if you must pay tax to a foreign country or U. Efile taxes free S. Efile taxes free possession on income from U. Efile taxes free S. Efile taxes free sources only because you are a citizen or a resident of that country or U. Efile taxes free S. Efile taxes free possession, do not use that tax in figuring the amount of your credit. Efile taxes free For information on alien status and effectively connected income, see Publication 519. Efile taxes free What Foreign Taxes Qualify for the Credit? In most cases, the following four tests must be met for any foreign tax to qualify for the credit. Efile taxes free The tax must be imposed on you. Efile taxes free You must have paid or accrued the tax. Efile taxes free The tax must be the legal and actual foreign tax liability. Efile taxes free The tax must be an income tax (or a tax in lieu of an income tax). Efile taxes free Certain foreign taxes do not qualify for the credit even if the four tests are met. Efile taxes free See Foreign Taxes for Which You Cannot Take a Credit, later. Efile taxes free Tax Must Be Imposed on You You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U. Efile taxes free S. Efile taxes free possession. Efile taxes free For example, a tax that is deducted from your wages is considered to be imposed on you. Efile taxes free You cannot shift the right to claim the credit by contract or other means. Efile taxes free Foreign country. Efile taxes free   A foreign country includes any foreign state and its political subdivisions. Efile taxes free Income, war profits, and excess profits taxes paid or accrued to a foreign city or province qualify for the foreign tax credit. Efile taxes free U. Efile taxes free S. Efile taxes free possessions. Efile taxes free   For foreign tax credit purposes, all qualified taxes paid to U. Efile taxes free S. Efile taxes free possessions are considered foreign taxes. Efile taxes free For this purpose, U. Efile taxes free S. Efile taxes free possessions include Puerto Rico and American Samoa. Efile taxes free   When the term “foreign country” is used in this publication, it includes U. Efile taxes free S. Efile taxes free possessions unless otherwise stated. Efile taxes free You Must Have Paid or Accrued the Tax In most cases, you can claim the credit only if you paid or accrued the foreign tax to a foreign country or U. Efile taxes free S. Efile taxes free possession. Efile taxes free However, the paragraphs that follow describe some instances in which you can claim the credit even if you did not directly pay or accrue the tax yourself. Efile taxes free Joint return. Efile taxes free   If you file a joint return, you can claim the credit based on the total foreign income taxes paid or accrued by you and your spouse. Efile taxes free Combined income. Efile taxes free   If foreign tax is imposed on the combined income of two or more persons (for example, spouses), the tax is allocated among, and considered paid by, these persons on a pro rata basis in proportion to each person's portion of the combined income, as determined under foreign law and Regulations section 1. Efile taxes free 901-2(f)(3)(iii). Efile taxes free Combined income with respect to each foreign tax that is imposed on a combined basis (and combined income subject to tax exemption or preferential tax rates) is computed separately, and the tax on that combined income is allocated separately. Efile taxes free   These rules apply to foreign taxes paid or accrued in tax years beginning after February 14, 2012. Efile taxes free However, you can choose to apply the new rules to foreign taxes paid or accrued in tax years beginning after December 31, 2010, and before February 15, 2012. Efile taxes free For more details, see paragraphs (f) and (h) of Regulations section 1. Efile taxes free 901-2. Efile taxes free For similar rules applicable to prior tax years, see Regulations section 1. Efile taxes free 901-2 (revised as of April 1, 2011). Efile taxes free Example. Efile taxes free You and your spouse reside in Country X, which imposes income tax on your combined incomes. Efile taxes free Both of you use the “u” as your functional currency. Efile taxes free Country X apportions tax based on income. Efile taxes free You had income of 30,000u and your spouse had income of 20,000u. Efile taxes free Your filing status on your U. Efile taxes free S. Efile taxes free income tax return is married filing separately. Efile taxes free You can claim only 60% (30,000u/50,000u) of the foreign taxes imposed on your income on your U. Efile taxes free S income tax return. Efile taxes free Your spouse can claim only 40% (20,000u/50,000u). Efile taxes free Partner or S corporation shareholder. Efile taxes free   If you are a member of a partnership, or a shareholder in an S corporation, you can claim the credit based on your proportionate share of the foreign income taxes paid or accrued by the partnership or the S corporation. Efile taxes free These amounts will be shown on the Schedule K-1 you receive from the partnership or S corporation. Efile taxes free However, if you are a shareholder in an S corporation that in turn owns stock in a foreign corporation, you cannot claim a credit for your share of foreign taxes paid by the foreign corporation. Efile taxes free Beneficiary. Efile taxes free   If you are a beneficiary of an estate or trust, you may be able to claim the credit based on your proportionate share of foreign income taxes paid or accrued by the estate or trust. Efile taxes free This amount will be shown on the Schedule K-1 you receive from the estate or trust. Efile taxes free However, you must show that the tax was imposed on income of the estate and not on income received by the decedent. Efile taxes free Mutual fund shareholder. Efile taxes free   If you are a shareholder of a mutual fund or other regulated investment company (RIC), you may be able to claim the credit based on your share of foreign income taxes paid by the fund if it chooses to pass the credit on to its shareholders. Efile taxes free You should receive from the mutual fund or other RIC a Form 1099-DIV, or similar statement, showing your share of the foreign income, and your share of the foreign taxes paid. Efile taxes free If you do not receive this information, you will need to contact the fund. Efile taxes free Controlled foreign corporation shareholder. Efile taxes free   If you are a shareholder of a controlled foreign corporation and choose to be taxed at corporate rates on the amount you must include in gross income from that corporation, you can claim the credit based on your share of foreign taxes paid or accrued by the controlled foreign corporation. Efile taxes free If you make this election, you must claim the credit by filing Form 1118, Foreign Tax Credit—Corporations. Efile taxes free Controlled foreign corporation. Efile taxes free   A controlled foreign corporation is a foreign corporation in which U. Efile taxes free S. Efile taxes free shareholders own more than 50% of the voting power or value of the stock. Efile taxes free You are considered a U. Efile taxes free S. Efile taxes free shareholder if you own, directly or indirectly, 10% or more of the total voting power of all classes of the foreign corporation's stock. Efile taxes free See Internal Revenue Code sections 951(b) and 958(b) for more information. Efile taxes free Tax Must Be the Legal and Actual Foreign Tax Liability The amount of foreign tax that qualifies is not necessarily the amount of tax withheld by the foreign country. Efile taxes free Only the legal and actual foreign tax liability that you paid or accrued during the year qualifies for the credit. Efile taxes free Foreign tax refund. Efile taxes free   You cannot take a foreign tax credit for income taxes paid to a foreign country if it is reasonably certain the amount would be refunded, credited, rebated, abated, or forgiven if you made a claim. Efile taxes free   For example, the United States has tax treaties with many countries allowing U. Efile taxes free S. Efile taxes free citizens and residents reductions in the rates of tax of those foreign countries. Efile taxes free However, some treaty countries require U. Efile taxes free S. Efile taxes free citizens and residents to pay the tax figured without regard to the lower treaty rates and then claim a refund for the amount by which the tax actually paid is more than the amount of tax figured using the lower treaty rate. Efile taxes free The qualified foreign tax is the amount figured using the lower treaty rate and not the amount actually paid, because the excess tax is refundable. Efile taxes free Subsidy received. Efile taxes free   Tax payments a foreign country returns to you in the form of a subsidy do not qualify for the foreign tax credit. Efile taxes free This rule applies even if the subsidy is given to a person related to you, or persons who participated with you in a transaction or a related transaction. Efile taxes free A subsidy can be provided by any means but must be determined, directly or indirectly, in relation to the amount of tax, or to the base used to figure the tax. Efile taxes free   The term “subsidy” includes any type of benefit. Efile taxes free Some ways of providing a subsidy are refunds, credits, deductions, payments, or discharges of obligations. Efile taxes free Shareholder receiving refund for corporate tax in integrated system. Efile taxes free   Under some foreign tax laws and treaties, a shareholder is considered to have paid part of the tax that is imposed on the corporation. Efile taxes free You may be able to claim a refund of these taxes from the foreign government. Efile taxes free You must include the refund (including any amount withheld) in your income in the year received. Efile taxes free Any tax withheld from the refund is a qualified foreign tax. Efile taxes free Example. Efile taxes free You are a shareholder of a French corporation. Efile taxes free You receive a $100 refund of the tax paid to France by the corporation on the earnings distributed to you as a dividend. Efile taxes free The French government imposes a 15% withholding tax ($15) on the refund you received. Efile taxes free You receive a check for $85. Efile taxes free You include $100 in your income. Efile taxes free The $15 of tax withheld is a qualified foreign tax. Efile taxes free Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) In most cases, only income, war profits, and excess profits taxes (income taxes) qualify for the foreign tax credit. Efile taxes free Foreign taxes on wages, dividends, interest, and royalties qualify for the credit in most cases. Efile taxes free Furthermore, foreign taxes on income can qualify even though they are not imposed under an income tax law if the tax is in lieu of an income, war profits, or excess profits tax. Efile taxes free See Taxes in Lieu of Income Taxes , later. Efile taxes free Income Tax Simply because the levy is called an income tax by the foreign taxing authority does not make it an income tax for this purpose. Efile taxes free A foreign levy is an income tax only if it meets both of the following requirements. Efile taxes free It is a tax; that is, you have to pay it and you get no specific economic benefit (discussed below) from paying it. Efile taxes free The predominant character of the tax is that of an income tax in the U. Efile taxes free S. Efile taxes free sense. Efile taxes free A foreign levy may meet these requirements even if the foreign tax law differs from U. Efile taxes free S. Efile taxes free tax law. Efile taxes free The foreign law may include in income items that U. Efile taxes free S. Efile taxes free law does not include, or it may allow certain exclusions or deductions that U. Efile taxes free S. Efile taxes free law does not allow. Efile taxes free Specific economic benefit. Efile taxes free   In most cases, you get a specific economic benefit if you receive, or are considered to receive, an economic benefit from the foreign country imposing the levy, and: If there is a generally imposed income tax, the economic benefit is not available on substantially the same terms to all persons subject to the income tax, or If there is no generally imposed income tax, the economic benefit is not available on substantially the same terms to the population of the foreign country in general. Efile taxes free   You are considered to receive a specific economic benefit if you have a business transaction with a person who receives a specific economic benefit from the foreign country and, under the terms and conditions of the transaction, you receive directly or indirectly all or part of the benefit. Efile taxes free   However, see the exception discussed later under Pension, unemployment, and disability fund payments . Efile taxes free Economic benefits. Efile taxes free   Economic benefits include the following. Efile taxes free Goods. Efile taxes free Services. Efile taxes free Fees or other payments. Efile taxes free Rights to use, acquire, or extract resources, patents, or other property the foreign country owns or controls. Efile taxes free Discharges of contractual obligations. Efile taxes free   In most cases, the right or privilege merely to engage in business is not an economic benefit. Efile taxes free Dual-capacity taxpayers. Efile taxes free   If you are subject to a foreign country's levy and you also receive a specific economic benefit from that foreign country, you are a “dual-capacity taxpayer. Efile taxes free ” As a dual-capacity taxpayer, you cannot claim a credit for any part of the foreign levy, unless you establish that the amount paid under a distinct element of the foreign levy is a tax, rather than a compulsory payment for a direct or indirect specific economic benefit. Efile taxes free    For more information on how to establish amounts paid under separate elements of a levy, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Pension, unemployment, and disability fund payments. Efile taxes free   A foreign tax imposed on an individual to pay for retirement, old-age, death, survivor, unemployment, illness, or disability benefits, or for substantially similar purposes, is not payment for a specific economic benefit if the amount of the tax does not depend on the age, life expectancy, or similar characteristics of that individual. Efile taxes free    No deduction or credit is allowed, however, for social security taxes paid or accrued to a foreign country with which the United States has a social security agreement. Efile taxes free For more information about these agreements, see Publication 54. Efile taxes free Soak-up taxes. Efile taxes free   A foreign tax is not predominantly an income tax and does not qualify for credit to the extent it is a soak-up tax. Efile taxes free A tax is a soak-up tax to the extent that liability for it depends on the availability of a credit for it against income tax imposed by another country. Efile taxes free This rule applies only if and to the extent that the foreign tax would not be imposed if the credit were not available. Efile taxes free Penalties and interest. Efile taxes free   Amounts paid to a foreign government to satisfy a liability for interest, fines, penalties, or any similar obligation are not taxes and do not qualify for the credit. Efile taxes free Taxes not based on income. Efile taxes free   Foreign taxes based on gross receipts or the number of units produced, rather than on realized net income, do not qualify unless they are imposed in lieu of an income tax, as discussed next. Efile taxes free Taxes based on assets, such as property taxes, do not qualify for the credit. Efile taxes free Taxes in Lieu of Income Taxes A tax paid or accrued to a foreign country qualifies for the credit if it is imposed in lieu of an income tax otherwise generally imposed. Efile taxes free A foreign levy is a tax in lieu of an income tax only if: It is not payment for a specific economic benefit as discussed earlier, and The tax is imposed in place of, and not in addition to, an income tax otherwise generally imposed. Efile taxes free A tax in lieu of an income tax does not have to be based on realized net income. Efile taxes free A foreign tax imposed on gross income, gross receipts or sales, or the number of units produced or exported can qualify for the credit. Efile taxes free In most cases, a soak-up tax (discussed earlier) does not qualify as a tax in lieu of an income tax. Efile taxes free However, if the foreign country imposes a soak-up tax in lieu of an income tax, the amount that does not qualify for foreign tax credit is the lesser of the following amounts. Efile taxes free The soak-up tax. Efile taxes free The foreign tax you paid that is more than the amount you would have paid if you had been subject to the generally imposed income tax. Efile taxes free Foreign Taxes for Which You Cannot Take a Credit This part discusses the foreign taxes for which you cannot take a credit. Efile taxes free These are: Taxes on excluded income, Taxes for which you can only take an itemized deduction, Taxes on foreign mineral income, Taxes from international boycott operations, A portion of taxes on combined foreign oil and gas income, Taxes of U. Efile taxes free S. Efile taxes free persons controlling foreign corporations and partnerships who fail to file required information returns, and Taxes related to a foreign tax splitting event. Efile taxes free Taxes on Excluded Income You cannot take a credit for foreign taxes paid or accrued on certain income that is excluded from U. Efile taxes free S. Efile taxes free gross income. Efile taxes free Foreign Earned Income and Housing Exclusions You must reduce your foreign taxes available for the credit by the amount of those taxes paid or accrued on income that is excluded from U. Efile taxes free S. Efile taxes free income under the foreign earned income exclusion or the foreign housing exclusion. Efile taxes free See Publication 54 for more information on the foreign earned income and housing exclusions. Efile taxes free Wages completely excluded. Efile taxes free   If your wages are completely excluded, you cannot take a credit for any of the foreign taxes paid or accrued on these wages. Efile taxes free Wages partly excluded. Efile taxes free   If only part of your wages is excluded, you cannot take a credit for the foreign income taxes allocable to the excluded part. Efile taxes free You find the amount allocable to your excluded wages by multiplying the foreign tax paid or accrued on foreign earned income received or accrued during the tax year by a fraction. Efile taxes free   The numerator of the fraction is your foreign earned income and housing amounts excluded under the foreign earned income and housing exclusions for the tax year minus otherwise deductible expenses definitely related and properly apportioned to that income. Efile taxes free Deductible expenses do not include the foreign housing deduction. Efile taxes free   The denominator is your total foreign earned income received or accrued during the tax year minus all deductible expenses allocable to that income (including the foreign housing deduction). Efile taxes free If the foreign law taxes foreign earned income and some other income (for example, earned income from U. Efile taxes free S. Efile taxes free sources or a type of income not subject to U. Efile taxes free S. Efile taxes free tax), and the taxes on the other income cannot be segregated, the denominator of the fraction is the total amount of income subject to the foreign tax minus deductible expenses allocable to that income. Efile taxes free Example. Efile taxes free You are a U. Efile taxes free S. Efile taxes free citizen and a cash basis taxpayer, employed by Company X and living in Country A. Efile taxes free Your records show the following: Foreign earned income received $125,000 Unreimbursed business travel expenses 20,000 Income tax paid to Country A 30,000 Exclusion of foreign earned  income and housing allowance 97,600     Because you can exclude part of your wages, you cannot claim a credit for part of the foreign taxes. Efile taxes free To find that part, do the following. Efile taxes free First, find the amount of business expenses allocable to excluded wages and therefore not deductible. Efile taxes free To do this, multiply the otherwise deductible expenses by a fraction. Efile taxes free That fraction is the excluded wages over your foreign earned income. Efile taxes free   $20,000 × $97,600 $125,000 = $15,616             Next, find the numerator of the fraction by which you will multiply the foreign taxes paid. Efile taxes free To do this, subtract business expenses allocable to excluded wages ($15,616) from excluded wages ($97,600). Efile taxes free The result is $81,984. Efile taxes free Then, find the denominator of the fraction by subtracting all your deductible expenses from all your foreign earned income ($125,000 − $20,000 = $105,000). Efile taxes free Finally, multiply the foreign tax you paid by the resulting fraction. Efile taxes free   $30,000 × $81,984  $105,000 = $23,424 The amount of Country A tax you cannot take a credit for is $23,424. Efile taxes free Taxes on Income From Puerto Rico Exempt From U. Efile taxes free S. Efile taxes free Tax If you have income from Puerto Rican sources that is not taxable, you must reduce your foreign taxes paid or accrued by the taxes allocable to the exempt income. Efile taxes free For information on figuring the reduction, see Publication 570. Efile taxes free Possession Exclusion If you are a bona fide resident of American Samoa and exclude income from sources in American Samoa, you cannot take a credit for the taxes you pay or accrue on the excluded income. Efile taxes free For more information on this exclusion, see Publication 570. Efile taxes free Extraterritorial Income Exclusion You cannot take a credit for taxes you pay on qualifying foreign trade income excluded on Form 8873, Extraterritorial Income Exclusion. Efile taxes free However, see Internal Revenue Code section 943(d) for an exception for certain withholding taxes. Efile taxes free Taxes for Which You Can Only Take an Itemized Deduction You cannot claim a foreign tax credit for foreign income taxes paid or accrued under the following circumstances. Efile taxes free However, you can claim an itemized deduction for these taxes. Efile taxes free See Choosing To Take Credit or Deduction , earlier. Efile taxes free Taxes Imposed By Sanctioned Countries (Section 901(j) Income) You cannot claim a foreign tax credit for income taxes paid or accrued to any country if the income giving rise to the tax is for a period (the sanction period) during which: The Secretary of State has designated the country as one that repeatedly provides support for acts of international terrorism, The United States has severed or does not conduct diplomatic relations with the country, or The United States does not recognize the country's government, and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act. Efile taxes free The following countries meet this description for 2013. Efile taxes free Income taxes paid or accrued to these countries in 2013 do not qualify for the credit. Efile taxes free Cuba. Efile taxes free Iran. Efile taxes free Libya (but see Note later). Efile taxes free North Korea. Efile taxes free Sudan. Efile taxes free Syria. Efile taxes free Waiver of denial of the credit. Efile taxes free   A waiver can be granted to a sanctioned country if the President of the United States determines that granting the waiver is in the national interest of the United States and will expand trade and investment opportunities for U. Efile taxes free S. Efile taxes free companies in the sanctioned country. Efile taxes free The President must report to Congress his intentions to grant the waiver and his reasons for granting the waiver not less than 30 days before the date on which the waiver is granted. Efile taxes free Note. Efile taxes free Effective December 10, 2004, the President granted a waiver to Libya. Efile taxes free Income taxes arising on or after this date qualify for the credit if they meet the other requirements in this publication. Efile taxes free Limit on credit. Efile taxes free   In figuring the foreign tax credit limit, discussed later, income from a sanctioned country is a separate category of foreign income unless a Presidential waiver is granted. Efile taxes free You must fill out a separate Form 1116 for this income. Efile taxes free This will prevent you from claiming a credit for foreign taxes paid or accrued to the sanctioned country. Efile taxes free Example. Efile taxes free You lived and worked in Iran until August, when you were transferred to Italy. Efile taxes free You paid taxes to each country on the income earned in that country. Efile taxes free You cannot claim a foreign tax credit for the foreign taxes paid on the income earned in Iran. Efile taxes free Because the income earned in Iran is a separate category of foreign income, you must fill out a separate Form 1116 for that income. Efile taxes free You cannot take a credit for taxes paid on the income earned in Iran, but that income is taxable by the United States. Efile taxes free Figuring the credit when a sanction ends. Efile taxes free    Table 1 lists the countries for which sanctions have ended or for which a Presidential waiver has been granted. Efile taxes free For any of these countries, you can claim a foreign tax credit for the taxes paid or accrued to that country on the income for the period that begins after the end of the sanction period or the date the Presidential waiver was granted. Efile taxes free Example. Efile taxes free The sanctions against Country X ended on July 31. Efile taxes free On August 19, you receive a distribution from a mutual fund of Country X income. Efile taxes free The fund paid Country X income tax for you on the distribution. Efile taxes free Because the distribution was made after the sanction ended, you may include the foreign tax paid on the distribution to compute your foreign tax credit. Efile taxes free Amounts for the nonsanctioned period. Efile taxes free   If a sanction period ends (or a Presidential waiver is granted) during your tax year and you are not able to determine the actual income and taxes for that period, you can allocate amounts to that period based on the number of days in the period that fall in your tax year. Efile taxes free Multiply the income or taxes for the year by the following fraction to determine the amounts allocable to that period. Efile taxes free   Number of nonsanctioned days in year  Number of days in year Example. Efile taxes free You are a calendar year filer and received $20,000 of income from Country X in 2013 on which you paid tax of $4,500. Efile taxes free Sanctions against Country X ended on July 11, 2013. Efile taxes free You are unable to determine how much of the income or tax is for the nonsanctioned period. Efile taxes free Because your tax year starts on January 1, and the Country X sanction ended on July 11, 2013, 173 days of your tax year are in the nonsanctioned period. Efile taxes free You would compute the income for the nonsanctioned period as follows. Efile taxes free 173 365 × $20,000 = $9,479             You would figure the tax for the nonsanctioned period as follows. Efile taxes free 173 365 × $4,500 = $2,133 To figure your foreign tax credit, you would use $9,479 as the income from Country X and $2,133 as the tax. Efile taxes free Further information. Efile taxes free   The rules for figuring the foreign tax credit after a country's sanction period ends are more fully explained in Revenue Ruling 92-62, Cumulative Bulletin 1992-2, page 193. Efile taxes free This Cumulative Bulletin can be found in many libraries and IRS offices. Efile taxes free Table 1. Efile taxes free Countries Removed From the Sanction List or Granted Presidential Waiver   Sanction Period Country Starting Date Ending Date Iraq February 1, 1991 June 27, 2004 Libya January 1, 1987 December 9, 2004* *Presidential waiver granted for qualified income taxes arising after December 9, 2004. Efile taxes free Taxes Imposed on Certain Dividends You cannot claim a foreign tax credit for withholding tax (defined later ) on dividends paid or accrued if either of the following applies to the dividends. Efile taxes free The dividends are on stock you held for less than 16 days during the 31-day period that begins 15 days before the ex-dividend date (defined later). Efile taxes free The dividends are for a period or periods totaling more than 366 days on preferred stock you held for less than 46 days during the 91-day period that begins 45 days before the ex-dividend date. Efile taxes free If the dividend is not for more than 366 days, rule (1) applies to the preferred stock. Efile taxes free When figuring how long you held the stock, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. Efile taxes free Regardless of how long you held the stock, you cannot claim the credit to the extent you have an obligation under a short sale or otherwise to make payments related to the dividend for positions in substantially similar or related property. Efile taxes free Withholding tax. Efile taxes free   For this purpose, withholding tax includes any tax determined on a gross basis. Efile taxes free It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. Efile taxes free Ex-dividend date. Efile taxes free   The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock is not entitled to receive the next dividend payment. Efile taxes free Example 1. Efile taxes free You bought common stock from a foreign corporation on November 3. Efile taxes free You sold the stock on November 19. Efile taxes free You received a dividend on this stock because you owned it on the ex-dividend date of November 5. Efile taxes free To claim the credit, you must have held the stock for at least 16 days within the 31-day period that began on October 21 (15 days before the ex-dividend date). Efile taxes free Because you held the stock for 16 days, from November 4 until November 19, you are entitled to the credit. Efile taxes free Example 2. Efile taxes free The facts are the same as in Example 1 except that you sold the stock on November 14. Efile taxes free You held the stock for only 11 days. Efile taxes free You are not entitled to the credit. Efile taxes free Exception. Efile taxes free   If you are a securities dealer who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes paid on dividends regardless of how long you held the stock or whether you were obligated to make payments for positions in substantially similar or related property. Efile taxes free See section 901(k)(4) of the Internal Revenue Code for more information. Efile taxes free Taxes Withheld on Income or Gain (Other Than Dividends) For income or gain (other than dividends) paid or accrued on property, you cannot claim a foreign tax credit for withholding tax (defined later): If you have not held the property for at least 16 days during the 31-day period that begins 15 days before the date on which the right to receive the payment arises, or To the extent you have to make related payments on positions in substantially similar or related property. Efile taxes free When figuring how long you held the property, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. Efile taxes free Withholding tax. Efile taxes free   For this purpose, withholding tax includes any tax determined on a gross basis. Efile taxes free It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. Efile taxes free Exception for dealers. Efile taxes free   If you are a dealer in property who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes withheld on income or gain from that property regardless of how long you held it or whether you have to make related payments on positions in substantially similar or related property. Efile taxes free See section 901(I)(2) of the Internal Revenue Code for more information. Efile taxes free Covered Asset Acquisition ???You cannot take a credit for the disqualified portion of any foreign tax paid or accrued in connection with a covered asset acquisition. Efile taxes free A covered asset acquisition includes certain acquisitions that result in a stepped-up basis for U. Efile taxes free S. Efile taxes free tax purposes but not for foreign tax purposes. Efile taxes free For more information, see Internal Revenue Code section 901(m). Efile taxes free The IRS intends to issue guidance that will explain this provision in greater detail. Efile taxes free Taxes in Connection With the Purchase or Sale of Oil or Gas You cannot claim a foreign tax credit for taxes paid or accrued to a foreign country in connection with the purchase or sale of oil or gas extracted in that country if you do not have an economic interest in the oil or gas, and the purchase price or sales price is different from the fair market value of the oil or gas at the time of purchase or sale. Efile taxes free Taxes on Foreign Mineral Income You must reduce any taxes paid or accrued to a foreign country or possession on mineral income from that country or possession if you were allowed a deduction for percentage depletion for any part of the mineral income. Efile taxes free For details, see Regulations section 1. Efile taxes free 901-3. Efile taxes free Taxes From International Boycott Operations If you participate in or cooperate with an international boycott during the tax year, your foreign taxes resulting from boycott activities will reduce the total taxes available for credit. Efile taxes free See the instructions for line 12 in the Form 1116 instructions to figure this reduction. Efile taxes free In most cases, this rule does not apply to employees with wages who are working and living in boycotting countries, or to retirees with pensions who are living in these countries. Efile taxes free List of boycotting countries. Efile taxes free   A list of the countries which may require participation in or cooperation with an international boycott is published by the Department of the Treasury. Efile taxes free As of November 2013, the following countries are listed. Efile taxes free Iraq. Efile taxes free Kuwait. Efile taxes free Lebanon. Efile taxes free Libya. Efile taxes free Qatar. Efile taxes free Saudi Arabia. Efile taxes free Syria. Efile taxes free United Arab Emirates. Efile taxes free Yemen. Efile taxes free    For information concerning changes to the list, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Determinations of whether the boycott rule applies. Efile taxes free   You may request a determination from the Internal Revenue Service as to whether a particular operation constitutes participation in or cooperation with an international boycott. Efile taxes free The procedures for obtaining a determination from the Service are outlined in Revenue Procedure 77-9 in Cumulative Bulletin 1977-1. Efile taxes free Cumulative Bulletins are available in most IRS offices and you are welcome to read them there. Efile taxes free Public inspection. Efile taxes free   A determination and any related background file is open to public inspection. Efile taxes free However, your identity and certain other information will remain confidential. Efile taxes free Reporting requirements. Efile taxes free   You must file a report with the IRS if you or any of the following persons have operations in or related to a boycotting country or with the government, a company, or a national of a boycotting country. Efile taxes free A foreign corporation in which you own 10% or more of the voting power of all voting stock but only if you own the stock of the foreign corporation directly or through foreign entities. Efile taxes free A partnership in which you are a partner. Efile taxes free A trust you are treated as owning. Efile taxes free Form 5713 required. Efile taxes free   If you have to file a report, you must use Form 5713, International Boycott Report, and attach all supporting schedules. Efile taxes free See the Instructions for Form 5713 for information on when and where to file the form. Efile taxes free Penalty for failure to file. Efile taxes free   If you willfully fail to make a report, in addition to other penalties, you may be fined $25,000 or imprisoned for no more than one year, or both. Efile taxes free Taxes on Combined Foreign Oil and Gas Income You must reduce your foreign taxes by a portion of any foreign taxes imposed on combined foreign oil and gas income. Efile taxes free The amount of the reduction is the amount by which your foreign oil and gas taxes exceed the amount of your combined foreign oil and gas income multiplied by a fraction equal to your pre-credit U. Efile taxes free S. Efile taxes free tax liability (Form 1040, line 44) divided by your worldwide taxable income. Efile taxes free You may be entitled to carry over to other years taxes reduced under this rule. Efile taxes free See Internal Revenue Code section 907(f). Efile taxes free Combined foreign oil and gas income means the sum of foreign oil related income and foreign oil and gas extraction income. Efile taxes free Foreign oil and gas taxes are the sum of foreign oil and gas extraction taxes and foreign oil related taxes. Efile taxes free Taxes of U. Efile taxes free S. Efile taxes free Persons Controlling Foreign Corporations and Partnerships If you had control of a foreign corporation or a foreign partnership for the annual accounting period of that corporation or partnership that ended with or within your tax year, you may have to file an annual information return. Efile taxes free If you do not file the required information return, you may have to reduce the foreign taxes that may be used for the foreign tax credit. Efile taxes free See Penalty for not filing Form 5471 or Form 8865 , later. Efile taxes free U. Efile taxes free S. Efile taxes free persons controlling foreign corporations. Efile taxes free   If you are a U. Efile taxes free S. Efile taxes free citizen or resident who had control of a foreign corporation for an uninterrupted period of at least 30 days during the annual accounting period of that corporation, you may have to file an annual information return on Form 5471, Information Return of U. Efile taxes free S. Efile taxes free Persons With Respect To Certain Foreign Corporations. Efile taxes free Under this rule, you generally had control of a foreign corporation if at any time during your tax year you owned: Stock possessing more than 50% of the total combined voting power of all classes of stock entitled to vote, or More than 50% of the total value of shares of all classes of stock of the foreign corporation. Efile taxes free U. Efile taxes free S. Efile taxes free persons controlling foreign partnerships. Efile taxes free   If you are a U. Efile taxes free S. Efile taxes free citizen or resident who had control of a foreign partnership at any time during the partnership's tax year, you may have to file
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The Trustee Program protects the integrity of the Federal bankruptcy system. The Program monitors the conduct of bankruptcy parties and private estate trustees. It also identifies and helps investigate bankruptcy fraud and abuse.

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Efile taxes free Publication 15 - Introductory Material Table of Contents Future Developments What's New Reminders Electronic Filing and Payment Forms in Spanish Hiring New Employees Paying Wages, Pensions, or Annuities Information Returns Nonpayroll Income Tax Withholding Recordkeeping Change of Business Address or Responsible Party Private Delivery Services Telephone Help Ordering Employer Tax Forms and Publications Filing Addresses Dishonored Payments Photographs of Missing Children Calendar Introduction Future Developments For the latest information about developments related to Publication 15 (Circular E), such as legislation enacted after it was published, go to www. Efile taxes free irs. Efile taxes free gov/pub15. Efile taxes free What's New Social security and Medicare tax for 2014. Efile taxes free  The social security tax rate is 6. Efile taxes free 2% each for the employee and employer, unchanged from 2013. Efile taxes free The social security wage base limit is $117,000. Efile taxes free The Medicare tax rate is 1. Efile taxes free 45% each for the employee and employer, unchanged from 2013. Efile taxes free There is no wage base limit for Medicare tax. Efile taxes free Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. Efile taxes free Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation. Efile taxes free 2014 withholdng tables. Efile taxes free  This publication includes the 2014 Percentage Method Tables and Wage Bracket Tables for Income Tax Withholding. Efile taxes free Withholding allowance. Efile taxes free  The 2014 amount for one withholding allowance on an annual basis is $3,950. Efile taxes free Voluntary withholding on dividends and other distributions by an Alaska Native Corporation (ANC). Efile taxes free  A shareholder of an ANC may now request voluntary income tax withholding on dividends and other distributions paid by an ANC. Efile taxes free A shareholder may request voluntary withholding by giving the ANC a completed Form W-4V, Voluntary Withholding Request. Efile taxes free For more information see Notice 2013-77, 2013-50 I. Efile taxes free R. Efile taxes free B. Efile taxes free 632, available at www. Efile taxes free irs. Efile taxes free gov/irb/2013-50_IRB/ar10. Efile taxes free html. Efile taxes free Change of responsible party. Efile taxes free  Beginning January 1, 2014, any entity with an employer identification number (EIN) must file Form 8822-B, Change of Address or Responsible Party — Business, to report the latest change to its responsible party. Efile taxes free Form 8822-B must be filed within 60 days of the change. Efile taxes free If the change in the identity of your responsible party occurred before 2014, and you have not previously notified the IRS of the change, file Form 8822-B before March 1, 2014, reporting only the most recent change. Efile taxes free For a definition of “responsible party,” see the Form 8822-B instructions. Efile taxes free Same-sex marriage. Efile taxes free  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Efile taxes free For more information, see Revenue Ruling 2013-17, 2013-38 I. Efile taxes free R. Efile taxes free B. Efile taxes free 201, available at www. Efile taxes free irs. Efile taxes free gov/irb/2013-38_IRB/ar07. Efile taxes free html. Efile taxes free Notice 2013-61 provides special administrative procedures for employers to make claims for refunds or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. Efile taxes free Notice 2013-61, 2013-44 I. Efile taxes free R. Efile taxes free B. Efile taxes free 432, is available at www. Efile taxes free irs. Efile taxes free gov/irb/2013-44_IRB/ar10. Efile taxes free html. Efile taxes free Reminders Additional Medicare Tax withholding. Efile taxes free  In addition to withholding Medicare tax at 1. Efile taxes free 45%, you must withhold a 0. Efile taxes free 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Efile taxes free You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Efile taxes free Additional Medicare Tax is only imposed on the employee. Efile taxes free There is no employer share of Additional Medicare Tax. Efile taxes free All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Efile taxes free For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments , in section 15. Efile taxes free For more information on Additional Medicare Tax, visit IRS. Efile taxes free gov and enter “Additional Medicare Tax” in the search box. Efile taxes free Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. Efile taxes free  The work opportunity tax credit is available for eligible unemployed veterans who began work on or after November 22, 2011, and before January 1, 2014. Efile taxes free Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Efile taxes free For more information, visit IRS. Efile taxes free gov and enter “work opportunity tax credit” in the search box. Efile taxes free Outsourcing payroll duties. Efile taxes free  Employers are responsible to ensure that tax returns are filed and deposits and payments are made, even if the employer contracts with a third party to perform these acts. Efile taxes free The employer remains responsible if the third party fails to perform any required action. Efile taxes free If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer such as a payroll service provider or reporting agent, visit IRS. Efile taxes free gov and enter “outsourcing payroll duties” in the search box for helpful information on this topic. Efile taxes free COBRA premium assistance credit. Efile taxes free  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months. Efile taxes free See COBRA premium assistance credit under Introduction. Efile taxes free Federal tax deposits must be made by electronic funds transfer. Efile taxes free  You must use electronic funds transfer to make all federal tax deposits. Efile taxes free Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Efile taxes free If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Efile taxes free Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Efile taxes free EFTPS is a free service provided by the Department of Treasury. Efile taxes free Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Efile taxes free For more information on making federal tax deposits, see How To Deposit in section 11. Efile taxes free To get more information about EFTPS or to enroll in EFTPS, visit www. Efile taxes free eftps. Efile taxes free gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Efile taxes free Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. Efile taxes free You must receive written notice from the IRS to file Form 944. Efile taxes free  If you have been filing Forms 941, Employer's QUARTERLY Federal Tax Return (or Forms 941-SS, Employer's QUARTERLY Federal Tax Return—American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U. Efile taxes free S. Efile taxes free Virgin Islands, or Formularios 941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono), and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941, you must contact the IRS to request to file Form 944. Efile taxes free You must receive written notice from the IRS to file Form 944 instead of Forms 941 before you may file this form. Efile taxes free For more information on requesting to file Form 944, visit IRS. Efile taxes free gov and enter “file employment taxes annually” in the search box. Efile taxes free Employers can request to file Forms 941 instead of Form 944. Efile taxes free  If you received notice from the IRS and have been filing Form 944 but would like to file Forms 941 instead, you must contact the IRS to request to file Forms 941. Efile taxes free You must receive written notice from the IRS to file Forms 941 instead of Form 944 before you may file these forms. Efile taxes free For more information on requesting to file Form 944, visit IRS. Efile taxes free gov and enter “file employment taxes annually” in the search box. Efile taxes free Aggregate Form 941 filers. Efile taxes free  Agents must complete Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, when filing an aggregate Form 941. Efile taxes free Aggregate Forms 941 may only be filed by agents approved by the IRS under section 3504 of the Internal Revenue Code. Efile taxes free To request approval to act as an agent for an employer, the agent files Form 2678, Employer/Payer Appointment of Agent, with the IRS. Efile taxes free Aggregate Form 940 filers. Efile taxes free  Agents must complete Schedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers, when filing an aggregate Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Efile taxes free Aggregate Forms 940 can be filed by agents acting on behalf of home care service recipients who receive home care services through a program administered by a federal, state, or local government. Efile taxes free To request approval to act as an agent on behalf of home care service recipients, the agent files Form 2678 with the IRS. Efile taxes free Electronic Filing and Payment  Now, more than ever before, businesses can enjoy the benefits of filing and paying their federal taxes electronically. Efile taxes free Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make filing and payment easier. Efile taxes free Spend less time and worry about taxes and more time running your business. Efile taxes free Use e-file and the Electronic Federal Tax Payment System (EFTPS) to your benefit. Efile taxes free For e-file, visit www. Efile taxes free irs. Efile taxes free gov/efile for additional information. Efile taxes free For EFTPS, visit www. Efile taxes free eftps. Efile taxes free gov or call EFTPS Customer Service at 1-800-555-4477 or 1-800-733-4829 (TDD). Efile taxes free For electronic filing of Forms W-2, Wage and Tax Statement, visit www. Efile taxes free socialsecurity. Efile taxes free gov/employer. Efile taxes free If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required. Efile taxes free If a valid EIN is not provided, the return or payment will not be processed. Efile taxes free This may result in penalties and delays in processing your return or payment. Efile taxes free Electronic funds withdrawal (EFW). Efile taxes free  If you file Form 940, Form 941, Form 944, or Form 945 electronically, you can e-file and e-pay (electronic funds withdrawal) the balance due in a single step using tax preparation software or through a tax professional. Efile taxes free However, do not use EFW to make federal tax deposits. Efile taxes free For more information on paying your taxes using EFW, visit the IRS website at www. Efile taxes free irs. Efile taxes free gov/e-pay. Efile taxes free A fee may be charged to file electronically. Efile taxes free Credit or debit card payments. Efile taxes free  For information on paying your taxes with a credit or debit card, visit the IRS website at www. Efile taxes free irs. Efile taxes free gov/e-pay. Efile taxes free However, do not use credit or debit cards to make federal tax deposits. Efile taxes free Forms in Spanish You can provide Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, in place of Form W-4, Employee's Withholding Allowance Certificate, to your Spanish-speaking employees. Efile taxes free For more information, see Publicación 17(SP), El Impuesto Federal sobre los Ingresos (Para Personas Físicas). Efile taxes free For nonemployees, Formulario W-9(SP), Solicitud y Certificación del Número de Identificación del Contribuyente, may be used in place of Form W-9, Request for Taxpayer Identification Number and Certification. Efile taxes free Hiring New Employees Eligibility for employment. Efile taxes free  You must verify that each new employee is legally eligible to work in the United States. Efile taxes free This includes completing the U. Efile taxes free S. Efile taxes free Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. Efile taxes free You can get the form from USCIS offices or by calling 1-800-870-3676. Efile taxes free Contact the USCIS at 1-800-375-5283, or visit the USCIS website at www. Efile taxes free uscis. Efile taxes free gov for more information. Efile taxes free New hire reporting. Efile taxes free  You are required to report any new employee to a designated state new hire registry. Efile taxes free A new employee is an employee who has not previously been employed by you or was previously employed by you but has been separated from such prior employment for at least 60 consecutive days. Efile taxes free Many states accept a copy of Form W-4 with employer information added. Efile taxes free Visit the Office of Child Support Enforcement website at www. Efile taxes free acf. Efile taxes free hhs. Efile taxes free gov/programs/cse/newhire for more information. Efile taxes free W-4 request. Efile taxes free  Ask each new employee to complete the 2014 Form W-4. Efile taxes free See section 9. Efile taxes free Name and social security number. Efile taxes free  Record each new employee's name and number from his or her social security card. Efile taxes free Any employee without a social security card should apply for one. Efile taxes free See section 4. Efile taxes free Paying Wages, Pensions, or Annuities Correcting Form 941 or Form 944. Efile taxes free  If you discover an error on a previously filed Form 941 or Form 944, make the correction using Form 941-X, Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund, or Form 944-X, Adjusted Employer's ANNUAL Federal Tax Return or Claim for Refund. Efile taxes free Forms 941-X and 944-X are stand-alone forms, meaning taxpayers can file them when an error is discovered. Efile taxes free Forms 941-X and 944-X are used by employers to claim refunds or abatements of employment taxes, rather than Form 843, Claim for Refund and Request for Abatement. Efile taxes free See section 13 for more information. Efile taxes free Income tax withholding. Efile taxes free  Withhold federal income tax from each wage payment or supplemental unemployment compensation plan benefit payment according to the employee's Form W-4 and the correct withholding table. Efile taxes free If you have nonresident alien employees, see Withholding income taxes on the wages of nonresident alien employees in section 9. Efile taxes free Withhold from periodic pension and annuity payments as if the recipient is married claiming three withholding allowances, unless he or she has provided Form W-4P, Withholding Certificate for Pension or Annuity Payments, either electing no withholding or giving a different number of allowances, marital status, or an additional amount to be withheld. Efile taxes free Do not withhold on direct rollovers from qualified plans or governmental section 457(b) plans. Efile taxes free See section 9 and Publication 15-A, Employer's Supplemental Tax Guide. Efile taxes free Publication 15-A includes information about withholding on pensions and annuities. Efile taxes free Zero wage return. Efile taxes free  If you have not filed a “final” Form 941 or Form 944, or are not a “seasonal” employer, you must continue to file a Form 941 or Form 944 even for periods during which you paid no wages. Efile taxes free The IRS encourages you to file your “Zero Wage” Forms 941 or 944 electronically using IRS e-file at www. Efile taxes free irs. Efile taxes free gov/efile. Efile taxes free Employer Responsibilities Employer Responsibilities: The following list provides a brief summary of your basic responsibilities. Efile taxes free Because the individual circumstances for each employer can vary greatly, responsibilities for withholding, depositing, and reporting employment taxes can differ. Efile taxes free Each item in this list has a page reference to a more detailed discussion in this publication. Efile taxes free   New Employees: Page     Annually (By January 31 of the current year, Page □ Verify work eligibility of new employees 3     for the prior year):   □ Record employees' names and SSNs from     □ File Form 944 if required (pay tax with return if     social security cards 4     not required to deposit) 29 □ Ask employees for Form W-4 3     Annually (see Calendar for due dates):     Each Payday:     □ Remind employees to submit a new Form W-4   □ Withhold federal income tax based on each       if they need to change their withholding 20   employee's Form W-4 20   □ Ask for a new Form W-4 from employees   □ Withhold employee's share of social security       claiming exemption from income tax     and Medicare taxes 23     withholding 20 □ Deposit:     □ Reconcile Forms 941 (or Form 944) with Forms     • Withheld income tax       W-2 and W-3 31   • Withheld and employer social security taxes     □ Furnish each employee a Form W-2 7   • Withheld and employer Medicare taxes 24   □ File Copy A of Forms W-2 and the transmittal     Note:Due date of deposit generally depends       Form W-3 with the SSA 8   on your deposit schedule (monthly or semiweekly)     □ Furnish each other payee a Form 1099 (for example, Form 1099-MISC, Miscellaneous Income) 7   Quarterly (By April 30, July 31, October 31, and January 31):     □ File Forms 1099 and the transmittal Form   □ Deposit FUTA tax if undeposited amount       1096 8   is over $500 35   □ File Form 940 7 □ File Form 941 (pay tax with return if not     □ File Form 945 for any nonpayroll income tax     required to deposit) 29     withholding 8 Information Returns You may be required to file information returns to report certain types of payments made during the year. Efile taxes free For example, you must file Form 1099-MISC, Miscellaneous Income, to report payments of $600 or more to persons not treated as employees (for example, independent contractors) for services performed for your trade or business. Efile taxes free For details about filing Forms 1099 and for information about required electronic filing, see the General Instructions for Certain Information Returns for general information and the separate, specific instructions for each information return you file (for example, Instructions for Form 1099-MISC). Efile taxes free Generally, do not use Forms 1099 to report wages and other compensation you paid to employees; report these on Form W-2. Efile taxes free See the General Instructions for Forms W-2 and W-3 for details about filing Form W-2 and for information about required electronic filing. Efile taxes free If you file 250 or more Forms 1099, you must file them electronically. Efile taxes free If you file 250 or more Forms W-2, you must file them electronically. Efile taxes free SSA will not accept Forms W-2 and W-3 filed on magnetic media. Efile taxes free Information reporting customer service site. Efile taxes free  The IRS operates the Enterprise Computing Center—Martinsburg, a centralized customer service site, to answer questions about reporting on Forms W-2, W-3, 1099, and other information returns. Efile taxes free If you have questions related to reporting on information returns, call 1-866-455-7438 (toll free), 304-263-8700 (toll call), or 304-267-3367 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Efile taxes free The center can also be reached by email at mccirp@irs. Efile taxes free gov. Efile taxes free Do not include tax identification numbers (TINs) or attachments in email correspondence because electronic mail is not secure. Efile taxes free Nonpayroll Income Tax Withholding Nonpayroll federal income tax withholding (reported on Forms 1099 and Form W-2G) must be reported on Form 945, Annual Return of Withheld Federal Income Tax. Efile taxes free Separate deposits are required for payroll (Form 941 or Form 944) and nonpayroll (Form 945) withholding. Efile taxes free Nonpayroll items include: Pensions (including distributions from tax-favored retirement plans, for example, section 401(k), section 403(b), and governmental section 457(b) plans) and annuities. Efile taxes free Military retirement. Efile taxes free Gambling winnings. Efile taxes free Indian gaming profits. Efile taxes free Certain government payments, such as unemployment compensation, social security, and Tier 1 railroad retirement benefits, subject to voluntary withholding. Efile taxes free Payments subject to backup withholding. Efile taxes free For details on depositing and reporting nonpayroll income tax withholding, see the Instructions for Form 945. Efile taxes free All income tax withholding reported on Form W-2 must be reported on Form 941, Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, Form 944, or Schedule H (Form 1040), Household Employment Taxes. Efile taxes free Distributions from nonqualified pension plans and deferred compensation plans. Efile taxes free  Because distributions to participants from some nonqualified pension plans and deferred compensation plans (including section 457(b) plans of tax-exempt organizations) are treated as wages and are reported on Form W-2, income tax withheld must be reported on Form 941 or Form 944, not on Form 945. Efile taxes free However, distributions from such plans to a beneficiary or estate of a deceased employee are not wages and are reported on Forms 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Efile taxes free ; income tax withheld must be reported on Form 945. Efile taxes free Backup withholding. Efile taxes free  You generally must withhold 28% of certain taxable payments if the payee fails to furnish you with his or her correct taxpayer identification number (TIN). Efile taxes free This withholding is referred to as “backup withholding. Efile taxes free ” Payments subject to backup withholding include interest, dividends, patronage dividends, rents, royalties, commissions, nonemployee compensation, and certain other payments you make in the course of your trade or business. Efile taxes free In addition, transactions by brokers and barter exchanges and certain payments made by fishing boat operators are subject to backup withholding. Efile taxes free Backup withholding does not apply to wages, pensions, annuities, IRAs (including simplified employee pension (SEP) and SIMPLE retirement plans), section 404(k) distributions from an employee stock ownership plan (ESOP), medical savings accounts, health savings accounts, long-term-care benefits, or real estate transactions. Efile taxes free You can use Form W-9 or Formulario W-9(SP) to request payees to furnish a TIN and to certify the number furnished is correct. Efile taxes free You can also use Form W-9 or Formulario W-9(SP) to get certifications from payees that they are not subject to backup withholding or that they are exempt from backup withholding. Efile taxes free The Instructions for the Requester of Form W-9 or Formulario W-9(SP) includes a list of types of payees who are exempt from backup withholding. Efile taxes free For more information, see Publication 1281, Backup Withholding for Missing and Incorrect Name/TIN(s). Efile taxes free Recordkeeping Keep all records of employment taxes for at least 4 years. Efile taxes free These should be available for IRS review. Efile taxes free Your records should include the following information. Efile taxes free Your EIN. Efile taxes free Amounts and dates of all wage, annuity, and pension payments. Efile taxes free Amounts of tips reported to you by your employees. Efile taxes free Records of allocated tips. Efile taxes free The fair market value of in-kind wages paid. Efile taxes free Names, addresses, social security numbers, and occupations of employees and recipients. Efile taxes free Any employee copies of Forms W-2 and W-2c returned to you as undeliverable. Efile taxes free Dates of employment for each employee. Efile taxes free Periods for which employees and recipients were paid while absent due to sickness or injury and the amount and weekly rate of payments you or third party payors made to them. Efile taxes free Copies of employees' and recipients' income tax withholding allowance certificates (Forms W-4, W-4P, W-4(SP), W-4S, and W-4V). Efile taxes free Copies of employees' Earned Income Credit Advance Payment Certificates (Forms W-5 and W-5(SP)). Efile taxes free Dates and amounts of tax deposits you made and acknowledgment numbers for deposits made by EFTPS. Efile taxes free Copies of returns filed and confirmation numbers. Efile taxes free Records of fringe benefits and expense reimbursements provided to your employees, including substantiation. Efile taxes free Change of Business Address or Responsible Party To notify the IRS of a change in business address or responsible party, file Form 8822-B. Efile taxes free Do not mail Form 8822-B with your employment tax return. Efile taxes free Private Delivery Services You can use certain private delivery services designated by the IRS to mail tax returns and payments. Efile taxes free The list includes only the following: DHL Express (DHL): DHL Same Day Service. Efile taxes free Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. Efile taxes free United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Efile taxes free M. Efile taxes free , UPS Worldwide Express Plus, and UPS Worldwide Express. Efile taxes free For the IRS mailing address to use if you are using a private delivery service, go to IRS. Efile taxes free gov and enter “private delivery service” in the search box. Efile taxes free Your private delivery service can tell you how to get written proof of the mailing date. Efile taxes free   Private delivery services cannot deliver items to P. Efile taxes free O. Efile taxes free boxes. Efile taxes free You must use the U. Efile taxes free S. Efile taxes free Postal Service to mail any item to an IRS P. Efile taxes free O. Efile taxes free box address. Efile taxes free Telephone Help Tax questions. Efile taxes free   You can call the IRS Business and Specialty Tax Line with your employment tax questions at 1-800-829-4933. Efile taxes free Help for people with disabilities. Efile taxes free  You may call 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability) with any tax question or to order forms and publications. Efile taxes free You may also use this number for assistance with unresolved tax problems. Efile taxes free Recorded tax information (TeleTax). Efile taxes free  The IRS TeleTax service provides recorded tax information on topics that answer many individual and business federal tax questions. Efile taxes free You can listen to up to three topics on each call you make. Efile taxes free Touch-Tone service is available 24 hours a day, 7 days a week. Efile taxes free TeleTax topics are also available on the IRS website at www. Efile taxes free irs. Efile taxes free gov/taxtopics. Efile taxes free Most tax topics listed below are also available in Spanish. Efile taxes free For a complete list of TeleTax topics in Spanish, visit the IRS website at www. Efile taxes free irs. Efile taxes free gov/Spanish/Índice-de-Temas-Tributarios-Año-2013. Efile taxes free A list of employment tax topics is provided next. Efile taxes free Select, by number, the topic you want to hear and call 1-800-829-4477. Efile taxes free For the directory of all topics, select Topic 123. Efile taxes free Teletax Topics Topic No. Efile taxes free Subject 751 Social Security and Medicare Withholding Rates 752 Form W-2—Where, When, and How to File 753 Form W-4—Employee's Withholding Allowance Certificate 755 Employer Identification Number (EIN)—How to Apply 756 Employment Taxes for Household Employees 757 Form 941 and Form 944—Deposit Requirements 758 Form 941—Employer's QUARTERLY Federal Tax Return and Form 944—Employer's ANNUAL Federal Tax Return 759 Form 940—Employer's Annual Federal Unemployment (FUTA) Tax Return—Filing and Deposit Requirements 760 Reporting and Deposit Requirements for Agricultural Employers 761 Tips—Withholding and Reporting 762 Independent Contractor vs. Efile taxes free Employee 763 The “Affordable Care Act” of 2010 Offers Employers New Tax Deductions and Credits Additional employment tax information. Efile taxes free  Visit the IRS website at www. Efile taxes free irs. Efile taxes free gov/businesses and click on the Employment Taxes link under Businesses Topics. Efile taxes free Ordering Employer Tax Forms and Publications You can order employer tax forms and publications and information returns online at www. Efile taxes free irs. Efile taxes free gov/businesses. Efile taxes free To order 2013 and 2014 forms, click on the Online Ordering for Information Returns and Employer Returns link. Efile taxes free You may also order employer tax forms and publications and information returns by calling 1-800-TAX-FORM (1-800-829-3676). Efile taxes free Instead of ordering paper Forms W-2 and W-3, consider filing them electronically using the Social Security Administration's (SSA) free e-file service. Efile taxes free Visit the SSA's Employer W-2 Filing Instructions & Information website at www. Efile taxes free socialsecurity. Efile taxes free gov/employer to register for Business Services Online. Efile taxes free You will be able to create Forms W-2 online and submit them to the SSA by typing your wage information into easy-to-use fill-in fields. Efile taxes free In addition, you can print out completed copies of Forms W-2 to file with state or local governments, distribute to your employees, and keep for your records. Efile taxes free Form W-3 will be created for you based on your Forms W-2. Efile taxes free Filing Addresses Generally, your filing address for Forms 940, 941, 943, 944, 945, and CT-1 depends on the location of your residence or principal place of business and whether or not you are including a payment with your return. Efile taxes free There are separate filing addresses for these returns if you are a tax-exempt organization or government entity. Efile taxes free See the separate instructions for Forms 940, 941, 943, 944, 945, or CT-1 for the filing addresses. Efile taxes free Dishonored Payments Any form of payment that is dishonored and returned from a financial institution is subject to a penalty. Efile taxes free The penalty is $25 or 2% of the payment, whichever is more. Efile taxes free However, the penalty on dishonored payments of $24. Efile taxes free 99 or less is an amount equal to the payment. Efile taxes free For example, a dishonored payment of $18 is charged a penalty of $18. Efile taxes free Photographs of Missing Children The IRS is a proud partner with the National Center for Missing and Exploited Children. Efile taxes free Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Efile taxes free 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. Efile taxes free Calendar The following is a list of important dates. Efile taxes free Also see Publication 509, Tax Calendars. Efile taxes free   If any date shown below for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, use the next business day. Efile taxes free A statewide legal holiday delays a filing due date only if the IRS office where you are required to file is located in that state. Efile taxes free However, a statewide legal holiday does not delay the due date of federal tax deposits. Efile taxes free See Deposits on Business Days Only in section 11. Efile taxes free For any filing due date, you will meet the “file” or “furnish” requirement if the envelope containing the return or form is properly addressed, contains sufficient postage, and is postmarked by the U. Efile taxes free S. Efile taxes free Postal Service on or before the due date, or sent by an IRS-designated private delivery service on or before the due date. Efile taxes free See Private Delivery Services under Reminders for more information. Efile taxes free Introduction This publication explains your tax responsibilities as an employer. Efile taxes free It explains the requirements for withholding, depositing, reporting, paying, and correcting employment taxes. Efile taxes free It explains the forms you must give to your employees, those your employees must give to you, and those you must send to the IRS and SSA. Efile taxes free This guide also has tax tables you need to figure the taxes to withhold from each employee for 2014. Efile taxes free References to “income tax” in this guide apply only to “federal” income tax. Efile taxes free Contact your state or local tax department to determine if their rules are different. Efile taxes free Additional employment tax information is available in Publication 15-A. Efile taxes free Publication 15-A includes specialized information supplementing the basic employment tax information provided in this publication. Efile taxes free Publication 15-B, Employer's Tax Guide to Fringe Benefits, contains information about the employment tax treatment and valuation of various types of noncash compensation. Efile taxes free Most employers must withhold (except FUTA), deposit, report, and pay the following employment taxes. Efile taxes free Income tax. Efile taxes free Social security tax. Efile taxes free Medicare tax. Efile taxes free FUTA tax. Efile taxes free There are exceptions to these requirements. Efile taxes free See section 15 for guidance. Efile taxes free Railroad retirement taxes are explained in the Instructions for Form CT-1. Efile taxes free Comments and suggestions. Efile taxes free   We welcome your comments about this publication and your suggestions for future editions. Efile taxes free   You can write to us at the following address: Internal Revenue Service Tax Forms & Publications Division 1111 Constitution Ave. Efile taxes free NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Efile taxes free Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Efile taxes free   You can also send us comments from www. Efile taxes free irs. Efile taxes free gov/formspubs. Efile taxes free Click on More Information and then click on Comment on Tax Forms and Publications. Efile taxes free   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. Efile taxes free Federal Government employers. Efile taxes free   The information in this publication, including the rules for making federal tax deposits, applies to federal agencies. Efile taxes free State and local government employers. Efile taxes free   Payments to employees for services in the employ of state and local government employers are generally subject to federal income tax withholding but not FUTA tax. Efile taxes free Most elected and appointed public officials of state or local governments are employees under common law rules. Efile taxes free See chapter 3 of Publication 963, Federal-State Reference Guide. Efile taxes free In addition, wages, with certain exceptions, are subject to social security and Medicare taxes. Efile taxes free See section 15 for more information on the exceptions. Efile taxes free   If an election worker is employed in another capacity with the same government entity, see Revenue Ruling 2000-6 on page 512 of Internal Revenue Bulletin 2000-6 at www. Efile taxes free irs. Efile taxes free gov/pub/irs-irbs/irb00-06. Efile taxes free pdf. Efile taxes free   You can get information on reporting and social security coverage from your local IRS office. Efile taxes free If you have any questions about coverage under a section 218 (Social Security Act) agreement, contact the appropriate state official. Efile taxes free To find your State Social Security Administrator, visit the National Conference of State Social Security Administrators website at www. Efile taxes free ncsssa. Efile taxes free org. Efile taxes free Disregarded entities and qualified subchapter S subsidiaries (QSubs). Efile taxes free   Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. Efile taxes free Eligible single-member entities that have not elected to be taxed as corporations must report and pay employment taxes on wages paid to their employees using the entities' own names and EINs. Efile taxes free See Regulations sections 1. Efile taxes free 1361-4(a)(7) and 301. Efile taxes free 7701-2(c)(2)(iv). Efile taxes free COBRA premium assistance credit. Efile taxes free   The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. Efile taxes free COBRA generally covers multiemployer health plans and health plans maintained by private-sector employers (other than churches) with 20 or more full and part-time employees. Efile taxes free Parallel requirements apply to these plans under the Employee Retirement Income Security Act of 1974 (ERISA). Efile taxes free Under the Public Health Service Act, COBRA requirements apply also to health plans covering state or local government employees. Efile taxes free Similar requirements apply under the Federal Employees Health Benefits Program and under some state laws. Efile taxes free For the premium assistance (or subsidy) discussed below, these requirements are all referred to as COBRA requirements. Efile taxes free   Under the American Recovery and Reinvestment Act of 2009 (ARRA), employers are allowed a credit against “payroll taxes” (referred to in this publication as “employment taxes”) for providing COBRA premium assistance to assistance eligible individuals. Efile taxes free For periods of COBRA continuation coverage beginning after February 16, 2009, a group health plan must treat an assistance eligible individual as having paid the required COBRA continuation coverage premium if the individual elects COBRA coverage and pays 35% of the amount of the premium. Efile taxes free   An assistance eligible individual is a qualified beneficiary of an employer's group health plan who is eligible for COBRA continuation coverage during the period beginning September 1, 2008, and ending May 31, 2010, due to the involuntarily termination from employment of a covered employee during the period and elects continuation COBRA coverage. Efile taxes free The assistance for the coverage can last up to 15 months. Efile taxes free   Employees terminated during the period beginning September 1, 2008, and ending May 31, 2010, who received a severance package that delayed the start of the COBRA continuation coverage, may still be eligible for premium assistance for COBRA continuation coverage. Efile taxes free For more information see Notice 2009-27, 2009-16 I. Efile taxes free R. Efile taxes free B. Efile taxes free 838, available at www. Efile taxes free irs. Efile taxes free gov/irb/2009-16_irb/ar09. Efile taxes free html. Efile taxes free   Administrators of the group health plans (or other entities) that provide or administer COBRA continuation coverage must provide notice to assistance eligible individuals of the COBRA premium assistance. Efile taxes free   The 65% of the premium not paid by the assistance eligible individuals is reimbursed to the employer maintaining the group health plan. Efile taxes free The reimbursement is made through a credit against the employer's employment tax liabilities. Efile taxes free For information on how to claim the credit, see the Instructions for Form 941 or the Instructions for Form 944. Efile taxes free The credit is treated as a deposit made on the first day of the return period (quarter or year). Efile taxes free In the case of a multiemployer plan, the credit is claimed by the plan, rather than the employer. Efile taxes free In the case of an insured plan subject to state law continuation coverage requirements, the credit is claimed by the insurance company, rather than the employer. Efile taxes free   Anyone claiming the credit for COBRA premium assistance payments must maintain the following information to support their claim, including the following. Efile taxes free Information on the receipt of the assistance eligible individuals' 35% share of the premium, including dates and amounts. Efile taxes free In the case of an insurance plan, a copy of invoice or other supporting statement from the insurance carrier and proof of timely payment of the full premium to the insurance carrier required under COBRA. Efile taxes free In the case of a self-insured plan, proof of the premium amount and proof of the coverage provided to the assistance eligible individuals. Efile taxes free Attestation of involuntary termination, including the date of the involuntary termination for each covered employee whose involuntary termination is the basis for eligibility for the subsidy. Efile taxes free Proof of each assistance eligible individual's eligibility for COBRA coverage and the election of COBRA coverage. Efile taxes free A record of the SSNs of all covered employees, the amount of the subsidy reimbursed with respect to each covered employee, and whether the subsidy was for one individual or two or more individuals. Efile taxes free   For more information, visit IRS. Efile taxes free gov and enter “COBRA” in the search box. Efile taxes free Prev  Up  Next   Home   More Online Publications