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Federal Tax Forms 2011 Ez

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Federal Tax Forms 2011 Ez

Federal tax forms 2011 ez Publication 946 - Additional Material Table of Contents Appendix B — Table of Class Lives and Recovery PeriodsHow To Use the Tables This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Appendix A Please click here for the text description of the image. Federal tax forms 2011 ez Table A-1 and A-2 Please click here for the text description of the image. Federal tax forms 2011 ez Table A-3 and A-4 Please click here for the text description of the image. Federal tax forms 2011 ez Table A-5 and A-6 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-7 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-8 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-8 (continued) This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-9 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-9 (continued) This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-10 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A–10 (continued) This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-11 Please click here for the text description of the image. Federal tax forms 2011 ez Table A-11 (continued) This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-12 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-12 (continued) This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-13, A-14 and A-14 (continued. Federal tax forms 2011 ez 1) Please click here for the text description of the image. Federal tax forms 2011 ez Table A-14 (continued. Federal tax forms 2011 ez 2) Please click here for the text description of the image. Federal tax forms 2011 ez Table A-15 Please click here for the text description of the image. Federal tax forms 2011 ez Table A-15 (continued) Please click here for the text description of the image. Federal tax forms 2011 ez Table A-16 Please click here for the text description of the image. Federal tax forms 2011 ez Table A-16 (continued) This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-17 Please click here for the text description of the image. Federal tax forms 2011 ez Table A-17 (continued) Please click here for the text description of the image. Federal tax forms 2011 ez Table A-18 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-18 (continued) This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table A-19 and Table A-20 Please click here for the text description of the image. Federal tax forms 2011 ez Quality Indian Reservation Property Tables Please click here for the text description of the image. Federal tax forms 2011 ez Qualified Indian Reservation Property Tables 2 Appendix B — Table of Class Lives and Recovery Periods The Table of Class Lives and Recovery Periods has two sections. Federal tax forms 2011 ez The first section, Specific Depreciable Assets Used In All Business Activities, Except As Noted, generally lists assets used in all business activities. Federal tax forms 2011 ez It is shown as Table B-1. Federal tax forms 2011 ez The second section, Depreciable Assets Used In The Following Activities, describes assets used only in certain activities. Federal tax forms 2011 ez It is shown as Table B-2. Federal tax forms 2011 ez How To Use the Tables You will need to look at both Table B-1 and B-2 to find the correct recovery period. Federal tax forms 2011 ez Generally, if the property is listed in Table B-1 you use the recovery period shown in that table. Federal tax forms 2011 ez However, if the property is specifically listed in Table B-2 under the type of activity in which it is used, you use the recovery period listed under the activity in that table. Federal tax forms 2011 ez Use the tables in the order shown below to determine the recovery period of your depreciable property. Federal tax forms 2011 ez Table B-1. Federal tax forms 2011 ez   Check Table B-1 for a description of the property. Federal tax forms 2011 ez If it is described in Table B-1, also check Table B-2 to find the activity in which the property is being used. Federal tax forms 2011 ez If the activity is described in Table B-2, read the text (if any) under the title to determine if the property is specifically included in that asset class. Federal tax forms 2011 ez If it is, use the recovery period shown in the appropriate column of Table B-2 following the description of the activity. Federal tax forms 2011 ez If the activity is not described in Table B-2 or if the activity is described but the property either is not specifically included in or is specifically excluded from that asset class, then use the recovery period shown in the appropriate column following the description of the property in Table B-1. Federal tax forms 2011 ez Tax-exempt use property subject to a lease. Federal tax forms 2011 ez   The recovery period for ADS cannot be less than 125 percent of the lease term for any property leased under a leasing arrangement to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership). Federal tax forms 2011 ez Table B-2. Federal tax forms 2011 ez   If the property is not listed in Table B-1, check Table B-2 to find the activity in which the property is being used and use the recovery period shown in the appropriate column following the description. Federal tax forms 2011 ez Property not in either table. Federal tax forms 2011 ez   If the activity or the property is not included in either table, check the end of Table B-2 to find Certain Property for Which Recovery Periods Assigned. Federal tax forms 2011 ez This property generally has a recovery period of 7 years for GDS or 12 years for ADS. Federal tax forms 2011 ez See Which Property Class Applies Under GDS and Which Recovery Period Applies in chapter 4 for the class lives or the recovery periods for GDS and ADS for the following. Federal tax forms 2011 ez Residential rental property and nonresidential real property (also see Appendix A, Chart 2). Federal tax forms 2011 ez Qualified rent-to-own property. Federal tax forms 2011 ez A motorsport entertainment complex placed in service before January 1, 2014. Federal tax forms 2011 ez Any retail motor fuels outlet. Federal tax forms 2011 ez Any qualified leasehold improvement property placed in service before January 1, 2014. Federal tax forms 2011 ez Any qualified restaurant property placed in service before January 1, 2014. Federal tax forms 2011 ez Initial clearing and grading land improvements for gas utility property and electric utility transmission and distribution plants. Federal tax forms 2011 ez Any water utility property. Federal tax forms 2011 ez Certain electric transmission property used in the transmission at 69 or more kilovolts of electricity for sale and placed in service after April 11, 2005. Federal tax forms 2011 ez Natural gas gathering and distribution lines placed in service after April 11, 2005. Federal tax forms 2011 ez Example 1. Federal tax forms 2011 ez Richard Green is a paper manufacturer. Federal tax forms 2011 ez During the year, he made substantial improvements to the land on which his paper plant is located. Federal tax forms 2011 ez He checks Table B-1 and finds land improvements under asset class 00. Federal tax forms 2011 ez 3. Federal tax forms 2011 ez He then checks Table B-2 and finds his activity, paper manufacturing, under asset class 26. Federal tax forms 2011 ez 1, Manufacture of Pulp and Paper. Federal tax forms 2011 ez He uses the recovery period under this asset class because it specifically includes land improvements. Federal tax forms 2011 ez The land improvements have a 13-year class life and a 7-year recovery period for GDS. Federal tax forms 2011 ez If he elects to use ADS, the recovery period is 13 years. Federal tax forms 2011 ez If Richard only looked at Table B-1, he would select asset class 00. Federal tax forms 2011 ez 3, Land Improvements, and incorrectly use a recovery period of 15 years for GDS or 20 years for ADS. Federal tax forms 2011 ez Example 2. Federal tax forms 2011 ez Sam Plower produces rubber products. Federal tax forms 2011 ez During the year, he made substantial improvements to the land on which his rubber plant is located. Federal tax forms 2011 ez He checks Table B-1 and finds land improvements under asset class 00. Federal tax forms 2011 ez 3. Federal tax forms 2011 ez He then checks Table B-2 and finds his activity, producing rubber products, under asset class 30. Federal tax forms 2011 ez 1, Manufacture of Rubber Products. Federal tax forms 2011 ez Reading the headings and descriptions under asset class 30. Federal tax forms 2011 ez 1, Sam finds that it does not include land improvements. Federal tax forms 2011 ez Therefore, Sam uses the recovery period under asset class 00. Federal tax forms 2011 ez 3. Federal tax forms 2011 ez The land improvements have a 20-year class life and a 15-year recovery period for GDS. Federal tax forms 2011 ez If he elects to use ADS, the recovery period is 20 years. Federal tax forms 2011 ez Example 3. Federal tax forms 2011 ez Pam Martin owns a retail clothing store. Federal tax forms 2011 ez During the year, she purchased a desk and a cash register for use in her business. Federal tax forms 2011 ez She checks Table B-1 and finds office furniture under asset class 00. Federal tax forms 2011 ez 11. Federal tax forms 2011 ez Cash registers are not listed in any of the asset classes in Table B-1. Federal tax forms 2011 ez She then checks Table B-2 and finds her activity, retail store, under asset class 57. Federal tax forms 2011 ez 0, Distributive Trades and Services, which includes assets used in wholesale and retail trade. Federal tax forms 2011 ez This asset class does not specifically list office furniture or a cash register. Federal tax forms 2011 ez She looks back at Table B-1 and uses asset class 00. Federal tax forms 2011 ez 11 for the desk. Federal tax forms 2011 ez The desk has a 10-year class life and a 7-year recovery period for GDS. Federal tax forms 2011 ez If she elects to use ADS, the recovery period is 10 years. Federal tax forms 2011 ez For the cash register, she uses asset class 57. Federal tax forms 2011 ez 0 because cash registers are not listed in Table B-1 but it is an asset used in her retail business. Federal tax forms 2011 ez The cash register has a 9-year class life and a 5-year recovery period for GDS. Federal tax forms 2011 ez If she elects to use the ADS method, the recovery period is 9 years. Federal tax forms 2011 ez This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table B-1 Please click here for the text description of the image. Federal tax forms 2011 ez Table B-2 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table B-2 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table B-2 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table B-2 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table B-2 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table B-2 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table B-2 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table B-2 This image is too large to be displayed in the current screen. Federal tax forms 2011 ez Please click the link to view the image. Federal tax forms 2011 ez Table B-2 Tax Publications for Business Taxpayers Prev  Up  Next   Home   More Online Publications
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SOI Tax Stats - Corporate Foreign Tax Credit Statistics

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Corporate Foreign Tax Credit, Tax Year 2010 One Sheet
 

What is the Corporate Foreign Tax Credit?

The corporate foreign tax credit is a set of provisions designed by Congress to eliminate potential double taxation on the foreign-source income of U.S. corporations. Double taxation occurs when an item of income is taxed by both the United States, as the corporation's country of residence, as well as by the country where the income was generated. The current provisions allow U.S. businesses to credit their foreign taxes paid, accrued, or deemed paid against their U.S. income tax liability, subject to limitations that prevent taxpayers from using taxes paid in a country with a higher tax rate than the U.S. to offset their tax liability on U.S. income. Corporations are required to calculate this credit separately for different income categories to prevent taxpayers from combining income that is traditionally taxed at low rates, such as dividend or interest income, with income that is typically taxed at higher rates, such as active business income. The corporate foreign tax credit is reported on Form 1118, Foreign Tax Credit - Corporations.

For information about selected terms and concepts and a description of the data sources and limitations, please visit Corporate Foreign Tax Credit Study Metadata.

Statistical Tables      SOI Bulletin Articles      Archive
 


Statistical Tables

The following tables are available as Microsoft Excel®  files.  A free Excel viewer is available for download, if needed.

U.S. Corporation Income Tax Returns with a Foreign Tax Credit: Total Assets, Income, Taxes, and Credits, and Foreign Income, Deductions, and Taxes 
Shown by major and selected minor industry.

U.S. Corporation Income Tax Returns with a Foreign Tax Credit: Returns with Income in Excess Credit Position: Foreign Income, Deductions, and Taxes 
Shown by major and selected minor industry.

U.S. Corporation Income Tax Returns with a Foreign Tax Credit: Returns with Income in Excess Limitation Position: Foreign Income, Deductions, and Taxes 
Shown by major and selected minor industry.

U.S. Corporation Income Tax Returns with a Foreign Tax Credit: Foreign Income, Deductions, and Taxes
Shown by industrial sector and by type of foreign income for which separate credit was computed. (Tax Year 2006 is the last year published for this table.)

U.S. Corporation Income Tax Returns with a Foreign Tax Credit: Foreign Income, Deductions, and Taxes Reported on Form 1118
Shown by selected country to which foreign taxes were paid.
 


SOI Bulletin Articles

The following are available as PDF files. A free Adobe® Reader is available for download, if needed.


Archives

Foreign Tax Credit, Claimed on Corporation Income Tax Returns

 


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Page Last Reviewed or Updated: 24-Feb-2014

The Federal Tax Forms 2011 Ez

Federal tax forms 2011 ez 5. Federal tax forms 2011 ez   Wages, Salaries, and Other Earnings Table of Contents Reminder Introduction Useful Items - You may want to see: Employee CompensationBabysitting. Federal tax forms 2011 ez Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Reminder Foreign income. Federal tax forms 2011 ez   If you are a U. Federal tax forms 2011 ez S. Federal tax forms 2011 ez citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U. Federal tax forms 2011 ez S. Federal tax forms 2011 ez law. Federal tax forms 2011 ez This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2, Wage and Tax Statement, or Form 1099 from the foreign payer. Federal tax forms 2011 ez This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). Federal tax forms 2011 ez If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. Federal tax forms 2011 ez For details, see Publication 54, Tax Guide for U. Federal tax forms 2011 ez S. Federal tax forms 2011 ez Citizens and Resident Aliens Abroad. Federal tax forms 2011 ez Introduction This chapter discusses compensation received for services as an employee, such as wages, salaries, and fringe benefits. Federal tax forms 2011 ez The following topics are included. Federal tax forms 2011 ez Bonuses and awards. Federal tax forms 2011 ez Special rules for certain employees. Federal tax forms 2011 ez Sickness and injury benefits. Federal tax forms 2011 ez The chapter explains what income is included in the employee's gross income and what is not included. Federal tax forms 2011 ez Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income Employee Compensation This section discusses various types of employee compensation including fringe benefits, retirement plan contributions, stock options, and restricted property. Federal tax forms 2011 ez Form W-2. Federal tax forms 2011 ez    If you are an employee, you should receive Form W-2 from your employer showing the pay you received for your services. Federal tax forms 2011 ez Include your pay on line 7 of Form 1040 or Form 1040A, or on line 1 of Form 1040EZ, even if you do not receive a Form W-2. Federal tax forms 2011 ez   If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. Federal tax forms 2011 ez These wages must be included on line 7 of Form 1040. Federal tax forms 2011 ez See Form 8919 for more information. Federal tax forms 2011 ez Childcare providers. Federal tax forms 2011 ez    If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. Federal tax forms 2011 ez If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Federal tax forms 2011 ez You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. Federal tax forms 2011 ez Babysitting. Federal tax forms 2011 ez   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. Federal tax forms 2011 ez Miscellaneous Compensation This section discusses different types of employee compensation. Federal tax forms 2011 ez Advance commissions and other earnings. Federal tax forms 2011 ez   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. Federal tax forms 2011 ez    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. Federal tax forms 2011 ez If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), or you may be able to take a credit for that year. Federal tax forms 2011 ez See Repayments in chapter 12. Federal tax forms 2011 ez Allowances and reimbursements. Federal tax forms 2011 ez    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463. Federal tax forms 2011 ez If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. Federal tax forms 2011 ez Back pay awards. Federal tax forms 2011 ez    Include in income amounts you are awarded in a settlement or judgment for back pay. Federal tax forms 2011 ez These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. Federal tax forms 2011 ez They should be reported to you by your employer on Form W-2. Federal tax forms 2011 ez Bonuses and awards. Federal tax forms 2011 ez   Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. Federal tax forms 2011 ez These include prizes such as vacation trips for meeting sales goals. Federal tax forms 2011 ez If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. Federal tax forms 2011 ez However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. Federal tax forms 2011 ez Employee achievement award. Federal tax forms 2011 ez   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. Federal tax forms 2011 ez However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. Federal tax forms 2011 ez Your employer can tell you whether your award is a qualified plan award. Federal tax forms 2011 ez Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. Federal tax forms 2011 ez   However, the exclusion does not apply to the following awards: A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. Federal tax forms 2011 ez A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. Federal tax forms 2011 ez Example. Federal tax forms 2011 ez Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. Federal tax forms 2011 ez Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. Federal tax forms 2011 ez However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 – $1,600) in his income. Federal tax forms 2011 ez Differential wage payments. Federal tax forms 2011 ez   This is any payment made to you by an employer for any period during which you are, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages you would have received from the employer during that period. Federal tax forms 2011 ez These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. Federal tax forms 2011 ez The payments are reported as wages on Form W-2. Federal tax forms 2011 ez Government cost-of-living allowances. Federal tax forms 2011 ez   Most payments received by U. Federal tax forms 2011 ez S. Federal tax forms 2011 ez Government civilian employees for working abroad are taxable. Federal tax forms 2011 ez However, certain cost-of-living allowances are tax free. Federal tax forms 2011 ez Publication 516, U. Federal tax forms 2011 ez S. Federal tax forms 2011 ez Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. Federal tax forms 2011 ez Nonqualified deferred compensation plans. Federal tax forms 2011 ez   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. Federal tax forms 2011 ez This amount is shown on Form W-2, box 12, using code Y. Federal tax forms 2011 ez This amount is not included in your income. Federal tax forms 2011 ez   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. Federal tax forms 2011 ez This amount is included in your wages shown on Form W-2, box 1. Federal tax forms 2011 ez It is also shown on Form W-2, box 12, using code Z. Federal tax forms 2011 ez Note received for services. Federal tax forms 2011 ez    If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. Federal tax forms 2011 ez When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. Federal tax forms 2011 ez Do not include that part again in your income. Federal tax forms 2011 ez Include the rest of the payment in your income in the year of payment. Federal tax forms 2011 ez   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. Federal tax forms 2011 ez Severance pay. Federal tax forms 2011 ez   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. Federal tax forms 2011 ez Accrued leave payment. Federal tax forms 2011 ez    If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. Federal tax forms 2011 ez   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. Federal tax forms 2011 ez You can reduce gross wages by the amount you repaid in the same tax year in which you received it. Federal tax forms 2011 ez Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on the return and the wages on your Forms W-2. Federal tax forms 2011 ez Outplacement services. Federal tax forms 2011 ez   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. Federal tax forms 2011 ez    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). Federal tax forms 2011 ez Sick pay. Federal tax forms 2011 ez   Pay you receive from your employer while you are sick or injured is part of your salary or wages. Federal tax forms 2011 ez In addition, you must include in your income sick pay benefits received from any of the following payers: A welfare fund. Federal tax forms 2011 ez A state sickness or disability fund. Federal tax forms 2011 ez An association of employers or employees. Federal tax forms 2011 ez An insurance company, if your employer paid for the plan. Federal tax forms 2011 ez However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. Federal tax forms 2011 ez For more information, see Publication 525. Federal tax forms 2011 ez Social security and Medicare taxes paid by employer. Federal tax forms 2011 ez   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. Federal tax forms 2011 ez The payment also is treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. Federal tax forms 2011 ez However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. Federal tax forms 2011 ez Stock appreciation rights. Federal tax forms 2011 ez   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. Federal tax forms 2011 ez When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. Federal tax forms 2011 ez You include the cash payment in your income in the year you use the right. Federal tax forms 2011 ez Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. Federal tax forms 2011 ez Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. Federal tax forms 2011 ez Accounting period. Federal tax forms 2011 ez   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. Federal tax forms 2011 ez Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. Federal tax forms 2011 ez The general rule: benefits are reported for a full calendar year (January 1–December 31). Federal tax forms 2011 ez The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. Federal tax forms 2011 ez For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. Federal tax forms 2011 ez  Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. Federal tax forms 2011 ez   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). Federal tax forms 2011 ez Form W-2. Federal tax forms 2011 ez   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips, and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. Federal tax forms 2011 ez Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). Federal tax forms 2011 ez However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). Federal tax forms 2011 ez Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. Federal tax forms 2011 ez Benefits you receive from the plan may be taxable, as explained later under Sickness and Injury Benefits . Federal tax forms 2011 ez For information on the items covered in this section, other than Long-term care coverage, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. Federal tax forms 2011 ez Long-term care coverage. Federal tax forms 2011 ez    Contributions by your employer to provide coverage for long-term care services generally are not included in your income. Federal tax forms 2011 ez However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. Federal tax forms 2011 ez This amount will be reported as wages in box 1 of your Form W-2. Federal tax forms 2011 ez   Contributions you make to the plan are discussed in Publication 502, Medical and Dental Expenses. Federal tax forms 2011 ez Archer MSA contributions. Federal tax forms 2011 ez    Contributions by your employer to your Archer MSA generally are not included in your income. Federal tax forms 2011 ez Their total will be reported in box 12 of Form W-2 with code R. Federal tax forms 2011 ez You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. Federal tax forms 2011 ez File the form with your return. Federal tax forms 2011 ez Health flexible spending arrangement (health FSA). Federal tax forms 2011 ez   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. Federal tax forms 2011 ez Note. Federal tax forms 2011 ez Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. Federal tax forms 2011 ez The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. Federal tax forms 2011 ez For more information, see Notice 2012-40, 2012-26 I. Federal tax forms 2011 ez R. Federal tax forms 2011 ez B. Federal tax forms 2011 ez 1046, available at www. Federal tax forms 2011 ez irs. Federal tax forms 2011 ez gov/irb/2012-26 IRB/ar09. Federal tax forms 2011 ez html. Federal tax forms 2011 ez Health reimbursement arrangement (HRA). Federal tax forms 2011 ez   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. Federal tax forms 2011 ez Health savings accounts (HSA). Federal tax forms 2011 ez   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. Federal tax forms 2011 ez Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. Federal tax forms 2011 ez Contributions made by your employer are not included in your income. Federal tax forms 2011 ez Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. Federal tax forms 2011 ez Distributions not used for qualified medical expenses are included in your income. Federal tax forms 2011 ez See Publication 969 for the requirements of an HSA. Federal tax forms 2011 ez   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. Federal tax forms 2011 ez The contributions are treated as a distribution of money and are not included in the partner's gross income. Federal tax forms 2011 ez Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. Federal tax forms 2011 ez In both situations, the partner can deduct the contribution made to the partner's HSA. Federal tax forms 2011 ez   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. Federal tax forms 2011 ez The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. Federal tax forms 2011 ez Qualified HSA funding distribution. Federal tax forms 2011 ez   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. Federal tax forms 2011 ez See Publication 590 for the requirements for these qualified HSA funding distributions. Federal tax forms 2011 ez Failure to maintain eligibility. Federal tax forms 2011 ez   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. Federal tax forms 2011 ez If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. Federal tax forms 2011 ez This income is also subject to an additional 10% tax. Federal tax forms 2011 ez Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. Federal tax forms 2011 ez See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. Federal tax forms 2011 ez Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. Federal tax forms 2011 ez They also are included as social security and Medicare wages in boxes 3 and 5. Federal tax forms 2011 ez However, they are not included as wages in box 1. Federal tax forms 2011 ez To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. Federal tax forms 2011 ez File the form with your return. Federal tax forms 2011 ez De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. Federal tax forms 2011 ez In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. Federal tax forms 2011 ez Holiday gifts. Federal tax forms 2011 ez   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. Federal tax forms 2011 ez However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. Federal tax forms 2011 ez Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. Federal tax forms 2011 ez For more information, see Publication 970, Tax Benefits for Education. Federal tax forms 2011 ez Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. Federal tax forms 2011 ez However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. Federal tax forms 2011 ez For exceptions, see Entire cost excluded , and Entire cost taxed , later. Federal tax forms 2011 ez If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. Federal tax forms 2011 ez Also, it is shown separately in box 12 with code C. Federal tax forms 2011 ez Group-term life insurance. Federal tax forms 2011 ez   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. Federal tax forms 2011 ez Permanent benefits. Federal tax forms 2011 ez   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. Federal tax forms 2011 ez Your employer should be able to tell you the amount to include in your income. Federal tax forms 2011 ez Accidental death benefits. Federal tax forms 2011 ez   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. Federal tax forms 2011 ez Former employer. Federal tax forms 2011 ez   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. Federal tax forms 2011 ez Also, it is shown separately in box 12 with code C. Federal tax forms 2011 ez Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. Federal tax forms 2011 ez You must pay these taxes with your income tax return. Federal tax forms 2011 ez Include them on line 60, Form 1040, and follow the instructions for line 60. Federal tax forms 2011 ez For more information, see the Instructions for Form 1040. Federal tax forms 2011 ez Two or more employers. Federal tax forms 2011 ez   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. Federal tax forms 2011 ez If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. Federal tax forms 2011 ez You must figure how much to include in your income. Federal tax forms 2011 ez Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. Federal tax forms 2011 ez Figuring the taxable cost. Federal tax forms 2011 ez   Use the following worksheet to figure the amount to include in your income. Federal tax forms 2011 ez     Worksheet 5-1. Federal tax forms 2011 ez Figuring the Cost of Group-Term Life Insurance To Include in Income 1. Federal tax forms 2011 ez Enter the total amount of your insurance coverage from your employer(s) 1. Federal tax forms 2011 ez   2. Federal tax forms 2011 ez Limit on exclusion for employer-provided group-term life insurance coverage 2. Federal tax forms 2011 ez 50,000 3. Federal tax forms 2011 ez Subtract line 2 from line 1 3. Federal tax forms 2011 ez   4. Federal tax forms 2011 ez Divide line 3 by $1,000. Federal tax forms 2011 ez Figure to the nearest tenth 4. Federal tax forms 2011 ez   5. Federal tax forms 2011 ez Go to Table 5-1. Federal tax forms 2011 ez Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. Federal tax forms 2011 ez   6. Federal tax forms 2011 ez Multiply line 4 by line 5 6. Federal tax forms 2011 ez   7. Federal tax forms 2011 ez Enter the number of full months of coverage at this cost. Federal tax forms 2011 ez 7. Federal tax forms 2011 ez   8. Federal tax forms 2011 ez Multiply line 6 by line 7 8. Federal tax forms 2011 ez   9. Federal tax forms 2011 ez Enter the premiums you paid per month 9. Federal tax forms 2011 ez       10. Federal tax forms 2011 ez Enter the number of months you paid the premiums 10. Federal tax forms 2011 ez       11. Federal tax forms 2011 ez Multiply line 9 by line 10. Federal tax forms 2011 ez 11. Federal tax forms 2011 ez   12. Federal tax forms 2011 ez Subtract line 11 from line 8. Federal tax forms 2011 ez Include this amount in your income as wages 12. Federal tax forms 2011 ez      Table 5-1. Federal tax forms 2011 ez Cost of $1,000 of Group-Term Life Insurance for One Month Age Cost Under 25 $. Federal tax forms 2011 ez 05 25 through 29 . Federal tax forms 2011 ez 06 30 through 34 . Federal tax forms 2011 ez 08 35 through 39 . Federal tax forms 2011 ez 09 40 through 44 . Federal tax forms 2011 ez 10 45 through 49 . Federal tax forms 2011 ez 15 50 through 54 . Federal tax forms 2011 ez 23 55 through 59 . Federal tax forms 2011 ez 43 60 through 64 . Federal tax forms 2011 ez 66 65 through 69 1. Federal tax forms 2011 ez 27 70 and older 2. Federal tax forms 2011 ez 06 Example. Federal tax forms 2011 ez You are 51 years old and work for employers A and B. Federal tax forms 2011 ez Both employers provide group-term life insurance coverage for you for the entire year. Federal tax forms 2011 ez Your coverage is $35,000 with employer A and $45,000 with employer B. Federal tax forms 2011 ez You pay premiums of $4. Federal tax forms 2011 ez 15 a month under the employer B group plan. Federal tax forms 2011 ez You figure the amount to include in your income as shown in Worksheet 5-1. Federal tax forms 2011 ez Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated, later. Federal tax forms 2011 ez Worksheet 5-1. Federal tax forms 2011 ez Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated 1. Federal tax forms 2011 ez Enter the total amount of your insurance coverage from your employer(s) 1. Federal tax forms 2011 ez 80,000 2. Federal tax forms 2011 ez Limit on exclusion for employer-provided group-term life insurance coverage 2. Federal tax forms 2011 ez 50,000 3. Federal tax forms 2011 ez Subtract line 2 from line 1 3. Federal tax forms 2011 ez 30,000 4. Federal tax forms 2011 ez Divide line 3 by $1,000. Federal tax forms 2011 ez Figure to the nearest tenth 4. Federal tax forms 2011 ez 30. Federal tax forms 2011 ez 0 5. Federal tax forms 2011 ez Go to Table 5-1. Federal tax forms 2011 ez Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. Federal tax forms 2011 ez . Federal tax forms 2011 ez 23 6. Federal tax forms 2011 ez Multiply line 4 by line 5 6. Federal tax forms 2011 ez 6. Federal tax forms 2011 ez 90 7. Federal tax forms 2011 ez Enter the number of full months of coverage at this cost. Federal tax forms 2011 ez 7. Federal tax forms 2011 ez 12 8. Federal tax forms 2011 ez Multiply line 6 by line 7 8. Federal tax forms 2011 ez 82. Federal tax forms 2011 ez 80 9. Federal tax forms 2011 ez Enter the premiums you paid per month 9. Federal tax forms 2011 ez 4. Federal tax forms 2011 ez 15     10. Federal tax forms 2011 ez Enter the number of months you paid the premiums 10. Federal tax forms 2011 ez 12     11. Federal tax forms 2011 ez Multiply line 9 by line 10. Federal tax forms 2011 ez 11. Federal tax forms 2011 ez 49. Federal tax forms 2011 ez 80 12. Federal tax forms 2011 ez Subtract line 11 from line 8. Federal tax forms 2011 ez Include this amount in your income as wages 12. Federal tax forms 2011 ez 33. Federal tax forms 2011 ez 00 Entire cost excluded. Federal tax forms 2011 ez   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. Federal tax forms 2011 ez You are permanently and totally disabled and have ended your employment. Federal tax forms 2011 ez Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. Federal tax forms 2011 ez A charitable organization (defined in chapter 24) to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. Federal tax forms 2011 ez (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. Federal tax forms 2011 ez ) The plan existed on January 1, 1984, and You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. Federal tax forms 2011 ez Entire cost taxed. Federal tax forms 2011 ez   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply: The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. Federal tax forms 2011 ez You are a key employee and your employer's plan discriminates in favor of key employees. Federal tax forms 2011 ez Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. Federal tax forms 2011 ez Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. Federal tax forms 2011 ez You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. Federal tax forms 2011 ez Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. Federal tax forms 2011 ez A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. Federal tax forms 2011 ez Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. Federal tax forms 2011 ez However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. Federal tax forms 2011 ez Exclusion limit. Federal tax forms 2011 ez   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. Federal tax forms 2011 ez   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. Federal tax forms 2011 ez   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. Federal tax forms 2011 ez   If the benefits have a value that is more than these limits, the excess must be included in your income. Federal tax forms 2011 ez You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. Federal tax forms 2011 ez Commuter highway vehicle. Federal tax forms 2011 ez   This is a highway vehicle that seats at least six adults (not including the driver). Federal tax forms 2011 ez At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). Federal tax forms 2011 ez Transit pass. Federal tax forms 2011 ez   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. Federal tax forms 2011 ez Qualified parking. Federal tax forms 2011 ez   This is parking provided to an employee at or near the employer's place of business. Federal tax forms 2011 ez It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. Federal tax forms 2011 ez It does not include parking at or near the employee's home. Federal tax forms 2011 ez Qualified bicycle commuting. Federal tax forms 2011 ez   This is reimbursement based on the number of qualified bicycle commuting months for the year. Federal tax forms 2011 ez A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. Federal tax forms 2011 ez The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. Federal tax forms 2011 ez Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. Federal tax forms 2011 ez (Your employer can tell you whether your retirement plan is qualified. Federal tax forms 2011 ez ) However, the cost of life insurance coverage included in the plan may have to be included. Federal tax forms 2011 ez See Group-Term Life Insurance , earlier, under Fringe Benefits. Federal tax forms 2011 ez If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. Federal tax forms 2011 ez However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. Federal tax forms 2011 ez For information on distributions from retirement plans, see Publication 575, Pension and Annuity Income (or Publication 721, Tax Guide to U. Federal tax forms 2011 ez S. Federal tax forms 2011 ez Civil Service Retirement Benefits, if you are a federal employee or retiree). Federal tax forms 2011 ez Elective deferrals. Federal tax forms 2011 ez   If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. Federal tax forms 2011 ez The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. Federal tax forms 2011 ez An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. Federal tax forms 2011 ez However, it is included in wages subject to social security and Medicare taxes. Federal tax forms 2011 ez   Elective deferrals include elective contributions to the following retirement plans. Federal tax forms 2011 ez Cash or deferred arrangements (section 401(k) plans). Federal tax forms 2011 ez The Thrift Savings Plan for federal employees. Federal tax forms 2011 ez Salary reduction simplified employee pension plans (SARSEP). Federal tax forms 2011 ez Savings incentive match plans for employees (SIMPLE plans). Federal tax forms 2011 ez Tax-sheltered annuity plans (403(b) plans). Federal tax forms 2011 ez Section 501(c)(18)(D) plans. Federal tax forms 2011 ez Section 457 plans. Federal tax forms 2011 ez Qualified automatic contribution arrangements. Federal tax forms 2011 ez   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. Federal tax forms 2011 ez You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. Federal tax forms 2011 ez The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. Federal tax forms 2011 ez   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. Federal tax forms 2011 ez Overall limit on deferrals. Federal tax forms 2011 ez   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3) and (5) above. Federal tax forms 2011 ez The limit for SIMPLE plans is $12,000. Federal tax forms 2011 ez The limit for section 501(c)(18)(D) plans is the lesser of $7,000 or 25% of your compensation. Federal tax forms 2011 ez The limit for section 457 plans is the lesser of your includible compensation or $17,500. Federal tax forms 2011 ez Amounts deferred under specific plan limits are part of the overall limit on deferrals. Federal tax forms 2011 ez Designated Roth contributions. Federal tax forms 2011 ez   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. Federal tax forms 2011 ez Designated Roth contributions are treated as elective deferrals, except that they are included in income. Federal tax forms 2011 ez Excess deferrals. Federal tax forms 2011 ez   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. Federal tax forms 2011 ez However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. Federal tax forms 2011 ez   If you set aside more than the limit, the excess generally must be included in your income for that year, unless you have an excess deferral of a designated Roth contribution. Federal tax forms 2011 ez See Publication 525 for a discussion of the tax treatment of excess deferrals. Federal tax forms 2011 ez Catch-up contributions. Federal tax forms 2011 ez   You may be allowed catch-up contributions (additional elective deferral) if you are age 50 or older by the end of your tax year. Federal tax forms 2011 ez Stock Options If you receive a nonstatutory option to buy or sell stock or other property as payment for your services, you usually will have income when you receive the option, when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option. Federal tax forms 2011 ez However, if your option is a statutory stock option, you will not have any income until you sell or exchange your stock. Federal tax forms 2011 ez Your employer can tell you which kind of option you hold. Federal tax forms 2011 ez For more information, see Publication 525. Federal tax forms 2011 ez Restricted Property In most cases, if you receive property for your services, you must include its fair market value in your income in the year you receive the property. Federal tax forms 2011 ez However, if you receive stock or other property that has certain restrictions that affect its value, you do not include the value of the property in your income until it has substantially vested. Federal tax forms 2011 ez (You can choose to include the value of the property in your income in the year it is transferred to you. Federal tax forms 2011 ez ) For more information, see Restricted Property in Publication 525. Federal tax forms 2011 ez Dividends received on restricted stock. Federal tax forms 2011 ez   Dividends you receive on restricted stock are treated as compensation and not as dividend income. Federal tax forms 2011 ez Your employer should include these payments on your Form W-2. Federal tax forms 2011 ez Stock you chose to include in income. Federal tax forms 2011 ez   Dividends you receive on restricted stock you chose to include in your income in the year transferred are treated the same as any other dividends. Federal tax forms 2011 ez Report them on your return as dividends. Federal tax forms 2011 ez For a discussion of dividends, see chapter 8. Federal tax forms 2011 ez    For information on how to treat dividends reported on both your Form W-2 and Form 1099-DIV, see Dividends received on restricted stock in Publication 525. Federal tax forms 2011 ez Special Rules for Certain Employees This section deals with special rules for people in certain types of employment: members of the clergy, members of religious orders, people working for foreign employers, military personnel, and volunteers. Federal tax forms 2011 ez Clergy Generally, if you are a member of the clergy, you must include in your income offerings and fees you receive for marriages, baptisms, funerals, masses, etc. Federal tax forms 2011 ez , in addition to your salary. Federal tax forms 2011 ez If the offering is made to the religious institution, it is not taxable to you. Federal tax forms 2011 ez If you are a member of a religious organization and you give your outside earnings to the religious organization, you still must include the earnings in your income. Federal tax forms 2011 ez However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. Federal tax forms 2011 ez See chapter 24. Federal tax forms 2011 ez Pension. Federal tax forms 2011 ez    A pension or retirement pay for a member of the clergy usually is treated as any other pension or annuity. Federal tax forms 2011 ez It must be reported on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Federal tax forms 2011 ez Housing. Federal tax forms 2011 ez    Special rules for housing apply to members of the clergy. Federal tax forms 2011 ez Under these rules, you do not include in your income the rental value of a home (including utilities) or a designated housing allowance provided to you as part of your pay. Federal tax forms 2011 ez However, the exclusion cannot be more than the reasonable pay for your service. Federal tax forms 2011 ez If you pay for the utilities, you can exclude any allowance designated for utility cost, up to your actual cost. Federal tax forms 2011 ez The home or allowance must be provided as compensation for your services as an ordained, licensed, or commissioned minister. Federal tax forms 2011 ez However, you must include the rental value of the home or the housing allowance as earnings from self-employment on Schedule SE (Form 1040) if you are subject to the self-employment tax. Federal tax forms 2011 ez For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Federal tax forms 2011 ez Members of Religious Orders If you are a member of a religious order who has taken a vow of poverty, how you treat earnings that you renounce and turn over to the order depends on whether your services are performed for the order. Federal tax forms 2011 ez Services performed for the order. Federal tax forms 2011 ez   If you are performing the services as an agent of the order in the exercise of duties required by the order, do not include in your income the amounts turned over to the order. Federal tax forms 2011 ez   If your order directs you to perform services for another agency of the supervising church or an associated institution, you are considered to be performing the services as an agent of the order. Federal tax forms 2011 ez Any wages you earn as an agent of an order that you turn over to the order are not included in your income. Federal tax forms 2011 ez Example. Federal tax forms 2011 ez You are a member of a church order and have taken a vow of poverty. Federal tax forms 2011 ez You renounce any claims to your earnings and turn over to the order any salaries or wages you earn. Federal tax forms 2011 ez You are a registered nurse, so your order assigns you to work in a hospital that is an associated institution of the church. Federal tax forms 2011 ez However, you remain under the general direction and control of the order. Federal tax forms 2011 ez You are considered to be an agent of the order and any wages you earn at the hospital that you turn over to your order are not included in your income. Federal tax forms 2011 ez Services performed outside the order. Federal tax forms 2011 ez   If you are directed to work outside the order, your services are not an exercise of duties required by the order unless they meet both of the following requirements: They are the kind of services that are ordinarily the duties of members of the order. Federal tax forms 2011 ez They are part of the duties that you must exercise for, or on behalf of, the religious order as its agent. Federal tax forms 2011 ez If you are an employee of a third party, the services you perform for the third party will not be considered directed or required of you by the order. Federal tax forms 2011 ez Amounts you receive for these services are included in your income, even if you have taken a vow of poverty. Federal tax forms 2011 ez Example. Federal tax forms 2011 ez Mark Brown is a member of a religious order and has taken a vow of poverty. Federal tax forms 2011 ez He renounces all claims to his earnings and turns over his earnings to the order. Federal tax forms 2011 ez Mark is a schoolteacher. Federal tax forms 2011 ez He was instructed by the superiors of the order to get a job with a private tax-exempt school. Federal tax forms 2011 ez Mark became an employee of the school, and, at his request, the school made the salary payments directly to the order. Federal tax forms 2011 ez Because Mark is an employee of the school, he is performing services for the school rather than as an agent of the order. Federal tax forms 2011 ez The wages Mark earns working for the school are included in his income. Federal tax forms 2011 ez Foreign Employer Special rules apply if you work for a foreign employer. Federal tax forms 2011 ez U. Federal tax forms 2011 ez S. Federal tax forms 2011 ez citizen. Federal tax forms 2011 ez   If you are a U. Federal tax forms 2011 ez S. Federal tax forms 2011 ez citizen who works in the United States for a foreign government, an international organization, a foreign embassy, or any foreign employer, you must include your salary in your income. Federal tax forms 2011 ez Social security and Medicare taxes. Federal tax forms 2011 ez   You are exempt from social security and Medicare employee taxes if you are employed in the United States by an international organization or a foreign government. Federal tax forms 2011 ez However, you must pay self-employment tax on your earnings from services performed in the United States, even though you are not self-employed. Federal tax forms 2011 ez This rule also applies if you are an employee of a qualifying wholly owned instrumentality of a foreign government. Federal tax forms 2011 ez Employees of international organizations or foreign governments. Federal tax forms 2011 ez   Your compensation for official services to an international organization is exempt from federal income tax if you are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). Federal tax forms 2011 ez   Your compensation for official services to a foreign government is exempt from federal income tax if all of the following are true. Federal tax forms 2011 ez You are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). Federal tax forms 2011 ez Your work is like the work done by employees of the United States in foreign countries. Federal tax forms 2011 ez The foreign government gives an equal exemption to employees of the United States in its country. Federal tax forms 2011 ez Waiver of alien status. Federal tax forms 2011 ez   If you are an alien who works for a foreign government or international organization and you file a waiver under section 247(b) of the Immigration and Nationality Act to keep your immigrant status, different rules may apply. Federal tax forms 2011 ez See Foreign Employer in Publication 525. Federal tax forms 2011 ez Employment abroad. Federal tax forms 2011 ez   For information on the tax treatment of income earned abroad, see Publication 54. Federal tax forms 2011 ez Military Payments you receive as a member of a military service generally are taxed as wages except for retirement pay, which is taxed as a pension. Federal tax forms 2011 ez Allowances generally are not taxed. Federal tax forms 2011 ez For more information on the tax treatment of military allowances and benefits, see Publication 3, Armed Forces' Tax Guide. Federal tax forms 2011 ez Differential wage payments. Federal tax forms 2011 ez   Any payments made to you by an employer during the time you are performing service in the uniformed services are treated as compensation. Federal tax forms 2011 ez These wages are subject to income tax withholding and are reported on a Form W-2. Federal tax forms 2011 ez See the discussion under Miscellaneous Compensation , earlier. Federal tax forms 2011 ez Military retirement pay. Federal tax forms 2011 ez   If your retirement pay is based on age or length of service, it is taxable and must be included in your income as a pension on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Federal tax forms 2011 ez Do not include in your income the amount of any reduction in retirement or retainer pay to provide a survivor annuity for your spouse or children under the Retired Serviceman's Family Protection Plan or the Survivor Benefit Plan. Federal tax forms 2011 ez   For more detailed discussion of survivor annuities, see chapter 10. Federal tax forms 2011 ez Disability. Federal tax forms 2011 ez   If you are retired on disability, see Military and Government Disability Pensions under Sickness and Injury Benefits, later. Federal tax forms 2011 ez Veterans' benefits. Federal tax forms 2011 ez   Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA). Federal tax forms 2011 ez The following amounts paid to veterans or their families are not taxable. Federal tax forms 2011 ez Education, training, and subsistence allowances. Federal tax forms 2011 ez Disability compensation and pension payments for disabilities paid either to veterans or their families. Federal tax forms 2011 ez Grants for homes designed for wheelchair living. Federal tax forms 2011 ez Grants for motor vehicles for veterans who lost their sight or the use of their limbs. Federal tax forms 2011 ez Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death. Federal tax forms 2011 ez Interest on insurance dividends you leave on deposit with the VA. Federal tax forms 2011 ez Benefits under a dependent-care assistance program. Federal tax forms 2011 ez The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001. Federal tax forms 2011 ez Payments made under the compensated work therapy program. Federal tax forms 2011 ez Any bonus payment by a state or political subdivision because of service in a combat zone. Federal tax forms 2011 ez Volunteers The tax treatment of amounts you receive as a volunteer worker for the Peace Corps or similar agency is covered in the following discussions. Federal tax forms 2011 ez Peace Corps. Federal tax forms 2011 ez   Living allowances you receive as a Peace Corps volunteer or volunteer leader for housing, utilities, household supplies, food, and clothing are exempt from tax. Federal tax forms 2011 ez Taxable allowances. Federal tax forms 2011 ez   The following allowances must be included in your income and reported as wages: Allowances paid to your spouse and minor children while you are a volunteer leader training in the United States. Federal tax forms 2011 ez Living allowances designated by the Director of the Peace Corps as basic compensation. Federal tax forms 2011 ez These are allowances for personal items such as domestic help, laundry and clothing maintenance, entertainment and recreation, transportation, and other miscellaneous expenses. Federal tax forms 2011 ez Leave allowances. Federal tax forms 2011 ez Readjustment allowances or termination payments. Federal tax forms 2011 ez These are considered received by you when credited to your account. Federal tax forms 2011 ez Example. Federal tax forms 2011 ez Gary Carpenter, a Peace Corps volunteer, gets $175 a month as a readjustment allowance during his period of service, to be paid to him in a lump sum at the end of his tour of duty. Federal tax forms 2011 ez Although the allowance is not available to him until the end of his service, Gary must include it in his income on a monthly basis as it is credited to his account. Federal tax forms 2011 ez Volunteers in Service to America (VISTA). Federal tax forms 2011 ez   If you are a VISTA volunteer, you must include meal and lodging allowances paid to you in your income as wages. Federal tax forms 2011 ez National Senior Services Corps programs. Federal tax forms 2011 ez   Do not include in your income amounts you receive for supportive services or reimbursements for out-of-pocket expenses from the following programs. Federal tax forms 2011 ez Retired Senior Volunteer Program (RSVP). Federal tax forms 2011 ez Foster Grandparent Program. Federal tax forms 2011 ez Senior Companion Program. Federal tax forms 2011 ez Service Corps of Retired Executives (SCORE). Federal tax forms 2011 ez   If you receive amounts for supportive services or reimbursements for out-of-pocket expenses from SCORE, do not include these amounts in income. Federal tax forms 2011 ez Volunteer tax counseling. Federal tax forms 2011 ez   Do not include in your income any reimbursements you receive for transportation, meals, and other expenses you have in training for, or actually providing, volunteer federal income tax counseling for the elderly (TCE). Federal tax forms 2011 ez   You can deduct as a charitable contribution your unreimbursed out-of-pocket expenses in taking part in the volunteer income tax assistance (VITA) program. Federal tax forms 2011 ez See chapter 24. Federal tax forms 2011 ez Sickness and Injury Benefits This section discusses sickness and injury benefits including disability pensions, long-term care insurance contracts, workers' compensation, and other benefits. Federal tax forms 2011 ez In most cases, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. Federal tax forms 2011 ez If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. Federal tax forms 2011 ez However, certain payments may not be taxable to you. Federal tax forms 2011 ez Your employer should be able to give you specific details about your pension plan and tell you the amount you paid for your disability pension. Federal tax forms 2011 ez In addition to disability pensions and annuities, you may be receiving other payments for sickness and injury. Federal tax forms 2011 ez Do not report as income any amounts paid to reimburse you for medical expenses you incurred after the plan was established. Federal tax forms 2011 ez Cost paid by you. Federal tax forms 2011 ez   If you pay the entire cost of a health or accident insurance plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. Federal tax forms 2011 ez If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. Federal tax forms 2011 ez See Reimbursement in a later year in chapter 21. Federal tax forms 2011 ez Cafeteria plans. Federal tax forms 2011 ez   In most cases, if you are covered by an accident or health insurance plan through a cafeteria plan, and the amount of the insurance premiums was not included in your income, you are not considered to have paid the premiums and you must include any benefits you receive in your income. Federal tax forms 2011 ez If the amount of the premiums was included in your income, you are considered to have paid the premiums, and any benefits you receive are not taxable. Federal tax forms 2011 ez Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. Federal tax forms 2011 ez You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A, until you reach minimum retirement age. Federal tax forms 2011 ez Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Federal tax forms 2011 ez You may be entitled to a tax credit if you were permanently and totally disabled when you retired. Federal tax forms 2011 ez For information on this credit and the definition of permanent and total disability, see chapter 33. Federal tax forms 2011 ez Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Federal tax forms 2011 ez Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Federal tax forms 2011 ez The rules for reporting pensions are explained in How To Report in chapter 10. Federal tax forms 2011 ez For information on disability payments from a governmental program provided as a substitute for unemployment compensation, see chapter 12. Federal tax forms 2011 ez Retirement and profit-sharing plans. Federal tax forms 2011 ez   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. Federal tax forms 2011 ez The payments must be reported as a pension or annuity. Federal tax forms 2011 ez For more information on pensions, see chapter 10. Federal tax forms 2011 ez Accrued leave payment. Federal tax forms 2011 ez   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. Federal tax forms 2011 ez The payment is not a disability payment. Federal tax forms 2011 ez Include it in your income in the tax year you receive it. Federal tax forms 2011 ez Military and Government Disability Pensions Certain military and government disability pensions are not taxable. Federal tax forms 2011 ez Service-connected disability. Federal tax forms 2011 ez   You may be able to exclude from income amounts you receive as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in one of the following government services. Federal tax forms 2011 ez The armed forces of any country. Federal tax forms 2011 ez The National Oceanic and Atmospheric Administration. Federal tax forms 2011 ez The Public Health Service. Federal tax forms 2011 ez The Foreign Service. Federal tax forms 2011 ez Conditions for exclusion. Federal tax forms 2011 ez   Do not include the disability payments in your income if any of the following conditions apply. Federal tax forms 2011 ez You were entitled to receive a disability payment before September 25, 1975. Federal tax forms 2011 ez You were a member of a listed government service or its reserve component, or were under a binding written commitment to become a member, on September 24, 1975. Federal tax forms 2011 ez You receive the disability payments for a combat-related injury. Federal tax forms 2011 ez This is a personal injury or sickness that Results directly from armed conflict, Takes place while you are engaged in extra-hazardous service, Takes place under conditions simulating war, including training exercises such as maneuvers, or Is caused by an instrumentality of war. Federal tax forms 2011 ez You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it. Federal tax forms 2011 ez Your exclusion under this condition is equal to the amount you would be entitled to receive from the VA. Federal tax forms 2011 ez Pension based on years of service. Federal tax forms 2011 ez   If you receive a disability pension based on years of service, in most cases you must include it in your income. Federal tax forms 2011 ez However, if the pension qualifies for the exclusion for a service-connected disability (discussed earlier), do not include in income the part of your pension that you would have received if the pension had been based on a percentage of disability. Federal tax forms 2011 ez You must include the rest of your pension in your income. Federal tax forms 2011 ez Retroactive VA determination. Federal tax forms 2011 ez   If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive. Federal tax forms 2011 ez You can claim a refund of any tax paid on the excludable amount (subject to the statute of limitations) by filing an amended return on Form 1040X for each previous year during the retroactive period. Federal tax forms 2011 ez You must include with each Form 1040X a copy of the official VA Determination letter granting the retroactive benefit. Federal tax forms 2011 ez The letter must show the amount withheld and the effective date of the benefit. Federal tax forms 2011 ez   If you receive a lump-sum disability severance payment and are later awarded VA disability benefits, exclude 100% of the severance benefit from your income. Federal tax forms 2011 ez However, you must include in your income any lump-sum readjustment or other nondisability severance payment you received on release from active duty, even if you are later given a retroactive disability rating by the VA. Federal tax forms 2011 ez Special statute of limitations. Federal tax forms 2011 ez   In most cases, under the statute of limitations a claim for credit or refund must be filed within 3 years from the time a return was filed. Federal tax forms 2011 ez However, if you receive a retroactive service-connected disability rating determination, the statute of limitations is extended by a 1-year period beginning on the date of the determination. Federal tax forms 2011 ez This 1-year extended period applies to claims for credit or refund filed after June 17, 2008, and does not apply to any tax year that began more than 5 years before the date of the determination. Federal tax forms 2011 ez Example. Federal tax forms 2011 ez You retired in 2007 and receive a pension based on your years of service. Federal tax forms 2011 ez On August 1, 2013, you receive a determination of service-connected disability retroactive to 2007. Federal tax forms 2011 ez Generally, you could claim a refund for the taxes paid on your pension for 2010, 2011, and 2012. Federal tax forms 2011 ez However, under the special limitation period, you can also file a claim for 2009 as long as you file the claim by August 1, 2014. Federal tax forms 2011 ez You cannot file a claim for 2007 and 2008 because those tax years began more than 5 years before the determination. Federal tax forms 2011 ez Terrorist attack or military action. Federal tax forms 2011 ez   Do not include in your income disability payments you receive for injuries resulting directly from a terrorist or military action. Federal tax forms 2011 ez Long-Term Care Insurance Contracts Long-term care insurance contracts in most cases are treated as accident and health insurance contracts. Federal tax forms 2011 ez Amounts you receive from them (other than policyholder dividends or premium refunds) in most cases are excludable from income as amounts received for personal injury or sickness. Federal tax forms 2011 ez To claim an exclusion for payments made on a per diem or other periodic basis under a long-term care insurance contract, you must file Form 8853 with your return. Federal tax forms 2011 ez A long-term care insurance contract is an insurance contract that only provides coverage for qualified long-term care services. Federal tax forms 2011 ez The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract may be used only to reduce future premiums or increase future benefits, and In most cases, not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer or the contract makes per diem or other periodic payments without regard to expenses. Federal tax forms 2011 ez Qualified long-term care services. Federal tax forms 2011 ez   Qualified long-term care services are: Necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance and personal care services, and Required by a chronically ill individual and provided pursuant to a plan of care as prescribed by a licensed health care practitioner. Federal tax forms 2011 ez Chronically ill individual. Federal tax forms 2011 ez   A chronically ill individual is one who has been certified by a licensed health care practitioner within the previous 12 months as one of the following: An individual who, for at least 90 days, is unable to perform at least two activities of daily living without substantial assistance due to loss of functional capacity. Federal tax forms 2011 ez Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. Federal tax forms 2011 ez An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. Federal tax forms 2011 ez Limit on exclusion. Federal tax forms 2011 ez   You generally can exclude from gross income up to $320 a day for 2013. Federal tax forms 2011 ez See Limit on exclusion, under Long-Term Care Insurance Contracts, under Sickness and Injury Benefits in Publication 525 for more information. Federal tax forms 2011 ez Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. Federal tax forms 2011 ez The exemption also applies to your survivors. Federal tax forms 2011 ez The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. Federal tax forms 2011 ez If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Federal tax forms 2011 ez For more information, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Federal tax forms 2011 ez Return to work. Federal tax forms 2011 ez    If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. Federal tax forms 2011 ez Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. Federal tax forms 2011 ez Railroad sick pay. Federal tax forms 2011 ez    Payments you receive as sick pay under the Railroad Unemployment Insurance Act are taxable and you must include them in your income. Federal tax forms 2011 ez However, do not include them in your income if they are for an on-the-job injury. Federal tax forms 2011 ez   If you received income because of a disability, see Disability Pensions , earlier. Federal tax forms 2011 ez Federal Employees' Compensation Act (FECA). Federal tax forms 2011 ez   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. Federal tax forms 2011 ez However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. Federal tax forms 2011 ez Report this income on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040-EZ. Federal tax forms 2011 ez Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. Federal tax forms 2011 ez    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Federal tax forms 2011 ez For a discussion of the taxability of these benefits, see Social security and equivalent railroad retirement benefits under Other Income, in Publication 525. Federal tax forms 2011 ez    You can deduct the amount you spend to buy back sick leave for an earlier year to be eligible for nontaxable FECA benefits for that period. Federal tax forms 2011 ez It is a miscellaneous deduction subject to the 2%-of-AGI limit on Schedule A (Form 1040). Federal tax forms 2011 ez If you buy back sick leave in the same year you used it, the amount reduces your taxable sick leave pay. Federal tax forms 2011 ez Do not deduct it separately. Federal tax forms 2011 ez Other compensation. Federal tax forms 2011 ez   Many other amounts you receive as compensation for sickness or injury are not taxable. Federal tax forms 2011 ez These include the following amounts. Federal tax forms 2011 ez Compensatory damages you receive for physical injury or physical sickness, whether paid in a lump sum or in periodic payments. Federal tax forms 2011 ez Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. Federal tax forms 2011 ez Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. Federal tax forms 2011 ez Compensation you receive for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement. Federal tax forms 2011 ez This compensation must be based only on the injury and not on the period of your absence from work. Federal tax forms 2011 ez These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. Federal tax forms 2011 ez Reimbursement for medical care. Federal tax forms 2011 ez    A reimbursement for medical care is generally not taxable. Federal tax forms 2011 ez However, it may reduce your medical expense deduction. Federal tax forms 2011 ez For more information, see chapter 21. Federal tax forms 2011 ez Prev  Up  Next   Home   More Online Publications