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Help Filling Out 1040x

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Help Filling Out 1040x

Help filling out 1040x 2. Help filling out 1040x   Accounting Periods and Methods Table of Contents Introduction Useful Items - You may want to see: Accounting Periods Accounting MethodsCash Method Accrual Method Combination Method Inventories Uniform Capitalization Rules Special Methods Change in Accounting Method Introduction You must figure your taxable income and file an income tax return for an annual accounting period called a tax year. Help filling out 1040x Also, you must consistently use an accounting method that clearly shows your income and expenses for the tax year. Help filling out 1040x Useful Items - You may want to see: Publication 538 Accounting Periods and Methods See chapter 12 for information about getting publications and forms. Help filling out 1040x Accounting Periods When preparing a statement of income and expenses (generally your income tax return), you must use your books and records for a specific interval of time called an accounting period. Help filling out 1040x The annual accounting period for your income tax return is called a tax year. Help filling out 1040x You can use one of the following tax years. Help filling out 1040x A calendar tax year. Help filling out 1040x A fiscal tax year. Help filling out 1040x Unless you have a required tax year, you adopt a tax year by filing your first income tax return using that tax year. Help filling out 1040x A required tax year is a tax year required under the Internal Revenue Code or the Income Tax Regulations. Help filling out 1040x Calendar tax year. Help filling out 1040x   A calendar tax year is 12 consecutive months beginning January 1 and ending December 31. Help filling out 1040x   You must adopt the calendar tax year if any of the following apply. Help filling out 1040x You do not keep books. Help filling out 1040x You have no annual accounting period. Help filling out 1040x Your present tax year does not qualify as a fiscal year. Help filling out 1040x Your use of the calendar tax year is required under the Internal Revenue Code or the Income Tax Regulations. Help filling out 1040x   If you filed your first income tax return using the calendar tax year and you later begin business as a sole proprietor, you must continue to use the calendar tax year unless you get IRS approval to change it or are otherwise allowed to change it without IRS approval. Help filling out 1040x For more information, see Change in tax year, later. Help filling out 1040x   If you adopt the calendar tax year, you must maintain your books and records and report your income and expenses for the period from January 1 through December 31 of each year. Help filling out 1040x Fiscal tax year. Help filling out 1040x   A fiscal tax year is 12 consecutive months ending on the last day of any month except December. Help filling out 1040x A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month. Help filling out 1040x   If you adopt a fiscal tax year, you must maintain your books and records and report your income and expenses using the same tax year. Help filling out 1040x   For more information on a fiscal tax year, including a 52-53-week tax year, see Publication 538. Help filling out 1040x Change in tax year. Help filling out 1040x   Generally, you must file Form 1128, Application To Adopt, Change, or Retain a Tax Year, to request IRS approval to change your tax year. Help filling out 1040x See the Instructions for Form 1128 for exceptions. Help filling out 1040x If you qualify for an automatic approval request, a user fee is not required. Help filling out 1040x If you do not qualify for automatic approval, a ruling must be requested. Help filling out 1040x See the instructions for Form 1128 for information about user fees if you are requesting a ruling. Help filling out 1040x Accounting Methods An accounting method is a set of rules used to determine when and how income and expenses are reported. Help filling out 1040x Your accounting method includes not only the overall method of accounting you use, but also the accounting treatment you use for any material item. Help filling out 1040x You choose an accounting method for your business when you file your first income tax return that includes a Schedule C for the business. Help filling out 1040x After that, if you want to change your accounting method, you must generally get IRS approval. Help filling out 1040x See Change in Accounting Method, later. Help filling out 1040x Kinds of methods. Help filling out 1040x   Generally, you can use any of the following accounting methods. Help filling out 1040x Cash method. Help filling out 1040x An accrual method. Help filling out 1040x Special methods of accounting for certain items of income and expenses. Help filling out 1040x Combination method using elements of two or more of the above. Help filling out 1040x You must use the same accounting method to figure your taxable income and to keep your books. Help filling out 1040x Also, you must use an accounting method that clearly shows your income. Help filling out 1040x Business and personal items. Help filling out 1040x   You can account for business and personal items under different accounting methods. Help filling out 1040x For example, you can figure your business income under an accrual method, even if you use the cash method to figure personal items. Help filling out 1040x Two or more businesses. Help filling out 1040x   If you have two or more separate and distinct businesses, you can use a different accounting method for each if the method clearly reflects the income of each business. Help filling out 1040x They are separate and distinct only if you maintain complete and separate books and records for each business. Help filling out 1040x Cash Method Most individuals and many sole proprietors with no inventory use the cash method because they find it easier to keep cash method records. Help filling out 1040x However, if an inventory is necessary to account for your income, you must generally use an accrual method of accounting for sales and purchases. Help filling out 1040x For more information, see Inventories, later. Help filling out 1040x Income Under the cash method, include in your gross income all items of income you actually or constructively receive during your tax year. Help filling out 1040x If you receive property or services, you must include their fair market value in income. Help filling out 1040x Example. Help filling out 1040x On December 30, 2012, Mrs. Help filling out 1040x Sycamore sent you a check for interior decorating services you provided to her. Help filling out 1040x You received the check on January 2, 2013. Help filling out 1040x You must include the amount of the check in income for 2013. Help filling out 1040x Constructive receipt. Help filling out 1040x   You have constructive receipt of income when an amount is credited to your account or made available to you without restriction. Help filling out 1040x You do not need to have possession of it. Help filling out 1040x If you authorize someone to be your agent and receive income for you, you are treated as having received it when your agent received it. Help filling out 1040x Example. Help filling out 1040x Interest is credited to your bank account in December 2013. Help filling out 1040x You do not withdraw it or enter it into your passbook until 2014. Help filling out 1040x You must include it in your gross income for 2013. Help filling out 1040x Delaying receipt of income. Help filling out 1040x   You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. Help filling out 1040x You must report the income in the year the property is received or made available to you without restriction. Help filling out 1040x Example. Help filling out 1040x Frances Jones, a service contractor, was entitled to receive a $10,000 payment on a contract in December 2013. Help filling out 1040x She was told in December that her payment was available. Help filling out 1040x At her request, she was not paid until January 2014. Help filling out 1040x She must include this payment in her 2013 income because it was constructively received in 2013. Help filling out 1040x Checks. Help filling out 1040x   Receipt of a valid check by the end of the tax year is constructive receipt of income in that year, even if you cannot cash or deposit the check until the following year. Help filling out 1040x Example. Help filling out 1040x Dr. Help filling out 1040x Redd received a check for $500 on December 31, 2013, from a patient. Help filling out 1040x She could not deposit the check in her business account until January 2, 2014. Help filling out 1040x She must include this fee in her income for 2013. Help filling out 1040x Debts paid by another person or canceled. Help filling out 1040x   If your debts are paid by another person or are canceled by your creditors, you may have to report part or all of this debt relief as income. Help filling out 1040x If you receive income in this way, you constructively receive the income when the debt is canceled or paid. Help filling out 1040x For more information, see Canceled Debt under Kinds of Income in chapter 5. Help filling out 1040x Repayment of income. Help filling out 1040x   If you include an amount in income and in a later year you have to repay all or part of it, you can usually deduct the repayment in the year in which you make it. Help filling out 1040x If the amount you repay is over $3,000, a special rule applies. Help filling out 1040x For details about the special rule, see Repayments in chapter 11 of Publication 535, Business Expenses. Help filling out 1040x Expenses Under the cash method, you generally deduct expenses in the tax year in which you actually pay them. Help filling out 1040x This includes business expenses for which you contest liability. Help filling out 1040x However, you may not be able to deduct an expense paid in advance or you may be required to capitalize certain costs, as explained later under Uniform Capitalization Rules. Help filling out 1040x Expenses paid in advance. Help filling out 1040x   You can deduct an expense you pay in advance only in the year to which it applies. Help filling out 1040x Example. Help filling out 1040x You are a calendar year taxpayer and you pay $1,000 in 2013 for a business insurance policy effective for one year, beginning July 1. Help filling out 1040x You can deduct $500 in 2013 and $500 in 2014. Help filling out 1040x Accrual Method Under an accrual method of accounting, you generally report income in the year earned and deduct or capitalize expenses in the year incurred. Help filling out 1040x The purpose of an accrual method of accounting is to match income and expenses in the correct year. Help filling out 1040x Income—General Rule Under an accrual method, you generally include an amount in your gross income for the tax year in which all events that fix your right to receive the income have occurred and you can determine the amount with reasonable accuracy. Help filling out 1040x Example. Help filling out 1040x You are a calendar year accrual method taxpayer. Help filling out 1040x You sold a computer on December 28, 2013. Help filling out 1040x You billed the customer in the first week of January 2014, but you did not receive payment until February 2014. Help filling out 1040x You must include the amount received for the computer in your 2013 income. Help filling out 1040x Income—Special Rules The following are special rules that apply to advance payments, estimating income, and changing a payment schedule for services. Help filling out 1040x Estimated income. Help filling out 1040x   If you include a reasonably estimated amount in gross income, and later determine the exact amount is different, take the difference into account in the tax year in which you make the determination. Help filling out 1040x Change in payment schedule for services. Help filling out 1040x   If you perform services for a basic rate specified in a contract, you must accrue the income at the basic rate, even if you agree to receive payments at a lower rate until you complete the services and then receive the difference. Help filling out 1040x Advance payments for services. Help filling out 1040x   Generally, you report an advance payment for services to be performed in a later tax year as income in the year you receive the payment. Help filling out 1040x However, if you receive an advance payment for services you agree to perform by the end of the next tax year, you can elect to postpone including the advance payment in income until the next tax year. Help filling out 1040x However, you cannot postpone including any payment beyond that tax year. Help filling out 1040x   For more information, see Advance Payment for Services under Accrual Method in Publication 538. Help filling out 1040x That publication also explains special rules for reporting the following types of income. Help filling out 1040x Advance payments for service agreements. Help filling out 1040x Prepaid rent. Help filling out 1040x Advance payments for sales. Help filling out 1040x   Special rules apply to including income from advance payments on agreements for future sales or other dispositions of goods you hold primarily for sale to your customers in the ordinary course of your business. Help filling out 1040x If the advance payments are for contracts involving both the sale and service of goods, it may be necessary to treat them as two agreements. Help filling out 1040x An agreement includes a gift certificate that can be redeemed for goods. Help filling out 1040x Treat amounts that are due and payable as amounts you received. Help filling out 1040x   You generally include an advance payment in income for the tax year in which you receive it. Help filling out 1040x However, you can use an alternative method. Help filling out 1040x For information about the alternative method, see Publication 538. Help filling out 1040x Expenses Under an accrual method of accounting, you generally deduct or capitalize a business expense when both the following apply. Help filling out 1040x The all-events test has been met. Help filling out 1040x The test has been met when: All events have occurred that fix the fact of liability, and The liability can be determined with reasonable accuracy. Help filling out 1040x Economic performance has occurred. Help filling out 1040x Economic performance. Help filling out 1040x   You generally cannot deduct or capitalize a business expense until economic performance occurs. Help filling out 1040x If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided or as the property is used. Help filling out 1040x If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. Help filling out 1040x An exception allows certain recurring items to be treated as incurred during a tax year even though economic performance has not occurred. Help filling out 1040x For more information on economic performance, see Economic Performance under Accrual Method in Publication 538. Help filling out 1040x Example. Help filling out 1040x You are a calendar year taxpayer and use an accrual method of accounting. Help filling out 1040x You buy office supplies in December 2013. Help filling out 1040x You receive the supplies and the bill in December, but you pay the bill in January 2014. Help filling out 1040x You can deduct the expense in 2013 because all events that fix the fact of liability have occurred, the amount of the liability could be reasonably determined, and economic performance occurred in that year. Help filling out 1040x Your office supplies may qualify as a recurring expense. Help filling out 1040x In that case, you can deduct them in 2013 even if the supplies are not delivered until 2014 (when economic performance occurs). Help filling out 1040x Keeping inventories. Help filling out 1040x   When the production, purchase, or sale of merchandise is an income-producing factor in your business, you must generally take inventories into account at the beginning and the end of your tax year. Help filling out 1040x If you must account for an inventory, you must generally use an accrual method of accounting for your purchases and sales. Help filling out 1040x For more information, see Inventories , later. Help filling out 1040x Special rule for related persons. Help filling out 1040x   You cannot deduct business expenses and interest owed to a related person who uses the cash method of accounting until you make the payment and the corresponding amount is includible in the related person's gross income. Help filling out 1040x Determine the relationship, for this rule, as of the end of the tax year for which the expense or interest would otherwise be deductible. Help filling out 1040x If a deduction is not allowed under this rule, the rule will continue to apply even if your relationship with the person ends before the expense or interest is includible in the gross income of that person. Help filling out 1040x   Related persons include members of your immediate family, including only brothers and sisters (either whole or half), your spouse, ancestors, and lineal descendants. Help filling out 1040x For a list of other related persons, see section 267 of the Internal Revenue Code. Help filling out 1040x Combination Method You can generally use any combination of cash, accrual, and special methods of accounting if the combination clearly shows your income and expenses and you use it consistently. Help filling out 1040x However, the following restrictions apply. Help filling out 1040x If an inventory is necessary to account for your income, you must generally use an accrual method for purchases and sales. Help filling out 1040x (See, however, Inventories, later. Help filling out 1040x ) You can use the cash method for all other items of income and expenses. Help filling out 1040x If you use the cash method for figuring your income, you must use the cash method for reporting your expenses. Help filling out 1040x If you use an accrual method for reporting your expenses, you must use an accrual method for figuring your income. Help filling out 1040x If you use a combination method that includes the cash method, treat that combination method as the cash method. Help filling out 1040x Inventories Generally, if you produce, purchase, or sell merchandise in your business, you must keep an inventory and use the accrual method for purchases and sales of merchandise. Help filling out 1040x However, the following taxpayers can use the cash method of accounting even if they produce, purchase, or sell merchandise. Help filling out 1040x These taxpayers can also account for inventoriable items as materials and supplies that are not incidental (discussed later). Help filling out 1040x A qualifying taxpayer under Revenue Procedure 2001-10 in Internal Revenue Bulletin 2001-2. Help filling out 1040x A qualifying small business taxpayer under Revenue Procedure 2002-28 in Internal Revenue Bulletin 2002-18. Help filling out 1040x Qualifying taxpayer. Help filling out 1040x   You are a qualifying taxpayer if: Your average annual gross receipts for each prior tax year ending on or after December 17, 1998, is $1 million or less. Help filling out 1040x (Your average annual gross receipts for a tax year is figured by adding the gross receipts for that tax year and the 2 preceding tax years and dividing by 3. Help filling out 1040x ) Your business is not a tax shelter, as defined under section 448(d)(3) of the Internal Revenue Code. Help filling out 1040x Qualifying small business taxpayer. Help filling out 1040x   You are a qualifying small business taxpayer if: Your average annual gross receipts for each prior tax year ending on or after December 31, 2000, is more than $1 million but not more than $10 million. Help filling out 1040x (Your average annual gross receipts for a tax year is figured by adding the gross receipts for that tax year and the 2 preceding tax years and dividing the total by 3. Help filling out 1040x ) You are not prohibited from using the cash method under section 448 of the Internal Revenue Code. Help filling out 1040x Your principal business activity is an eligible business (described in Publication 538 and Revenue Procedure 2002-28). Help filling out 1040x Business not owned or not in existence for 3 years. Help filling out 1040x   If you did not own your business for all of the 3-tax-year period used in figuring your average annual gross receipts, include the period of any predecessor. Help filling out 1040x If your business has not been in existence for the 3-tax-year period, base your average on the period it has existed including any short tax years, annualizing the short tax year's gross receipts. Help filling out 1040x Materials and supplies that are not incidental. Help filling out 1040x   If you account for inventoriable items as materials and supplies that are not incidental, you will deduct the cost of the items you would otherwise include in inventory in the year you sell the items, or the year you pay for them, whichever is later. Help filling out 1040x If you are a producer, you can use any reasonable method to estimate the raw material in your work in process and finished goods on hand at the end of the year to determine the raw material used to produce finished goods that were sold during the year. Help filling out 1040x Changing accounting method. Help filling out 1040x   If you are a qualifying taxpayer or qualifying small business taxpayer and want to change to the cash method or to account for inventoriable items as non-incidental materials and supplies, you must file Form 3115, Application for Change in Accounting Method. Help filling out 1040x See Change in Accounting Method, later. Help filling out 1040x More information. Help filling out 1040x    For more information about the qualifying taxpayer exception, see Revenue Procedure 2001-10 in Internal Revenue Bulletin 2001-2. Help filling out 1040x For more information about the qualifying small business taxpayer exception, see Revenue Procedure 2002-28 in Internal Revenue Bulletin 2002-18. Help filling out 1040x Items included in inventory. Help filling out 1040x   If you are required to account for inventories, include the following items when accounting for your inventory. Help filling out 1040x Merchandise or stock in trade. Help filling out 1040x Raw materials. Help filling out 1040x Work in process. Help filling out 1040x Finished products. Help filling out 1040x Supplies that physically become a part of the item intended for sale. Help filling out 1040x Valuing inventory. Help filling out 1040x   You must value your inventory at the beginning and end of each tax year to determine your cost of goods sold (Schedule C, line 42). Help filling out 1040x To determine the value of your inventory, you need a method for identifying the items in your inventory and a method for valuing these items. Help filling out 1040x   Inventory valuation rules cannot be the same for all kinds of businesses. Help filling out 1040x The method you use to value your inventory must conform to generally accepted accounting principles for similar businesses and must clearly reflect income. Help filling out 1040x Your inventory practices must be consistent from year to year. Help filling out 1040x More information. Help filling out 1040x   For more information about inventories, see Publication 538. Help filling out 1040x Uniform Capitalization Rules Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for production or resale activities. Help filling out 1040x Include these costs in the basis of property you produce or acquire for resale, rather than claiming them as a current deduction. Help filling out 1040x You recover the costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Help filling out 1040x Activities subject to the uniform capitalization rules. Help filling out 1040x   You may be subject to the uniform capitalization rules if you do any of the following, unless the property is produced for your use other than in a business or an activity carried on for profit. Help filling out 1040x Produce real or tangible personal property. Help filling out 1040x For this purpose, tangible personal property includes a film, sound recording, video tape, book, or similar property. Help filling out 1040x Acquire property for resale. Help filling out 1040x Exceptions. Help filling out 1040x   These rules do not apply to the following property. Help filling out 1040x Personal property you acquire for resale if your average annual gross receipts are $10 million or less. Help filling out 1040x Property you produce if you meet either of the following conditions. Help filling out 1040x Your indirect costs of producing the property are $200,000 or less. Help filling out 1040x You use the cash method of accounting and do not account for inventories. Help filling out 1040x For more information, see Inventories, earlier. Help filling out 1040x Special Methods There are special methods of accounting for certain items of income or expense. Help filling out 1040x These include the following. Help filling out 1040x Amortization, discussed in chapter 8 of Publication 535, Business Expenses. Help filling out 1040x Bad debts, discussed in chapter 10 of Publication 535. Help filling out 1040x Depletion, discussed in chapter 9 of Publication 535. Help filling out 1040x Depreciation, discussed in Publication 946, How To Depreciate Property. Help filling out 1040x Installment sales, discussed in Publication 537, Installment Sales. Help filling out 1040x Change in Accounting Method Once you have set up your accounting method, you must generally get IRS approval before you can change to another method. Help filling out 1040x A change in your accounting method includes a change in: Your overall method, such as from cash to an accrual method, and Your treatment of any material item. Help filling out 1040x To get approval, you must file Form 3115, Application for Change in Accounting Method. Help filling out 1040x You can get IRS approval to change an accounting method under either the automatic change procedures or the advance consent request procedures. Help filling out 1040x You may have to pay a user fee. Help filling out 1040x For more information, see the form instructions. Help filling out 1040x Automatic change procedures. Help filling out 1040x   Certain taxpayers can presume to have IRS approval to change their method of accounting. Help filling out 1040x The approval is granted for the tax year for which the taxpayer requests a change (year of change), if the taxpayer complies with the provisions of the automatic change procedures. Help filling out 1040x No user fee is required for an application filed under an automatic change procedure generally covered in Revenue Procedure 2002-9. Help filling out 1040x   Generally, you must use Form 3115 to request an automatic change. Help filling out 1040x For more information, see the Instructions for Form 3115. Help filling out 1040x Prev  Up  Next   Home   More Online Publications
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Is My Pension or Annuity Payment Taxable?

This application will help you determine if your pension or annuity payment from an employer sponsored retirement plan is taxable.  This application does not address Individual Retirement Arrangements (IRAs).

Information You Will Need:

  • All income documents
  • Federal income tax withheld (Form W2-P or Form1099)

Estimated Completion Time: 11 minutes. However: 5 minutes of inactivity will end the interview and you will be forced to start over.

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Page Last Reviewed or Updated: 14-Feb-2014

The Help Filling Out 1040x

Help filling out 1040x Publication 596 - Main Content Table of Contents Chapter 1—Rules for EveryoneRule 1—Adjusted Gross Income (AGI) Limits Rule 2—You Must Have a Valid Social Security Number (SSN) Rule 3—Your Filing Status Cannot Be Married Filing Separately Rule 4—You Must Be a U. Help filling out 1040x S. Help filling out 1040x Citizen or Resident Alien All Year Rule 5—You Cannot File Form 2555 or Form 2555-EZ Rule 6—Your Investment Income Must Be $3,300 or Less Rule 7—You Must Have Earned Income Chapter 2—Rules If You Have a Qualifying ChildRule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9—Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer Chapter 3—Rules If You Do Not Have a Qualifying ChildRule 11—You Must Be at Least Age 25 but Under Age 65 Rule 12—You Cannot Be the Dependent of Another Person Rule 13—You Cannot Be a Qualifying Child of Another Taxpayer Rule 14—You Must Have Lived in the United States More Than Half of the Year Chapter 4—Figuring and Claiming the EICRule 15—Earned Income Limits IRS Will Figure the EIC for You How To Figure the EIC Yourself Schedule EIC Chapter 5—Disallowance of the EICForm 8862 Are You Prohibited From Claiming the EIC for a Period of Years? Chapter 6—Detailed ExamplesExample 1—Sharon Rose Example 2—Cynthia and Jerry Grey Chapter 1—Rules for Everyone This chapter discusses Rules 1 through 7. Help filling out 1040x You must meet all seven rules to qualify for the earned income credit. Help filling out 1040x If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the publication. Help filling out 1040x If you meet all seven rules in this chapter, then read either chapter 2 or chapter 3 (whichever applies) for more rules you must meet. Help filling out 1040x Rule 1—Adjusted Gross Income (AGI) Limits Your adjusted gross income (AGI) must be less than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Help filling out 1040x Adjusted gross income (AGI). Help filling out 1040x   AGI is the amount on line 4 of Form 1040EZ, line 22 of Form 1040A, or line 38 of Form 1040. Help filling out 1040x   If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. Help filling out 1040x You do not need to read the rest of this publication. Help filling out 1040x Example—AGI is more than limit. Help filling out 1040x Your AGI is $38,550, you are single, and you have one qualifying child. Help filling out 1040x You cannot claim the EIC because your AGI is not less than $37,870. Help filling out 1040x However, if your filing status was married filing jointly, you might be able to claim the EIC because your AGI is less than $43,210. Help filling out 1040x Community property. Help filling out 1040x   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3), and live in a state that has community property laws, your AGI includes that portion of both your and your spouse's wages that you are required to include in gross income. Help filling out 1040x This is different from the community property rules that apply under Rule 7. Help filling out 1040x Rule 2—You Must Have a Valid Social Security Number (SSN) To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). Help filling out 1040x Any qualifying child listed on Schedule EIC also must have a valid SSN. Help filling out 1040x (See Rule 8 if you have a qualifying child. Help filling out 1040x ) If your social security card (or your spouse's, if filing a joint return) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. Help filling out 1040x An example of a federally funded benefit is Medicaid. Help filling out 1040x If you have a card with the legend “Not valid for employment” and your immigration status has changed so that you are now a U. Help filling out 1040x S. Help filling out 1040x citizen or permanent resident, ask the SSA for a new social security card without the legend. Help filling out 1040x If you get the new card after you have already filed your return, you can file an amended return on Form 1040X, Amended U. Help filling out 1040x S. Help filling out 1040x Individual Income Tax Return, to claim the EIC. Help filling out 1040x U. Help filling out 1040x S. Help filling out 1040x citizen. Help filling out 1040x   If you were a U. Help filling out 1040x S. Help filling out 1040x citizen when you received your SSN, you have a valid SSN. Help filling out 1040x Valid for work only with INS authorization or DHS authorization. Help filling out 1040x   If your social security card reads “Valid for work only with INS authorization” or “Valid for work only with DHS authorization,” you have a valid SSN, but only if that authorization is still valid. Help filling out 1040x SSN missing or incorrect. Help filling out 1040x   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. Help filling out 1040x Other taxpayer identification number. Help filling out 1040x   You cannot get the EIC if, instead of an SSN, you (or your spouse, if filing a joint return) have an individual taxpayer identification number (ITIN). Help filling out 1040x ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. Help filling out 1040x No SSN. Help filling out 1040x   If you do not have a valid SSN, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Help filling out 1040x You cannot claim the EIC. Help filling out 1040x Getting an SSN. Help filling out 1040x   If you (or your spouse, if filing a joint return) do not have an SSN, you can apply for one by filing Form SS-5 with the SSA. Help filling out 1040x You can get Form SS-5 online at www. Help filling out 1040x socialsecurity. Help filling out 1040x gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. Help filling out 1040x Filing deadline approaching and still no SSN. Help filling out 1040x   If the filing deadline is approaching and you still do not have an SSN, you have two choices. Help filling out 1040x Request an automatic 6-month extension of time to file your return. Help filling out 1040x You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Help filling out 1040x S. Help filling out 1040x Individual Income Tax Return. Help filling out 1040x For more information, see the instructions for Form 4868. Help filling out 1040x File the return on time without claiming the EIC. Help filling out 1040x After receiving the SSN, file an amended return, Form 1040X, claiming the EIC. Help filling out 1040x Attach a filled-in Schedule EIC, Earned Income Credit, if you have a qualifying child. Help filling out 1040x Rule 3—Your Filing Status Cannot Be “Married Filing Separately” If you are married, you usually must file a joint return to claim the EIC. Help filling out 1040x Your filing status cannot be “Married filing separately. Help filling out 1040x ” Spouse did not live with you. Help filling out 1040x   If you are married and your spouse did not live in your home at any time during the last 6 months of the year, you may be able to file as head of household, instead of married filing separately. Help filling out 1040x In that case, you may be able to claim the EIC. Help filling out 1040x For detailed information about filing as head of household, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Help filling out 1040x Rule 4—You Must Be a U. Help filling out 1040x S. Help filling out 1040x Citizen or Resident Alien All Year If you (or your spouse, if married) were a nonresident alien for any part of the year, you cannot claim the earned income credit unless your filing status is married filing jointly. Help filling out 1040x You can use that filing status only if one spouse is a U. Help filling out 1040x S. Help filling out 1040x citizen or resident alien and you choose to treat the nonresident spouse as a U. Help filling out 1040x S. Help filling out 1040x resident. Help filling out 1040x If you make this choice, you and your spouse are taxed on your worldwide income. Help filling out 1040x If you need more information on making this choice, get Publication 519, U. Help filling out 1040x S. Help filling out 1040x Tax Guide for Aliens. Help filling out 1040x If you (or your spouse, if married) were a nonresident alien for any part of the year and your filing status is not married filing jointly, enter “No” on the dotted line next to line 64a (Form 1040) or in the space to the left of line 38a (Form 1040A). Help filling out 1040x Rule 5—You Cannot File Form 2555 or Form 2555-EZ You cannot claim the earned income credit if you file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. Help filling out 1040x You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. Help filling out 1040x U. Help filling out 1040x S. Help filling out 1040x possessions are not foreign countries. Help filling out 1040x See Publication 54, Tax Guide for U. Help filling out 1040x S. Help filling out 1040x Citizens and Resident Aliens Abroad, for more detailed information. Help filling out 1040x Rule 6—Your Investment Income Must Be $3,300 or Less You cannot claim the earned income credit unless your investment income is $3,300 or less. Help filling out 1040x If your investment income is more than $3,300, you cannot claim the credit. Help filling out 1040x Form 1040EZ. Help filling out 1040x   If you file Form 1040EZ, your investment income is the total of the amount on line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. Help filling out 1040x Form 1040A. Help filling out 1040x   If you file Form 1040A, your investment income is the total of the amounts on lines 8a (taxable interest), 8b (tax-exempt interest), 9a (ordinary dividends), and 10 (capital gain distributions) on that form. Help filling out 1040x Form 1040. Help filling out 1040x   If you file Form 1040, use Worksheet 1 in this chapter to figure your investment income. Help filling out 1040x    Worksheet 1. Help filling out 1040x Investment Income If You Are Filing Form 1040 Use this worksheet to figure investment income for the earned income credit when you file Form 1040. Help filling out 1040x Interest and Dividends         1. Help filling out 1040x Enter any amount from Form 1040, line 8a 1. Help filling out 1040x   2. Help filling out 1040x Enter any amount from Form 1040, line 8b, plus any amount on Form 8814, line 1b 2. Help filling out 1040x   3. Help filling out 1040x Enter any amount from Form 1040, line 9a 3. Help filling out 1040x   4. Help filling out 1040x Enter the amount from Form 1040, line 21, that is from Form 8814 if you are filing that form to report your child's interest and dividend income on your return. Help filling out 1040x (If your child received an Alaska Permanent Fund dividend, use Worksheet 2 in this chapter to figure the amount to enter on this line. Help filling out 1040x ) 4. Help filling out 1040x   Capital Gain Net Income         5. Help filling out 1040x Enter the amount from Form 1040, line 13. Help filling out 1040x If the amount on that line is a loss, enter -0- 5. Help filling out 1040x       6. Help filling out 1040x Enter any gain from Form 4797, Sales of Business Property, line 7. Help filling out 1040x If the amount on that line is a loss, enter -0-. Help filling out 1040x (But, if you completed lines 8 and 9 of Form 4797, enter the amount from line 9 instead. Help filling out 1040x ) 6. Help filling out 1040x       7. Help filling out 1040x Substract line 6 of this worksheet from line 5 of this worksheet. Help filling out 1040x (If the result is less than zero, enter -0-. Help filling out 1040x ) 7. Help filling out 1040x   Royalties and Rental Income From Personal Property         8. Help filling out 1040x Enter any royalty income from Schedule E, line 23b, plus any income from the rental of personal property shown on Form 1040, line 21 8. Help filling out 1040x       9. Help filling out 1040x Enter any expenses from Schedule E, line 20, related to royalty income, plus any expenses from the rental of personal property deducted on Form 1040, line 36 9. Help filling out 1040x       10. Help filling out 1040x Subtract the amount on line 9 of this worksheet from the amount on line 8. Help filling out 1040x (If the result is less than zero, enter -0-. Help filling out 1040x ) 10. Help filling out 1040x   Passive Activities         11. Help filling out 1040x Enter the total of any net income from passive activities (such as income included on Schedule E, line 26, 29a (col. Help filling out 1040x (g)), 34a (col. Help filling out 1040x (d)), or 40). Help filling out 1040x (See instructions below for lines 11 and 12. Help filling out 1040x ) 11. Help filling out 1040x       12. Help filling out 1040x Enter the total of any losses from passive activities (such as losses included on Schedule E, line 26, 29b (col. Help filling out 1040x (f)), 34b (col. Help filling out 1040x (c)), or 40). Help filling out 1040x (See instructions below for lines 11 and 12. Help filling out 1040x ) 12. Help filling out 1040x       13. Help filling out 1040x Combine the amounts on lines 11 and 12 of this worksheet. Help filling out 1040x (If the result is less than zero, enter -0-. Help filling out 1040x ) 13. Help filling out 1040x   14. Help filling out 1040x Add the amounts on lines 1, 2, 3, 4, 7, 10, and 13. Help filling out 1040x Enter the total. Help filling out 1040x This is your investment income 14. Help filling out 1040x   15. Help filling out 1040x Is the amount on line 14 more than $3,300? ❑ Yes. Help filling out 1040x You cannot take the credit. Help filling out 1040x  ❑ No. Help filling out 1040x Go to Step 3 of the Form 1040 instructions for lines 64a and 64b to find out if you can take the credit (unless you are using this publication to find out if you can take the credit; in that case, go to Rule 7, next). Help filling out 1040x       Instructions for lines 11 and 12. Help filling out 1040x In figuring the amount to enter on lines 11 and 12, do not take into account any royalty income (or loss) included on line 26 of Schedule E or any amount included in your earned income. Help filling out 1040x To find out if the income on line 26 or line 40 of Schedule E is from a passive activity, see the Schedule E instructions. Help filling out 1040x If any of the rental real estate income (or loss) included on Schedule E, line 26, is not from a passive activity, print “NPA” and the amount of that income (or loss) on the dotted line next to line 26. Help filling out 1040x Worksheet 2. Help filling out 1040x Worksheet for Line 4 of Worksheet 1 Complete this worksheet only if Form 8814 includes an Alaska Permanent Fund dividend. Help filling out 1040x Note. Help filling out 1040x Fill out a separate Worksheet 2 for each Form 8814. Help filling out 1040x     1. Help filling out 1040x Enter the amount from Form 8814, line 2a 1. Help filling out 1040x   2. Help filling out 1040x Enter the amount from Form 8814, line 2b 2. Help filling out 1040x   3. Help filling out 1040x Subtract line 2 from line 1 3. Help filling out 1040x   4. Help filling out 1040x Enter the amount from Form 8814, line 1a 4. Help filling out 1040x   5. Help filling out 1040x Add lines 3 and 4 5. Help filling out 1040x   6. Help filling out 1040x Enter the amount of the child's Alaska Permanent Fund dividend 6. Help filling out 1040x   7. Help filling out 1040x Divide line 6 by line 5. Help filling out 1040x Enter the result as a decimal (rounded to at least three places) 7. Help filling out 1040x   8. Help filling out 1040x Enter the amount from Form 8814, line 12 8. Help filling out 1040x   9. Help filling out 1040x Multiply line 7 by line 8 9. Help filling out 1040x   10. Help filling out 1040x Subtract line 9 from line 8. Help filling out 1040x Enter the result on line 4 of Worksheet 1 10. Help filling out 1040x     (If filing more than one Form 8814, enter on line 4 of Worksheet 1 the total of the amounts on line 10 of all Worksheets 2. Help filling out 1040x )     Example—completing Worksheet 2. Help filling out 1040x Your 10-year-old child has taxable interest income of $400, an Alaska Permanent Fund dividend of $1,000, and ordinary dividends of $1,100, of which $500 are qualified dividends. Help filling out 1040x You choose to report this income on your return. Help filling out 1040x You enter $400 on line 1a of Form 8814, $2,100 ($1,000 + $1,100) on line 2a, and $500 on line 2b. Help filling out 1040x After completing lines 4 through 11, you enter $400 on line 12 of Form 8814 and line 21 of Form 1040. Help filling out 1040x On Worksheet 2, you enter $2,100 on line 1, $500 on line 2, $1,600 on line 3, $400 on line 4, $2,000 on line 5, $1,000 on line 6, 0. Help filling out 1040x 500 on line 7, $400 on line 8, $200 on line 9, and $200 on line 10. Help filling out 1040x You then enter $200 on line 4 of Worksheet 1. Help filling out 1040x Rule 7—You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. Help filling out 1040x If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. Help filling out 1040x If you are an employee, earned income includes all the taxable income you get from your employer. Help filling out 1040x Rule 15 has information that will help you figure the amount of your earned income. Help filling out 1040x If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the Form 1040 instructions. Help filling out 1040x Earned Income Earned income includes all of the following types of income. Help filling out 1040x Wages, salaries, tips, and other taxable employee pay. Help filling out 1040x Employee pay is earned income only if it is taxable. Help filling out 1040x Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Help filling out 1040x But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained later in this chapter. Help filling out 1040x Net earnings from self-employment. Help filling out 1040x Gross income received as a statutory employee. Help filling out 1040x Wages, salaries, and tips. Help filling out 1040x    Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. Help filling out 1040x You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). Help filling out 1040x Nontaxable combat pay election. Help filling out 1040x   You can elect to include your nontaxable combat pay in earned income for the earned income credit. Help filling out 1040x The amount of your nontaxable combat pay should be shown on your Form W-2, in box 12, with code Q. Help filling out 1040x Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. Help filling out 1040x For details, see Nontaxable combat pay in chapter 4. Help filling out 1040x Net earnings from self-employment. Help filling out 1040x   You may have net earnings from self-employment if: You own your own business, or You are a minister or member of a religious order. Help filling out 1040x Minister's housing. Help filling out 1040x   The rental value of a home or a housing allowance provided to a minister as part of the minister's pay generally is not subject to income tax but is included in net earnings from self-employment. Help filling out 1040x For that reason, it is included in earned income for the EIC (except in the cases described in Approved Form 4361 or Form 4029 , below). Help filling out 1040x Statutory employee. Help filling out 1040x   You are a statutory employee if you receive a Form W-2 on which the “Statutory employee” box (box 13) is checked. Help filling out 1040x You report your income and expenses as a statutory employee on Schedule C or C-EZ (Form 1040). Help filling out 1040x Strike benefits. Help filling out 1040x   Strike benefits paid by a union to its members are earned income. Help filling out 1040x Approved Form 4361 or Form 4029 This section is for persons who have an approved: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, or Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. Help filling out 1040x Each approved form exempts certain income from social security taxes. Help filling out 1040x Each form is discussed here in terms of what is or is not earned income for the EIC. Help filling out 1040x Form 4361. Help filling out 1040x   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. Help filling out 1040x This includes wages, salaries, tips, and other taxable employee compensation. Help filling out 1040x A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. Help filling out 1040x Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. Help filling out 1040x Examples include fees for performing marriages and honoraria for delivering speeches. Help filling out 1040x Form 4029. Help filling out 1040x   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. Help filling out 1040x However, amounts you received as a self-employed individual do not count as earned income. Help filling out 1040x Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. Help filling out 1040x Disability Benefits If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Help filling out 1040x Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. Help filling out 1040x You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. Help filling out 1040x Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Help filling out 1040x Report taxable pension payments on Form 1040, lines 16a and 16b, or Form 1040A, lines 12a and 12b. Help filling out 1040x Disability insurance payments. Help filling out 1040x   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. Help filling out 1040x It does not matter whether you have reached minimum retirement age. Help filling out 1040x If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. Help filling out 1040x ” Income That Is Not Earned Income Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. Help filling out 1040x Do not include any of these items in your earned income. Help filling out 1040x Earnings while an inmate. Help filling out 1040x   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. Help filling out 1040x This includes amounts for work performed while in a work release program or while in a halfway house. Help filling out 1040x Workfare payments. Help filling out 1040x   Nontaxable workfare payments are not earned income for the EIC. Help filling out 1040x These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if sufficient private sector employment is not available, or (2) community service program activities. Help filling out 1040x Community property. Help filling out 1040x   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under those laws. Help filling out 1040x That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. Help filling out 1040x Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. Help filling out 1040x Nevada, Washington, and California domestic partners. Help filling out 1040x   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. Help filling out 1040x Your earned income for the EIC does not include any amount earned by your partner. Help filling out 1040x Your earned income includes the entire amount you earned. Help filling out 1040x For details, see Publication 555. Help filling out 1040x Conservation Reserve Program (CRP) payments. Help filling out 1040x   If you were receiving social security retirement benefits or social security disability benefits at the time you received any CRP payments, your CRP payments are not earned income for the EIC. Help filling out 1040x Nontaxable military pay. Help filling out 1040x   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. Help filling out 1040x Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). Help filling out 1040x See Publication 3, Armed Forces' Tax Guide, for more information. Help filling out 1040x    Combat pay. Help filling out 1040x You can elect to include your nontaxable combat pay in earned income for the EIC. Help filling out 1040x See Nontaxable combat pay in chapter 4. Help filling out 1040x Chapter 2—Rules If You Have a Qualifying Child If you have met all the rules in chapter 1, use this chapter to see if you have a qualifying child. Help filling out 1040x This chapter discusses Rules 8 through 10. Help filling out 1040x You must meet all three of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned income credit with a qualifying child. Help filling out 1040x You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. Help filling out 1040x (You cannot file Form 1040EZ. Help filling out 1040x ) You also must complete Schedule EIC and attach it to your return. Help filling out 1040x If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find out what to do next. Help filling out 1040x No qualifying child. Help filling out 1040x   If you do not meet Rule 8, you do not have a qualifying child. Help filling out 1040x Read chapter 3 to find out if you can get the earned income credit without a qualifying child. Help filling out 1040x Rule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. Help filling out 1040x The fours tests are: Relationship, Age, Residency, and Joint return. Help filling out 1040x The four tests are illustrated in Figure 1. Help filling out 1040x The paragraphs that follow contain more information about each test. Help filling out 1040x Relationship Test To be your qualifying child, a child must be your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), or Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew). Help filling out 1040x The following definitions clarify the relationship test. Help filling out 1040x Adopted child. Help filling out 1040x   An adopted child is always treated as your own child. Help filling out 1040x The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Help filling out 1040x Foster child. Help filling out 1040x   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Help filling out 1040x (An authorized placement agency includes a state or local government agency. Help filling out 1040x It also includes a tax-exempt organization licensed by a state. Help filling out 1040x In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. Help filling out 1040x ) Example. Help filling out 1040x Debbie, who is 12 years old, was placed in your care 2 years ago by an authorized agency responsible for placing children in foster homes. Help filling out 1040x Debbie is your foster child. Help filling out 1040x Figure 1. Help filling out 1040x Tests for Qualifying Child Please click here for the text description of the image. Help filling out 1040x Conditions for Qualifying Child Age Test Your child must be: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a student, and younger than you (or your spouse, if filing jointly, or Permanently and totally disabled at any time during 2013, regardless of age. Help filling out 1040x The following examples and definitions clarify the age test. Help filling out 1040x Example 1—child not under age 19. Help filling out 1040x Your son turned 19 on December 10. Help filling out 1040x Unless he was permanently and totally disabled or a student, he is not a qualifying child because, at the end of the year, he was not under age 19. Help filling out 1040x Example 2—child not younger than you or your spouse. Help filling out 1040x Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. Help filling out 1040x He is not disabled. Help filling out 1040x Both you and your spouse are 21 years old, and you file a joint return. Help filling out 1040x Your brother is not your qualifying child because he is not younger than you or your spouse. Help filling out 1040x Example 3—child younger than your spouse but not younger than you. Help filling out 1040x The facts are the same as in Example 2 except that your spouse is 25 years old. Help filling out 1040x Because your brother is younger than your spouse, he is your qualifying child, even though he is not younger than you. Help filling out 1040x Student defined. Help filling out 1040x   To qualify as a student, your child must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regular student body at the school, or A student taking a full-time, on-farm training course given by a school described in (1), or a state, county, or local government. Help filling out 1040x   The 5 calendar months need not be consecutive. Help filling out 1040x   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. Help filling out 1040x School defined. Help filling out 1040x   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Help filling out 1040x However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. Help filling out 1040x Vocational high school students. Help filling out 1040x   Students who work in co-op jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. Help filling out 1040x Permanently and totally disabled. Help filling out 1040x   Your child is permanently and totally disabled if both of the following apply. Help filling out 1040x He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Help filling out 1040x A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Help filling out 1040x Residency Test Your child must have lived with you in the United States for more than half of 2013. Help filling out 1040x The following definitions clarify the residency test. Help filling out 1040x United States. Help filling out 1040x   This means the 50 states and the District of Columbia. Help filling out 1040x It does not include Puerto Rico or U. Help filling out 1040x S. Help filling out 1040x possessions such as Guam. Help filling out 1040x Homeless shelter. Help filling out 1040x   Your home can be any location where you regularly live. Help filling out 1040x You do not need a traditional home. Help filling out 1040x For example, if your child lived with you for more than half the year in one or more homeless shelters, your child meets the residency test. Help filling out 1040x Military personnel stationed outside the United States. Help filling out 1040x   U. Help filling out 1040x S. Help filling out 1040x military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. Help filling out 1040x Extended active duty. Help filling out 1040x   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Help filling out 1040x Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. Help filling out 1040x Birth or death of child. Help filling out 1040x    child who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the child's home for more than half the time he or she was alive in 2013. Help filling out 1040x Temporary absences. Help filling out 1040x   Count time that you or your child is away from home on a temporary absence due to a special circumstance as time the child lived with you. Help filling out 1040x Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. Help filling out 1040x Kidnapped child. Help filling out 1040x   A kidnapped child is treated as living with you for more than half of the year if the child lived with you for more than half the part of the year before the date of the kidnapping. Help filling out 1040x The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family. Help filling out 1040x This treatment applies for all years until the child is returned. Help filling out 1040x However, the last year this treatment can apply is the earlier of: The year there is a determination that the child is dead, or The year the child would have reached age 18. Help filling out 1040x   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. Help filling out 1040x Joint Return Test To meet this test, the child cannot file a joint return for the year. Help filling out 1040x Exception. Help filling out 1040x   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. Help filling out 1040x Example 1—child files joint return. Help filling out 1040x You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Help filling out 1040x He earned $25,000 for the year. Help filling out 1040x The couple files a joint return. Help filling out 1040x Because your daughter and her husband file a joint return, she is not your qualifying child. Help filling out 1040x Example 2—child files joint return to get refund of tax withheld. Help filling out 1040x Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Help filling out 1040x They do not have a child. Help filling out 1040x Neither is required to file a tax return. Help filling out 1040x Taxes were taken out of their pay, so they file a joint return only to get a refund of the withheld taxes. Help filling out 1040x The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Help filling out 1040x Example 3—child files joint return to claim American opportunity credit. Help filling out 1040x The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Help filling out 1040x He and his wife are not required to file a tax return, but they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Help filling out 1040x Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to claim a refund of income tax withheld or estimated tax paid. Help filling out 1040x The exception to the joint return test does not apply, so your son is not your qualifying child. Help filling out 1040x Married child. Help filling out 1040x   Even if your child does not file a joint return, if your child was married at the end of the year, he or she cannot be your qualifying child unless: You can claim an exemption for the child, or The reason you cannot claim an exemption for the child is that you let the child's other parent claim the exemption under the Special rule for divorced or separated parents (or parents who live apart) described later. Help filling out 1040x    Social security number. Help filling out 1040x Your qualifying child must have a valid social security number (SSN), unless the child was born and died in 2013 and you attach to your return a copy of the child's birth certificate, death certificate, or hospital records showing a live birth. Help filling out 1040x You cannot claim the EIC on the basis of a qualifying child if: The qualifying child's SSN is missing from your tax return or is incorrect, The qualifying child's social security card says “Not valid for employment” and was issued for use in getting a federally funded benefit, or Instead of an SSN, the qualifying child has: An individual taxpayer identification number (ITIN), which is issued to a noncitizen who cannot get an SSN, or An adoption taxpayer identification number (ATIN), issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. Help filling out 1040x   If you have more than one qualifying child and only one has a valid SSN, you can use only that child to claim the EIC. Help filling out 1040x For more information about SSNs, see Rule 2. Help filling out 1040x Rule 9—Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC Sometimes a child meets the tests to be a qualifying child of more than one person. Help filling out 1040x However, only one of these persons can actually treat the child as a qualifying child. Help filling out 1040x Only that person can use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). Help filling out 1040x The exemption for the child. Help filling out 1040x The child tax credit. Help filling out 1040x Head of household filing status. Help filling out 1040x The credit for child and dependent care expenses. Help filling out 1040x The exclusion for dependent care benefits. Help filling out 1040x The EIC. Help filling out 1040x The other person cannot take any of these benefits based on this qualifying child. Help filling out 1040x In other words, you and the other person cannot agree to divide these tax benefits between you. Help filling out 1040x The other person cannot take any of these tax benefits unless he or she has a different qualifying child. Help filling out 1040x The tiebreaker rules, which follow, explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. Help filling out 1040x However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. Help filling out 1040x Tiebreaker rules. Help filling out 1040x   To determine which person can treat the child as a qualifying child to claim the six tax benefits just listed, the following tiebreaker rules apply. Help filling out 1040x If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Help filling out 1040x If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. Help filling out 1040x If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. Help filling out 1040x If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. Help filling out 1040x If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. Help filling out 1040x If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. Help filling out 1040x If the child's parents file a joint return with each other, this rule can be applied by treating the parents' total AGI as divided evenly between them. Help filling out 1040x See Example 8. Help filling out 1040x   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. Help filling out 1040x See Examples 1 through 13. Help filling out 1040x   If you cannot claim the EIC because your qualifying child is treated under the tiebreaker rules as the qualifying child of another person for 2013, you may be able to take the EIC using a different qualifying child, but you cannot take the EIC using the rules in chapter 3 for people who do not have a qualifying child. Help filling out 1040x If the other person cannot claim the EIC. Help filling out 1040x   If you and someone else have the same qualifying child but the other person cannot claim the EIC because he or she is not eligible or his or her earned income or AGI is too high, you may be able to treat the child as a qualifying child. Help filling out 1040x See Examples 6 and 7. Help filling out 1040x But you cannot treat the child as a qualifying child to claim the EIC if the other person uses the child to claim any of the other six tax benefits listed earlier in this chapter. Help filling out 1040x Examples. Help filling out 1040x    The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. Help filling out 1040x Example 1—child lived with parent and grandparent. Help filling out 1040x You and your 2-year-old son Jimmy lived with your mother all year. Help filling out 1040x You are 25 years old, unmarried, and your AGI is $9,000. Help filling out 1040x Your only income was $9,000 from a part-time job. Help filling out 1040x Your mother's only income was $20,000 from her job, and her AGI is $20,000. Help filling out 1040x Jimmy's father did not live with you or Jimmy. Help filling out 1040x The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. Help filling out 1040x Jimmy is a qualifying child of both you and your mother because he meets the relationship, age, residency, and joint return tests for both you and your mother. Help filling out 1040x However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier in this chapter for which that person qualifies). Help filling out 1040x He is not a qualifying child of anyone else, including his father. Help filling out 1040x If you do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can treat him as a qualifying child to claim the EIC (and any of the other tax benefits listed earlier for which she qualifies). Help filling out 1040x Example 2—parent has higher AGI than grandparent. Help filling out 1040x The facts are the same as in Example 1 except your AGI is $25,000. Help filling out 1040x Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. Help filling out 1040x Only you can claim him. Help filling out 1040x Example 3—two persons claim same child. Help filling out 1040x The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. Help filling out 1040x In this case, you as the child's parent will be the only one allowed to claim Jimmy as a qualifying child for the EIC and the other tax benefits listed earlier for which you qualify. Help filling out 1040x The IRS will disallow your mother's claim to the EIC and any of the other tax benefits listed earlier unless she has another qualifying child. Help filling out 1040x Example 4—qualifying children split between two persons. Help filling out 1040x The facts are the same as in Example 1 except that you also have two other young children who are qualifying children of both you and your mother. Help filling out 1040x Only one of you can claim each child. Help filling out 1040x However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Help filling out 1040x For example, if you claim one child, your mother can claim the other two. Help filling out 1040x Example 5—taxpayer who is a qualifying child. Help filling out 1040x The facts are the same as in Example 1 except that you are only 18 years old. Help filling out 1040x This means you are a qualifying child of your mother. Help filling out 1040x Because of Rule 10, discussed next, you cannot claim the EIC and cannot claim your son as a qualifying child. Help filling out 1040x Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. Help filling out 1040x If your mother meets all the other requirements for claiming the EIC and you do not claim Jimmy as a qualifying child for any of the other tax benefits listed earlier, your mother can claim both you and Jimmy as qualifying children for the EIC. Help filling out 1040x Example 6—grandparent with too much earned income to claim EIC. Help filling out 1040x The facts are the same as in Example 1 except that your mother earned $50,000 from her job. Help filling out 1040x Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. Help filling out 1040x Example 7—parent with too much earned income to claim EIC. Help filling out 1040x The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. Help filling out 1040x Your earned income is too high for you to claim the EIC. Help filling out 1040x But your mother cannot claim the EIC either, because her AGI is not higher than yours. Help filling out 1040x Example 8—child lived with both parents and grandparent. Help filling out 1040x The facts are the same as in Example 1 except that you and Jimmy's father are married to each other, live with Jimmy and your mother, and have AGI of $30,000 on a joint return. Help filling out 1040x If you and your husband do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can claim him instead. Help filling out 1040x Even though the AGI on your joint return, $30,000, is more than your mother's AGI of $20,000, for this purpose half of the joint AGI can be treated as yours and half as your husband's. Help filling out 1040x In other words, each parent's AGI can be treated as $15,000. Help filling out 1040x Example 9—separated parents. Help filling out 1040x You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. Help filling out 1040x In August and September, Joey lived with you. Help filling out 1040x For the rest of the year, Joey lived with your husband, who is Joey's father. Help filling out 1040x Joey is a qualifying child of both you and your husband because he lived with each of you for more than half the year and because he met the relationship, age, and joint return tests for both of you. Help filling out 1040x At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the Special rule for divorced or separated parents (or parents who live apart) does not apply. Help filling out 1040x You and your husband will file separate returns. Help filling out 1040x Your husband agrees to let you treat Joey as a qualifying child. Help filling out 1040x This means, if your husband does not claim Joey as a qualifying child for any of the tax benefits listed earlier, you can claim him as a qualifying child for any tax benefit listed earlier for which you qualify. Help filling out 1040x However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. Help filling out 1040x See Rule 3. Help filling out 1040x Example 10—separated parents claim same child. Help filling out 1040x The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. Help filling out 1040x In this case, only your husband will be allowed to treat Joey as a qualifying child. Help filling out 1040x This is because, during 2013, the boy lived with him longer than with you. Help filling out 1040x You cannot claim the EIC (either with or without a qualifying child). Help filling out 1040x However, your husband's filing status is married filing separately, so he cannot claim the EIC or the credit for child and dependent care expenses. Help filling out 1040x See Rule 3. Help filling out 1040x Example 11—unmarried parents. Help filling out 1040x You, your 5-year-old son, and your son's father lived together all year. Help filling out 1040x You and your son's father are not married. Help filling out 1040x Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, and joint return tests for both you and his father. Help filling out 1040x Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. Help filling out 1040x Neither of you had any other income. Help filling out 1040x Your son's father agrees to let you treat the child as a qualifying child. Help filling out 1040x This means, if your son's father does not claim your son as a qualifying child for the EIC or any of the other tax benefits listed earlier, you can claim him as a qualifying child for the EIC and any of the other tax benefits listed earlier for which you qualify. Help filling out 1040x Example 12—unmarried parents claim same child. Help filling out 1040x The facts are the same as in Example 11 except that you and your son's father both claim your son as a qualifying child. Help filling out 1040x In this case, only your son's father will be allowed to treat your son as a qualifying child. Help filling out 1040x This is because his AGI, $14,000, is more than your AGI, $12,000. Help filling out 1040x You cannot claim the EIC (either with or without a qualifying child). Help filling out 1040x Example 13—child did not live with a parent. Help filling out 1040x You and your 7-year-old niece, your sister's child, lived with your mother all year. Help filling out 1040x You are 25 years old, and your AGI is $9,300. Help filling out 1040x Your only income was from a part-time job. Help filling out 1040x Your mother's AGI is $15,000. Help filling out 1040x Her only income was from her job. Help filling out 1040x Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Help filling out 1040x Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, and joint return tests for both you and your mother. Help filling out 1040x However, only your mother can treat her as a qualifying child. Help filling out 1040x This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Help filling out 1040x Special rule for divorced or separated parents (or parents who live apart). Help filling out 1040x   A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following statements are true. Help filling out 1040x The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all time during the last 6 months of 2013, whether or not they are or were married. Help filling out 1040x The child received over half of his or her support for the year from the parents. Help filling out 1040x The child is in the custody of one or both parents for more than half of 2013. Help filling out 1040x Either of the following statements is true. Help filling out 1040x The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return. Help filling out 1040x If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Help filling out 1040x A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 provides that the noncustodial parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during 2013. Help filling out 1040x For details, see Publication 501. Help filling out 1040x Also see Applying Rule 9 to divorced or separated parents (or parents who live apart), next. Help filling out 1040x Applying Rule 9 to divorced or separated parents (or parents who live apart). Help filling out 1040x   If a child is treated as the qualifying child of the noncustodial parent under the special rule just described for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. Help filling out 1040x However, the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for the EIC and other tax benefits listed earlier in this chapter. Help filling out 1040x If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine which person can treat the child as a qualifying child. Help filling out 1040x Example 1. Help filling out 1040x You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Help filling out 1040x Your AGI is $10,000. Help filling out 1040x Your mother’s AGI is $25,000. Help filling out 1040x Your son's father did not live with you or your son. Help filling out 1040x Under the Special rule for divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child. Help filling out 1040x However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the EIC. Help filling out 1040x You and your mother did not have any child care expenses or dependent care benefits. Help filling out 1040x If you do not claim your son as a qualifying child, your mother can claim him as a qualifying child for the EIC and head of household filing status, if she qualifies for these tax benefits. Help filling out 1040x Example 2. Help filling out 1040x The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. Help filling out 1040x Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Help filling out 1040x Example 3. Help filling out 1040x The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the EIC. Help filling out 1040x Your mother also claims him as a qualifying child for head of household filing status. Help filling out 1040x You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. Help filling out 1040x The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. Help filling out 1040x Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Help filling out 1040x ) if all of the following statements are true. Help filling out 1040x You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Help filling out 1040x Or, you are that person's brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Help filling out 1040x You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Help filling out 1040x You lived with that person in the United States for more than half of the year. Help filling out 1040x You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Help filling out 1040x For more details about the tests to be a qualifying child, see Rule 8. Help filling out 1040x If you are a qualifying child of another taxpayer, you cannot claim the EIC. Help filling out 1040x This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Help filling out 1040x Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). Help filling out 1040x Example. Help filling out 1040x You and your daughter lived with your mother all year. Help filling out 1040x You are 22 years old, unmarried, and attended a trade school full time. Help filling out 1040x You had a part-time job and earned $5,700. Help filling out 1040x You had no other income. Help filling out 1040x Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. Help filling out 1040x She can claim the EIC if she meets all the other requirements. Help filling out 1040x Because you are your mother's qualifying child, you cannot claim the EIC. Help filling out 1040x This is so even if your mother cannot or does not claim the EIC. Help filling out 1040x Child of person not required to file a return. Help filling out 1040x   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you met the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Help filling out 1040x Example 1—return not required. Help filling out 1040x The facts are the same as in the last example except your mother had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Help filling out 1040x As a result, you are not your mother's qualifying child. Help filling out 1040x You can claim the EIC if you meet all the other requirements to do so. Help filling out 1040x Example 2—return filed to get refund of tax withheld. Help filling out 1040x The facts are the same as in Example 1 except your mother had wages of $1,500 and had income tax withheld from her wages. Help filling out 1040x She files a return only to get a refund of the income tax withheld and does not claim the EIC or any other tax credits or deductions. Help filling out 1040x As a result, you are not your mother's qualifying child. Help filling out 1040x You can claim the EIC if you meet all the other requirements to do so. Help filling out 1040x Example 3—return filed to get EIC. Help filling out 1040x The facts are the same as in Example 2 except your mother claimed the EIC on her return. Help filling out 1040x Since she filed the return to get the EIC, she is not filing it only to get a refund of income tax withheld. Help filling out 1040x As a result, you are your mother's qualifying child. Help filling out 1040x You cannot claim the EIC. Help filling out 1040x Chapter 3—Rules If You Do Not Have a Qualifying Child Use this chapter if you do not have a qualifying child and have met all the rules in chapter 1. Help filling out 1040x This chapter discusses Rules 11 through 14. Help filling out 1040x You must meet all four of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned income credit without a qualifying child. Help filling out 1040x You can file Form 1040, Form 1040A, or Form 1040EZ to claim the EIC without a qualifying child. Help filling out 1040x If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find out what to do next. Help filling out 1040x If you have a qualifying child. Help filling out 1040x   If you meet Rule 8, you have a qualifying child. Help filling out 1040x If you meet Rule 8 and do not claim the EIC with a qualifying child, you cannot claim the EIC without a qualifying child. Help filling out 1040x Rule 11—You Must Be at Least Age 25 but Under Age 65 You must be at least age 25 but under age 65 at the end of 2013. Help filling out 1040x If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65 at the end of 2013. Help filling out 1040x It does not matter which spouse meets the age test, as long as one of the spouses does. Help filling out 1040x You meet the age test if you were born after December 31, 1948, and before January 2, 1989. Help filling out 1040x If you are married filing a joint return, you meet the age test if either you or your spouse was born after December 31, 1948, and before January 2, 1989. Help filling out 1040x If neither you nor your spouse meets the age test, you cannot claim the EIC. Help filling out 1040x Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Help filling out 1040x Death of spouse. Help filling out 1040x   If you are filing a joint return with your spouse who died in 2013, you meet the age test if your spouse was at least age 25 but under age 65 at the time of death. Help filling out 1040x Example 1. Help filling out 1040x You are age 28 and unmarried. Help filling out 1040x You meet the age test. Help filling out 1040x Example 2—spouse meets age test. Help filling out 1040x You are married and filing a joint return. Help filling out 1040x You are age 23 and your spouse is age 27. Help filling out 1040x You meet the age test because your spouse is at least age 25 but under age 65. Help filling out 1040x Example 3—spouse dies in 2013. Help filling out 1040x You are married and filing a joint return with your spouse who died in August 2013. Help filling out 1040x You are age 67. Help filling out 1040x Your spouse would have become age 65 in November 2013. Help filling out 1040x Because your spouse was under age 65 when she died, you meet the age test. Help filling out 1040x Rule 12—You Cannot Be the Dependent of Another Person If you are not filing a joint return, you meet this rule if: You checked box 6a on Form 1040 or 1040A, or You did not check the “You” box on line 5 of Form 1040EZ, and you entered $10,000 on that line. Help filling out 1040x If you are filing a joint return, you meet this rule if: You checked both box 6a and box 6b on Form 1040 or 1040A, or You and your spouse did not check either the “You” box or the “Spouse” box on line 5 of Form 1040EZ, and you entered $20,000 on that line. Help filling out 1040x If you are not sure whether someone else can claim you as a dependent, get Publication 501 and read the rules for claiming a dependent. Help filling out 1040x If someone else can claim you as a dependent on his or her return, but does not, you still cannot claim the credit. Help filling out 1040x Example 1. Help filling out 1040x In 2013, you were age 25, single, and living at home with your parents. Help filling out 1040x You worked and were not a student. Help filling out 1040x You earned $7,500. Help filling out 1040x Your parents cannot claim you as a dependent. Help filling out 1040x When you file your return, you claim an exemption for yourself by not checking the You box on line 5 of your Form 1040EZ and by entering $10,000 on that line. Help filling out 1040x You meet this rule. Help filling out 1040x You can claim the EIC if you meet all the other requirements. Help filling out 1040x Example 2. Help filling out 1040x The facts are the same as in Example 1, except that you earned $2,000. Help filling out 1040x Your parents can claim you as a dependent but decide not to. Help filling out 1040x You do not meet this rule. Help filling out 1040x You cannot claim the credit because your parents could have claimed you as a dependent. Help filling out 1040x Joint returns. Help filling out 1040x   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. Help filling out 1040x   However, another person may be able to claim you as a dependent if you and your spouse file a joint return merely to claim a refund of income tax withheld or estimated tax paid. Help filling out 1040x But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. Help filling out 1040x Example 1—return filed to get refund of tax withheld. Help filling out 1040x You are 26 years old. Help filling out 1040x You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. Help filling out 1040x Neither you nor your wife is required to file a tax return. Help filling out 1040x You do not have a child. Help filling out 1040x Taxes were taken out of your pay so you file a joint return only to get a refund of the withheld taxes. Help filling out 1040x Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. Help filling out 1040x They can claim exemptions for you and your wife if all the other tests to do so are met. Help filling out 1040x Example 2—return filed to get EIC. Help filling out 1040x The facts are the same as in Example 1except no taxes were taken out of your pay. Help filling out 1040x Also, you and your wife are not required to file a tax return, but you file a joint return to claim an EIC of $63 and get a refund of that amount. Help filling out 1040x Because claiming the EIC is your reason for filing the return, you are not filing it only to claim a refund of income tax withheld or estimated tax paid. Help filling out 1040x Your parents cannot claim an exemption for either you or your wife. Help filling out 1040x Rule 13—You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Help filling out 1040x ) if all of the following statements are true. Help filling out 1040x You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Help filling out 1040x Or, you are that person's brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Help filling out 1040x You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Help filling out 1040x You lived with that person in the United States for more than half of the year. Help filling out 1040x You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Help filling out 1040x For more details about the tests to be a qualifying child, see Rule 8. Help filling out 1040x If you are a qualifying child of another taxpayer, you cannot claim the EIC. Help filling out 1040x This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Help filling out 1040x Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Help filling out 1040x Example. Help filling out 1040x You lived with your mother all year. Help filling out 1040x You are age 26, unmarried, and permanently and totally disabled. Help filling out 1040x Your only income was from a community center where you went three days a week to answer telephones. Help filling out 1040x You earned $5,000 for the year and provided more than half of your own support. Help filling out 1040x Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. Help filling out 1040x She can claim the EIC if she meets all the other requirements. Help filling out 1040x Because you are a qualifying child of your mother, you cannot claim the EIC. Help filling out 1040x This is so even if your mother cannot or does not claim the EIC. Help filling out 1040x Joint returns. Help filling out 1040x   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. Help filling out 1040x   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return merely to claim a refund of income tax withheld or estimated tax paid. Help filling out 1040x But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. Help filling out 1040x Child of person not required to file a return. Help filling out 1040x   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Help filling out 1040x Example 1—return not required. Help filling out 1040x You lived all year with your father. Help filling out 1040x You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. Help filling out 1040x You have no other income, no children, and provided more than half of your own support. Help filling out 1040x Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Help filling out 1040x As a result, you are not your father's qualifying child. Help filling out 1040x You can claim the EIC if you meet all the other requirements to do so. Help filling out 1040x Example 2—return filed to get refund of tax withheld. Help filling out 1040x The facts are the same as in Example 1 except your father had wages of $1,500 and had income tax withheld from his wages. Help filling out 1040x He files a return only to get a refund of the income tax withheld and does not claim the EIC or any other tax credits or deductions. Help filling out 1040x As a result, you are not your father's qualifying child. Help filling out 1040x You can claim the EIC if you meet all the other requirements to do so. Help filling out 1040x Example 3—return filed to get EIC. Help filling out 1040x The facts are the same as in Example 2 except your father claimed the EIC on his return. Help filling out 1040x Since he filed the return to get the EIC, he is not filing it only to get a refund of income tax withheld. Help filling out 1040x As a result, you are your father's qualifying child. Help filling out 1040x You cannot claim the EIC. Help filling out 1040x Rule 14—You Must Have Lived in the United States More Than Half of the Year Your home (and your spouse's, if filing a joint return) must have been in the United States for more than half the year. Help filling out 1040x If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Help filling out 1040x United States. Help filling out 1040x   This means the 50 states and the District of Columbia. Help filling out 1040x It does not include Puerto Rico or U. Help filling out 1040x S. Help filling out 1040x possessions such as Guam. Help filling out 1040x Homeless shelter. Help filling out 1040x   Your home can be any location where you regularly live. Help filling out 1040x You do not need a traditional home. Help filling out 1040x If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. Help filling out 1040x Military personnel stationed outside the United States. Help filling out 1040x   U. Help filling out 1040x S. Help filling out 1040x military personnel stationed outside the United States on extended active duty (defined in chapter 2) are considered to live in the United States during that duty period for purposes of the EIC. Help filling out 1040x Chapter 4—Figuring and Claiming the EIC You must meet one more rule to claim the EIC. Help filling out 1040x You need to know the amount of your earned income to see if you meet the rule in this chapter. Help filling out 1040x You also need to know that amount to figure your EIC. Help filling out 1040x Rule 15—Earned Income Limits Your earned income must be less than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Help filling out 1040x Earned Income Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Help filling out 1040x Employee pay is earned income only if it is taxable. Help filling out 1040x Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Help filling out 1040x But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Help filling out 1040x Earned income is explained in detail in Rule 7 in chapter 1. Help filling out 1040x Figuring earned income. Help filling out 1040x   If you are self-employed, a statutory employee, or a member of the clergy or a church employee who files Schedule SE (Form 1040), you will figure your earned income when you fill out Part 4 of EIC Worksheet B in the Form 1040 instructions. Help filling out 1040x   Otherwise, figure your earned income by using the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b or the Form 1040A instructions for lines 38a and 38b, or the worksheet in Step 2 of the Form 1040EZ instructions for lines 8a and 8b. Help filling out 1040x   When using one of those worksheets to figure your earned income, you will start with the amount on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). Help filling out 1040x You will then reduce that amount by any amount included on that line and described in the following list. Help filling out 1040x Scholarship or fellowship grants not reported on a Form W-2. Help filling out 1040x A scholarship or fellowship grant that was not reported to you on a Form W-2 is not considered earned income for the earned income credit. Help filling out 1040x Inmate's income. Help filling out 1040x Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. Help filling out 1040x This includes amounts received for work performed while in a work release program or while in a halfway house. Help filling out 1040x If you received any amount for work done while an inmate in a penal institution and that amount is included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “PRI” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Help filling out 1040x Pension or annuity from deferred compensation plans. Help filling out 1040x A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan is not considered earned income for the earned income credit. Help filling out 1040x If you received such an amount and it was included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “DFC” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Help filling out 1040x This amount may be reported in box 11 of your Form W-2. Help filling out 1040x If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or an annuity. Help filling out 1040x Clergy. Help filling out 1040x   If you are a member of the clergy who files Schedule SE and the amount on line 2 of that schedule includes an amount that was also re