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How To Amend My 2011 Tax Return

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How To Amend My 2011 Tax Return

How to amend my 2011 tax return 12. How to amend my 2011 tax return   Other Income Table of Contents Introduction Useful Items - You may want to see: Bartering Canceled DebtsInterest included in canceled debt. How to amend my 2011 tax return Exceptions Host or Hostess Life Insurance ProceedsSurviving spouse. How to amend my 2011 tax return Endowment Contract Proceeds Accelerated Death Benefits Public Safety Officer Killed in the Line of Duty Partnership Income S Corporation Income RecoveriesItemized Deduction Recoveries Rents from Personal Property RepaymentsMethod 1. How to amend my 2011 tax return Method 2. How to amend my 2011 tax return RoyaltiesDepletion. How to amend my 2011 tax return Coal and iron ore. How to amend my 2011 tax return Sale of property interest. How to amend my 2011 tax return Part of future production sold. How to amend my 2011 tax return Unemployment BenefitsTypes of unemployment compensation. How to amend my 2011 tax return Governmental program. How to amend my 2011 tax return Repayment of unemployment compensation. How to amend my 2011 tax return Tax withholding. How to amend my 2011 tax return Repayment of benefits. How to amend my 2011 tax return Welfare and Other Public Assistance Benefits Other IncomeEmotional distress. How to amend my 2011 tax return Deduction for costs involved in unlawful discrimination suits. How to amend my 2011 tax return Energy conservation measure. How to amend my 2011 tax return Dwelling unit. How to amend my 2011 tax return Current income required to be distributed. How to amend my 2011 tax return Current income not required to be distributed. How to amend my 2011 tax return How to report. How to amend my 2011 tax return Losses. How to amend my 2011 tax return Grantor trust. How to amend my 2011 tax return Nonemployee compensation. How to amend my 2011 tax return Corporate director. How to amend my 2011 tax return Personal representatives. How to amend my 2011 tax return Manager of trade or business for bankruptcy estate. How to amend my 2011 tax return Notary public. How to amend my 2011 tax return Election precinct official. How to amend my 2011 tax return Difficulty-of-care payments. How to amend my 2011 tax return Maintaining space in home. How to amend my 2011 tax return Reporting taxable payments. How to amend my 2011 tax return Lotteries and raffles. How to amend my 2011 tax return Form W-2G. How to amend my 2011 tax return Reporting winnings and recordkeeping. How to amend my 2011 tax return Inherited pension or IRA. How to amend my 2011 tax return Employee awards or bonuses. How to amend my 2011 tax return Pulitzer, Nobel, and similar prizes. How to amend my 2011 tax return Payment for services. How to amend my 2011 tax return VA payments. How to amend my 2011 tax return Prizes. How to amend my 2011 tax return Strike and lockout benefits. How to amend my 2011 tax return Introduction You must include on your return all items of income you receive in the form of money, property, and services unless the tax law states that you do not include them. How to amend my 2011 tax return Some items, however, are only partly excluded from income. How to amend my 2011 tax return This chapter discusses many kinds of income and explains whether they are taxable or nontaxable. How to amend my 2011 tax return Income that is taxable must be reported on your tax return and is subject to tax. How to amend my 2011 tax return Income that is nontaxable may have to be shown on your tax return but is not taxable. How to amend my 2011 tax return This chapter begins with discussions of the following income items. How to amend my 2011 tax return Bartering. How to amend my 2011 tax return Canceled debts. How to amend my 2011 tax return Sales parties at which you are the host or hostess. How to amend my 2011 tax return Life insurance proceeds. How to amend my 2011 tax return Partnership income. How to amend my 2011 tax return S Corporation income. How to amend my 2011 tax return Recoveries (including state income tax refunds). How to amend my 2011 tax return Rents from personal property. How to amend my 2011 tax return Repayments. How to amend my 2011 tax return Royalties. How to amend my 2011 tax return Unemployment benefits. How to amend my 2011 tax return Welfare and other public assistance benefits. How to amend my 2011 tax return These discussions are followed by brief discussions of other income items. How to amend my 2011 tax return Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 544 Sales and Other Dispositions of Assets 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Bartering Bartering is an exchange of property or services. How to amend my 2011 tax return You must include in your income, at the time received, the fair market value of property or services you receive in bartering. How to amend my 2011 tax return If you exchange services with another person and you both have agreed ahead of time on the value of the services, that value will be accepted as fair market value unless the value can be shown to be otherwise. How to amend my 2011 tax return Generally, you report this income on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. How to amend my 2011 tax return However, if the barter involves an exchange of something other than services, such as in Example 3 below, you may have to use another form or schedule instead. How to amend my 2011 tax return Example 1. How to amend my 2011 tax return You are a self-employed attorney who performs legal services for a client, a small corporation. How to amend my 2011 tax return The corporation gives you shares of its stock as payment for your services. How to amend my 2011 tax return You must include the fair market value of the shares in your income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) in the year you receive them. How to amend my 2011 tax return Example 2. How to amend my 2011 tax return You are self-employed and a member of a barter club. How to amend my 2011 tax return The club uses “credit units” as a means of exchange. How to amend my 2011 tax return It adds credit units to your account for goods or services you provide to members, which you can use to purchase goods or services offered by other members of the barter club. How to amend my 2011 tax return The club subtracts credit units from your account when you receive goods or services from other members. How to amend my 2011 tax return You must include in your income the value of the credit units that are added to your account, even though you may not actually receive goods or services from other members until a later tax year. How to amend my 2011 tax return Example 3. How to amend my 2011 tax return You own a small apartment building. How to amend my 2011 tax return In return for 6 months rent-free use of an apartment, an artist gives you a work of art she created. How to amend my 2011 tax return You must report as rental income on Schedule E (Form 1040), Supplemental Income and Loss, the fair market value of the artwork, and the artist must report as income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) the fair rental value of the apartment. How to amend my 2011 tax return Form 1099-B from barter exchange. How to amend my 2011 tax return   If you exchanged property or services through a barter exchange, Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or a similar statement from the barter exchange should be sent to you by February 18, 2014. How to amend my 2011 tax return It should show the value of cash, property, services, credits, or scrip you received from exchanges during 2013. How to amend my 2011 tax return The IRS also will receive a copy of Form 1099-B. How to amend my 2011 tax return Canceled Debts In most cases, if a debt you owe is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your income. How to amend my 2011 tax return You have no income from the canceled debt if it is intended as a gift to you. How to amend my 2011 tax return A debt includes any indebtedness for which you are liable or which attaches to property you hold. How to amend my 2011 tax return If the debt is a nonbusiness debt, report the canceled amount on Form 1040, line 21. How to amend my 2011 tax return If it is a business debt, report the amount on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) (or on Schedule F (Form 1040), Profit or Loss From Farming, if the debt is farm debt and you are a farmer). How to amend my 2011 tax return Form 1099-C. How to amend my 2011 tax return   If a Federal Government agency, financial institution, or credit union cancels or forgives a debt you owe of $600 or more, you will receive a Form 1099-C, Cancellation of Debt. How to amend my 2011 tax return The amount of the canceled debt is shown in box 2. How to amend my 2011 tax return Interest included in canceled debt. How to amend my 2011 tax return   If any interest is forgiven and included in the amount of canceled debt in box 2, the amount of interest also will be shown in box 3. How to amend my 2011 tax return Whether or not you must include the interest portion of the canceled debt in your income depends on whether the interest would be deductible when you paid it. How to amend my 2011 tax return See Deductible debt under Exceptions, later. How to amend my 2011 tax return   If the interest would not be deductible (such as interest on a personal loan), include in your income the amount from Form 1099-C, box 2. How to amend my 2011 tax return If the interest would be deductible (such as on a business loan), include in your income the net amount of the canceled debt (the amount shown in box 2 less the interest amount shown in box 3). How to amend my 2011 tax return Discounted mortgage loan. How to amend my 2011 tax return   If your financial institution offers a discount for the early payment of your mortgage loan, the amount of the discount is canceled debt. How to amend my 2011 tax return You must include the canceled amount in your income. How to amend my 2011 tax return Mortgage relief upon sale or other disposition. How to amend my 2011 tax return   If you are personally liable for a mortgage (recourse debt), and you are relieved of the mortgage when you dispose of the property, you may realize gain or loss up to the fair market value of the property. How to amend my 2011 tax return To the extent the mortgage discharge exceeds the fair market value of the property, it is income from discharge of indebtedness unless it qualifies for exclusion under Excluded debt , later. How to amend my 2011 tax return Report any income from discharge of indebtedness on nonbusiness debt that does not qualify for exclusion as other income on Form 1040, line 21. How to amend my 2011 tax return    You may be able to exclude part of the mortgage relief on your principal residence. How to amend my 2011 tax return See Excluded debt, later. How to amend my 2011 tax return   If you are not personally liable for a mortgage (nonrecourse debt), and you are relieved of the mortgage when you dispose of the property (such as through foreclosure), that relief is included in the amount you realize. How to amend my 2011 tax return You may have a taxable gain if the amount you realize exceeds your adjusted basis in the property. How to amend my 2011 tax return Report any gain on nonbusiness property as a capital gain. How to amend my 2011 tax return   See Publication 4681 for more information. How to amend my 2011 tax return Stockholder debt. How to amend my 2011 tax return   If you are a stockholder in a corporation and the corporation cancels or forgives your debt to it, the canceled debt is a constructive distribution that is generally dividend income to you. How to amend my 2011 tax return For more information, see Publication 542, Corporations. How to amend my 2011 tax return   If you are a stockholder in a corporation and you cancel a debt owed to you by the corporation, you generally do not realize income. How to amend my 2011 tax return This is because the canceled debt is considered as a contribution to the capital of the corporation equal to the amount of debt principal that you canceled. How to amend my 2011 tax return Repayment of canceled debt. How to amend my 2011 tax return   If you included a canceled amount in your income and later pay the debt, you may be able to file a claim for refund for the year the amount was included in income. How to amend my 2011 tax return You can file a claim on Form 1040X if the statute of limitations for filing a claim is still open. How to amend my 2011 tax return The statute of limitations generally does not end until 3 years after the due date of your original return. How to amend my 2011 tax return Exceptions There are several exceptions to the inclusion of canceled debt in income. How to amend my 2011 tax return These are explained next. How to amend my 2011 tax return Student loans. How to amend my 2011 tax return   Certain student loans contain a provision that all or part of the debt incurred to attend the qualified educational institution will be canceled if you work for a certain period of time in certain professions for any of a broad class of employers. How to amend my 2011 tax return   You do not have income if your student loan is canceled after you agreed to this provision and then performed the services required. How to amend my 2011 tax return To qualify, the loan must have been made by: The Federal Government, a state or local government, or an instrumentality, agency, or subdivision thereof, A tax-exempt public benefit corporation that has assumed control of a state, county, or municipal hospital, and whose employees are considered public employees under state law, or An educational institution: Under an agreement with an entity described in (1) or (2) that provided the funds to the institution to make the loan, or As part of a program of the institution designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs and under which the services provided by the students (or former students) are for or under the direction of a governmental unit or a tax-exempt organization described in section 501(c)(3). How to amend my 2011 tax return   A loan to refinance a qualified student loan also will qualify if it was made by an educational institution or a qualified tax-exempt organization under its program designed as described in (3)(b) above. How to amend my 2011 tax return Education loan repayment assistance. How to amend my 2011 tax return   Education loan repayments made to you by the National Health Service Corps Loan Repayment Program (NHSC Loan Repayment Program), a state education loan repayment program eligible for funds under the Public Health Service Act, or any other state loan repayment or loan forgiveness program that is intended to provide for the increased availability of health services in underserved or health professional shortage areas are not taxable. How to amend my 2011 tax return    The provision relating to the “other state loan repayment or loan forgiveness program” was added to this exclusion for amounts received in tax years beginning after December 31, 2008. How to amend my 2011 tax return If you included these amounts in income in 2010, 2011, or 2012, you should file an amended tax return to exclude this income. How to amend my 2011 tax return See Form 1040X and its instructions for details on filing. How to amend my 2011 tax return Deductible debt. How to amend my 2011 tax return   You do not have income from the cancellation of a debt if your payment of the debt would be deductible. How to amend my 2011 tax return This exception applies only if you use the cash method of accounting. How to amend my 2011 tax return For more information, see chapter 5 of Publication 334, Tax Guide for Small Business. How to amend my 2011 tax return Price reduced after purchase. How to amend my 2011 tax return   In most cases, if the seller reduces the amount of debt you owe for property you purchased, you do not have income from the reduction. How to amend my 2011 tax return The reduction of the debt is treated as a purchase price adjustment and reduces your basis in the property. How to amend my 2011 tax return Excluded debt. How to amend my 2011 tax return   Do not include a canceled debt in your gross income in the following situations. How to amend my 2011 tax return The debt is canceled in a bankruptcy case under title 11 of the U. How to amend my 2011 tax return S. How to amend my 2011 tax return Code. How to amend my 2011 tax return See Publication 908, Bankruptcy Tax Guide. How to amend my 2011 tax return The debt is canceled when you are insolvent. How to amend my 2011 tax return However, you cannot exclude any amount of canceled debt that is more than the amount by which you are insolvent. How to amend my 2011 tax return See Publication 908. How to amend my 2011 tax return The debt is qualified farm debt and is canceled by a qualified person. How to amend my 2011 tax return See chapter 3 of Publication 225, Farmer's Tax Guide. How to amend my 2011 tax return The debt is qualified real property business debt. How to amend my 2011 tax return See chapter 5 of Publication 334. How to amend my 2011 tax return The cancellation is intended as a gift. How to amend my 2011 tax return The debt is qualified principal residence indebtedness. How to amend my 2011 tax return See Publication 525 for additional information. How to amend my 2011 tax return Host or Hostess If you host a party or event at which sales are made, any gift or gratuity you receive for giving the event is a payment for helping a direct seller make sales. How to amend my 2011 tax return You must report this item as income at its fair market value. How to amend my 2011 tax return Your out-of-pocket party expenses are subject to the 50% limit for meal and entertainment expenses. How to amend my 2011 tax return These expenses are deductible as miscellaneous itemized deductions subject to the 2%-of-AGI limit on Schedule A (Form 1040), but only up to the amount of income you receive for giving the party. How to amend my 2011 tax return For more information about the 50% limit for meal and entertainment expenses, see chapter 26. How to amend my 2011 tax return Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. How to amend my 2011 tax return This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. How to amend my 2011 tax return However, interest income received as a result of life insurance proceeds may be taxable. How to amend my 2011 tax return Proceeds not received in installments. How to amend my 2011 tax return   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. How to amend my 2011 tax return If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. How to amend my 2011 tax return Proceeds received in installments. How to amend my 2011 tax return   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. How to amend my 2011 tax return   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. How to amend my 2011 tax return Include anything over this excluded part in your income as interest. How to amend my 2011 tax return Surviving spouse. How to amend my 2011 tax return   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude up to $1,000 a year of the interest included in the installments. How to amend my 2011 tax return If you remarry, you can continue to take the exclusion. How to amend my 2011 tax return Surrender of policy for cash. How to amend my 2011 tax return   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. How to amend my 2011 tax return In most cases, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. How to amend my 2011 tax return    You should receive a Form 1099-R showing the total proceeds and the taxable part. How to amend my 2011 tax return Report these amounts on lines 16a and 16b of Form 1040 or lines 12a and 12b of Form 1040A. How to amend my 2011 tax return More information. How to amend my 2011 tax return   For more information, see Life Insurance Proceeds in Publication 525. How to amend my 2011 tax return Endowment Contract Proceeds An endowment contract is a policy under which you are paid a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. How to amend my 2011 tax return Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. How to amend my 2011 tax return To determine your cost, subtract any amount that you previously received under the contract and excluded from your income from the total premiums (or other consideration) paid for the contract. How to amend my 2011 tax return Include the part of the lump sum payment that is more than your cost in your income. How to amend my 2011 tax return Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are excluded from income if the insured is terminally or chronically ill. How to amend my 2011 tax return Viatical settlement. How to amend my 2011 tax return   This is the sale or assignment of any part of the death benefit under a life insurance contract to a viatical settlement provider. How to amend my 2011 tax return A viatical settlement provider is a person who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill and who meets the requirements of section 101(g)(2)(B) of the Internal Revenue Code. How to amend my 2011 tax return Exclusion for terminal illness. How to amend my 2011 tax return    Accelerated death benefits are fully excludable if the insured is a terminally ill individual. How to amend my 2011 tax return This is a person who has been certified by a physician as having an illness or physical condition that can reasonably be expected to result in death within 24 months from the date of the certification. How to amend my 2011 tax return Exclusion for chronic illness. How to amend my 2011 tax return    If the insured is a chronically ill individual who is not terminally ill, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. How to amend my 2011 tax return Accelerated death benefits paid on a per diem or other periodic basis are excludable up to a limit. How to amend my 2011 tax return This limit applies to the total of the accelerated death benefits and any periodic payments received from long-term care insurance contracts. How to amend my 2011 tax return For information on the limit and the definitions of chronically ill individual, qualified long-term care services, and long-term care insurance contracts, see Long-Term Care Insurance Contracts under Sickness and Injury Benefits in Publication 525. How to amend my 2011 tax return Exception. How to amend my 2011 tax return   The exclusion does not apply to any amount paid to a person (other than the insured) who has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the person, or Has a financial interest in the person's business. How to amend my 2011 tax return Form 8853. How to amend my 2011 tax return   To claim an exclusion for accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. How to amend my 2011 tax return You do not have to file Form 8853 to exclude accelerated death benefits paid on the basis of actual expenses incurred. How to amend my 2011 tax return Public Safety Officer Killed in the Line of Duty If you are a survivor of a public safety officer who was killed in the line of duty, you may be able to exclude from income certain amounts you receive. How to amend my 2011 tax return For this purpose, the term public safety officer includes law enforcement officers, firefighters, chaplains, and rescue squad and ambulance crew members. How to amend my 2011 tax return For more information, see Publication 559, Survivors, Executors, and Administrators. How to amend my 2011 tax return Partnership Income A partnership generally is not a taxable entity. How to amend my 2011 tax return The income, gains, losses, deductions, and credits of a partnership are passed through to the partners based on each partner's distributive share of these items. How to amend my 2011 tax return Schedule K-1 (Form 1065). How to amend my 2011 tax return    Although a partnership generally pays no tax, it must file an information return on Form 1065, U. How to amend my 2011 tax return S. How to amend my 2011 tax return Return of Partnership Income, and send Schedule K-1 (Form 1065) to each partner. How to amend my 2011 tax return In addition, the partnership will send each partner a copy of the Partner's Instructions for Schedule K-1 (Form 1065) to help each partner report his or her share of the partnership's income, deductions, credits, and tax preference items. How to amend my 2011 tax return Keep Schedule K-1 (Form 1065) for your records. How to amend my 2011 tax return Do not attach it to your Form 1040, unless you are specifically required to do so. How to amend my 2011 tax return For more information on partnerships, see Publication 541, Partnerships. How to amend my 2011 tax return Qualified joint venture. How to amend my 2011 tax return   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. How to amend my 2011 tax return To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. How to amend my 2011 tax return For further information on how to make the election and which schedule(s) to file, see the instructions for your individual tax return. How to amend my 2011 tax return S Corporation Income In most cases, an S corporation does not pay tax on its income. How to amend my 2011 tax return Instead, the income, losses, deductions, and credits of the corporation are passed through to the shareholders based on each shareholder's pro rata share. How to amend my 2011 tax return Schedule K-1 (Form 1120S). How to amend my 2011 tax return   An S corporation must file a return on Form 1120S, U. How to amend my 2011 tax return S. How to amend my 2011 tax return Income Tax Return for an S Corporation, and send Schedule K-1 (Form 1120S) to each shareholder. How to amend my 2011 tax return In addition, the S corporation will send each shareholder a copy of the Shareholder's Instructions for Schedule K-1 (Form 1120S) to help each shareholder report his or her share of the S corporation's income, losses, credits, and deductions. How to amend my 2011 tax return Keep Schedule K-1 (Form 1120S) for your records. How to amend my 2011 tax return Do not attach it to your Form 1040, unless you are specifically required to do so. How to amend my 2011 tax return For more information on S corporations and their shareholders, see the Instructions for Form 1120S. How to amend my 2011 tax return Recoveries A recovery is a return of an amount you deducted or took a credit for in an earlier year. How to amend my 2011 tax return The most common recoveries are refunds, reimbursements, and rebates of deductions itemized on Schedule A (Form 1040). How to amend my 2011 tax return You also may have recoveries of non-itemized deductions (such as payments on previously deducted bad debts) and recoveries of items for which you previously claimed a tax credit. How to amend my 2011 tax return Tax benefit rule. How to amend my 2011 tax return   You must include a recovery in your income in the year you receive it up to the amount by which the deduction or credit you took for the recovered amount reduced your tax in the earlier year. How to amend my 2011 tax return For this purpose, any increase to an amount carried over to the current year that resulted from the deduction or credit is considered to have reduced your tax in the earlier year. How to amend my 2011 tax return For more information, see Publication 525. How to amend my 2011 tax return Federal income tax refund. How to amend my 2011 tax return   Refunds of federal income taxes are not included in your income because they are never allowed as a deduction from income. How to amend my 2011 tax return State tax refund. How to amend my 2011 tax return   If you received a state or local income tax refund (or credit or offset) in 2013, you generally must include it in income if you deducted the tax in an earlier year. How to amend my 2011 tax return The payer should send Form 1099-G, Certain Government Payments, to you by January 31, 2014. How to amend my 2011 tax return The IRS also will receive a copy of the Form 1099-G. How to amend my 2011 tax return If you file Form 1040, use the State and Local Income Tax Refund Worksheet in the 2013 Form 1040 instructions for line 10 to figure the amount (if any) to include in your income. How to amend my 2011 tax return See Publication 525 for when you must use another worksheet. How to amend my 2011 tax return   If you could choose to deduct for a tax year either: State and local income taxes, or State and local general sales taxes, then the maximum refund that you may have to include in income is limited to the excess of the tax you chose to deduct for that year over the tax you did not choose to deduct for that year. How to amend my 2011 tax return For examples, see Publication 525. How to amend my 2011 tax return Mortgage interest refund. How to amend my 2011 tax return    If you received a refund or credit in 2013 of mortgage interest paid in an earlier year, the amount should be shown in box 3 of your Form 1098, Mortgage Interest Statement. How to amend my 2011 tax return Do not subtract the refund amount from the interest you paid in 2013. How to amend my 2011 tax return You may have to include it in your income under the rules explained in the following discussions. How to amend my 2011 tax return Interest on recovery. How to amend my 2011 tax return   Interest on any of the amounts you recover must be reported as interest income in the year received. How to amend my 2011 tax return For example, report any interest you received on state or local income tax refunds on Form 1040, line 8a. How to amend my 2011 tax return Recovery and expense in same year. How to amend my 2011 tax return   If the refund or other recovery and the expense occur in the same year, the recovery reduces the deduction or credit and is not reported as income. How to amend my 2011 tax return Recovery for 2 or more years. How to amend my 2011 tax return   If you receive a refund or other recovery that is for amounts you paid in 2 or more separate years, you must allocate, on a pro rata basis, the recovered amount between the years in which you paid it. How to amend my 2011 tax return This allocation is necessary to determine the amount of recovery from any earlier years and to determine the amount, if any, of your allowable deduction for this item for the current year. How to amend my 2011 tax return For information on how to compute the allocation, see Recoveries in Publication 525. How to amend my 2011 tax return Itemized Deduction Recoveries If you recover any amount that you deducted in an earlier year on Schedule A (Form 1040), you generally must include the full amount of the recovery in your income in the year you receive it. How to amend my 2011 tax return Where to report. How to amend my 2011 tax return   Enter your state or local income tax refund on Form 1040, line 10, and the total of all other recoveries as other income on Form 1040, line 21. How to amend my 2011 tax return You cannot use Form 1040A or Form 1040EZ. How to amend my 2011 tax return Standard deduction limit. How to amend my 2011 tax return   You generally are allowed to claim the standard deduction if you do not itemize your deductions. How to amend my 2011 tax return Only your itemized deductions that are more than your standard deduction are subject to the recovery rule (unless you are required to itemize your deductions). How to amend my 2011 tax return If your total deductions on the earlier year return were not more than your income for that year, include in your income this year the lesser of: Your recoveries, or The amount by which your itemized deductions exceeded the standard deduction. How to amend my 2011 tax return Example. How to amend my 2011 tax return For 2012, you filed a joint return. How to amend my 2011 tax return Your taxable income was $60,000 and you were not entitled to any tax credits. How to amend my 2011 tax return Your standard deduction was $11,900, and you had itemized deductions of $14,000. How to amend my 2011 tax return In 2013, you received the following recoveries for amounts deducted on your 2012 return: Medical expenses $200 State and local income tax refund 400 Refund of mortgage interest 325 Total recoveries $925 None of the recoveries were more than the deductions taken for 2012. How to amend my 2011 tax return The difference between the state and local income tax you deducted and your local general sales tax was more than $400. How to amend my 2011 tax return Your total recoveries are less than the amount by which your itemized deductions exceeded the standard deduction ($14,000 − 11,900 = $2,100), so you must include your total recoveries in your income for 2013. How to amend my 2011 tax return Report the state and local income tax refund of $400 on Form 1040, line 10, and the balance of your recoveries, $525, on Form 1040, line 21. How to amend my 2011 tax return Standard deduction for earlier years. How to amend my 2011 tax return   To determine if amounts recovered in 2013 must be included in your income, you must know the standard deduction for your filing status for the year the deduction was claimed. How to amend my 2011 tax return Look in the instructions for your tax return from prior years to locate the standard deduction for the filing status for that prior year. How to amend my 2011 tax return Example. How to amend my 2011 tax return You filed a joint return on Form 1040 for 2012 with taxable income of $45,000. How to amend my 2011 tax return Your itemized deductions were $12,350. How to amend my 2011 tax return The standard deduction that you could have claimed was $11,900. How to amend my 2011 tax return In 2013, you recovered $2,100 of your 2012 itemized deductions. How to amend my 2011 tax return None of the recoveries were more than the actual deductions for 2012. How to amend my 2011 tax return Include $450 of the recoveries in your 2013 income. How to amend my 2011 tax return This is the smaller of your recoveries ($2,100) or the amount by which your itemized deductions were more than the standard deduction ($12,350 − $11,900 = $450). How to amend my 2011 tax return Recovery limited to deduction. How to amend my 2011 tax return   You do not include in your income any amount of your recovery that is more than the amount you deducted in the earlier year. How to amend my 2011 tax return The amount you include in your income is limited to the smaller of: The amount deducted on Schedule A (Form 1040), or The amount recovered. How to amend my 2011 tax return Example. How to amend my 2011 tax return During 2012 you paid $1,700 for medical expenses. How to amend my 2011 tax return From this amount you subtracted $1,500, which was 7. How to amend my 2011 tax return 5% of your adjusted gross income. How to amend my 2011 tax return Your actual medical expense deduction was $200. How to amend my 2011 tax return In 2013, you received a $500 reimbursement from your medical insurance for your 2012 expenses. How to amend my 2011 tax return The only amount of the $500 reimbursement that must be included in your income for 2013 is $200—the amount actually deducted. How to amend my 2011 tax return Other recoveries. How to amend my 2011 tax return   See Recoveries in Publication 525 if: You have recoveries of items other than itemized deductions, or You received a recovery for an item for which you claimed a tax credit (other than investment credit or foreign tax credit) in a prior year. How to amend my 2011 tax return Rents from Personal Property If you rent out personal property, such as equipment or vehicles, how you report your income and expenses is in most cases determined by: Whether or not the rental activity is a business, and Whether or not the rental activity is conducted for profit. How to amend my 2011 tax return In most cases, if your primary purpose is income or profit and you are involved in the rental activity with continuity and regularity, your rental activity is a business. How to amend my 2011 tax return See Publication 535, Business Expenses, for details on deducting expenses for both business and not-for-profit activities. How to amend my 2011 tax return Reporting business income and expenses. How to amend my 2011 tax return    If you are in the business of renting personal property, report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). How to amend my 2011 tax return The form instructions have information on how to complete them. How to amend my 2011 tax return Reporting nonbusiness income. How to amend my 2011 tax return   If you are not in the business of renting personal property, report your rental income on Form 1040, line 21. How to amend my 2011 tax return List the type and amount of the income on the dotted line next to line 21. How to amend my 2011 tax return Reporting nonbusiness expenses. How to amend my 2011 tax return   If you rent personal property for profit, include your rental expenses in the total amount you enter on Form 1040, line 36. How to amend my 2011 tax return Also enter the amount and “PPR” on the dotted line next to line 36. How to amend my 2011 tax return   If you do not rent personal property for profit, your deductions are limited and you cannot report a loss to offset other income. How to amend my 2011 tax return See Activity not for profit , under Other Income, later. How to amend my 2011 tax return Repayments If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it. How to amend my 2011 tax return Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it. How to amend my 2011 tax return Generally, you can claim a deduction or credit only if the repayment qualifies as an expense or loss incurred in your trade or business or in a for-profit transaction. How to amend my 2011 tax return Type of deduction. How to amend my 2011 tax return   The type of deduction you are allowed in the year of repayment depends on the type of income you included in the earlier year. How to amend my 2011 tax return You generally deduct the repayment on the same form or schedule on which you previously reported it as income. How to amend my 2011 tax return For example, if you reported it as self-employment income, deduct it as a business expense on Schedule C or Schedule C-EZ (Form 1040) or Schedule F (Form 1040). How to amend my 2011 tax return If you reported it as a capital gain, deduct it as a capital loss as explained in the Instructions for Schedule D (Form 1040). How to amend my 2011 tax return If you reported it as wages, unemployment compensation, or other nonbusiness income, deduct it as a miscellaneous itemized deduction on Schedule A (Form 1040). How to amend my 2011 tax return Repaid social security benefits. How to amend my 2011 tax return   If you repaid social security benefits or equivalent railroad retirement benefits, see Repayment of benefits in chapter 11. How to amend my 2011 tax return Repayment of $3,000 or less. How to amend my 2011 tax return   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. How to amend my 2011 tax return If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 23. How to amend my 2011 tax return Repayment over $3,000. How to amend my 2011 tax return   If the amount you repaid was more than $3,000, you can deduct the repayment (as explained under Type of deduction , earlier). How to amend my 2011 tax return However, you can choose instead to take a tax credit for the year of repayment if you included the income under a claim of right. How to amend my 2011 tax return This means that at the time you included the income, it appeared that you had an unrestricted right to it. How to amend my 2011 tax return If you qualify for this choice, figure your tax under both methods and compare the results. How to amend my 2011 tax return Use the method (deduction or credit) that results in less tax. How to amend my 2011 tax return When determining whether the amount you repaid was more or less than $3,000, consider the total amount being repaid on the return. How to amend my 2011 tax return Each instance of repayment is not considered separately. How to amend my 2011 tax return Method 1. How to amend my 2011 tax return   Figure your tax for 2013 claiming a deduction for the repaid amount. How to amend my 2011 tax return If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 28. How to amend my 2011 tax return Method 2. How to amend my 2011 tax return   Figure your tax for 2013 claiming a credit for the repaid amount. How to amend my 2011 tax return Follow these steps. How to amend my 2011 tax return Figure your tax for 2013 without deducting the repaid amount. How to amend my 2011 tax return Refigure your tax from the earlier year without including in income the amount you repaid in 2013. How to amend my 2011 tax return Subtract the tax in (2) from the tax shown on your return for the earlier year. How to amend my 2011 tax return This is the credit. How to amend my 2011 tax return Subtract the answer in (3) from the tax for 2013 figured without the deduction (Step 1). How to amend my 2011 tax return   If method 1 results in less tax, deduct the amount repaid. How to amend my 2011 tax return If method 2 results in less tax, claim the credit figured in (3) above on Form 1040, line 71, by adding the amount of the credit to any other credits on this line, and entering “I. How to amend my 2011 tax return R. How to amend my 2011 tax return C. How to amend my 2011 tax return 1341” in the column to the right of line 71. How to amend my 2011 tax return   An example of this computation can be found in Publication 525. How to amend my 2011 tax return Repaid wages subject to social security and Medicare taxes. How to amend my 2011 tax return   If you had to repay an amount that you included in your wages or compensation in an earlier year on which social security, Medicare, or tier 1 RRTA taxes were paid, ask your employer to refund the excess amount to you. How to amend my 2011 tax return If the employer refuses to refund the taxes, ask for a statement indicating the amount of the overcollection to support your claim. How to amend my 2011 tax return File a claim for refund using Form 843, Claim for Refund and Request for Abatement. How to amend my 2011 tax return Repaid wages subject to Additional Medicare Tax. How to amend my 2011 tax return   Employers cannot make an adjustment or file a claim for refund for Additional Medicare Tax withholding when there is a repayment of wages received by an employee in a prior year because the employee determines liability for Additional Medicare Tax on the employee's income tax return for the prior year. How to amend my 2011 tax return If you had to repay an amount that you included in your wages or compensation in an earlier year, and on which Additional Medicare Tax was paid, you may be able to recover the Additional Medicare Tax paid on the amount. How to amend my 2011 tax return To recover Additional Medicare Tax on the repaid wages or compensation, you must file Form 1040X, Amended U. How to amend my 2011 tax return S. How to amend my 2011 tax return Individual Income Tax Return, for the prior year in which the wages or compensation were originally received. How to amend my 2011 tax return See the Instructions for Form 1040X. How to amend my 2011 tax return Royalties Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. How to amend my 2011 tax return In most cases you report royalties in Part I of Schedule E (Form 1040). How to amend my 2011 tax return However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc. How to amend my 2011 tax return , report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). How to amend my 2011 tax return Copyrights and patents. How to amend my 2011 tax return   Royalties from copyrights on literary, musical, or artistic works, and similar property, or from patents on inventions, are amounts paid to you for the right to use your work over a specified period of time. How to amend my 2011 tax return Royalties generally are based on the number of units sold, such as the number of books, tickets to a performance, or machines sold. How to amend my 2011 tax return Oil, gas, and minerals. How to amend my 2011 tax return   Royalty income from oil, gas, and mineral properties is the amount you receive when natural resources are extracted from your property. How to amend my 2011 tax return The royalties are based on units, such as barrels, tons, etc. How to amend my 2011 tax return , and are paid to you by a person or company who leases the property from you. How to amend my 2011 tax return Depletion. How to amend my 2011 tax return   If you are the owner of an economic interest in mineral deposits or oil and gas wells, you can recover your investment through the depletion allowance. How to amend my 2011 tax return For information on this subject, see chapter 9 of Publication 535. How to amend my 2011 tax return Coal and iron ore. How to amend my 2011 tax return   Under certain circumstances, you can treat amounts you receive from the disposal of coal and iron ore as payments from the sale of a capital asset, rather than as royalty income. How to amend my 2011 tax return For information about gain or loss from the sale of coal and iron ore, see Publication 544. How to amend my 2011 tax return Sale of property interest. How to amend my 2011 tax return   If you sell your complete interest in oil, gas, or mineral rights, the amount you receive is considered payment for the sale of property used in a trade or business under section 1231, not royalty income. How to amend my 2011 tax return Under certain circumstances, the sale is subject to capital gain or loss treatment as explained in the Instructions for Schedule D (Form 1040). How to amend my 2011 tax return For more information on selling section 1231 property, see chapter 3 of Publication 544. How to amend my 2011 tax return   If you retain a royalty, an overriding royalty, or a net profit interest in a mineral property for the life of the property, you have made a lease or a sublease, and any cash you receive for the assignment of other interests in the property is ordinary income subject to a depletion allowance. How to amend my 2011 tax return Part of future production sold. How to amend my 2011 tax return   If you own mineral property but sell part of the future production, in most cases you treat the money you receive from the buyer at the time of the sale as a loan from the buyer. How to amend my 2011 tax return Do not include it in your income or take depletion based on it. How to amend my 2011 tax return   When production begins, you include all the proceeds in your income, deduct all the production expenses, and deduct depletion from that amount to arrive at your taxable income from the property. How to amend my 2011 tax return Unemployment Benefits The tax treatment of unemployment benefits you receive depends on the type of program paying the benefits. How to amend my 2011 tax return Unemployment compensation. How to amend my 2011 tax return   You must include in income all unemployment compensation you receive. How to amend my 2011 tax return You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you. How to amend my 2011 tax return In most cases, you enter unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. How to amend my 2011 tax return Types of unemployment compensation. How to amend my 2011 tax return   Unemployment compensation generally includes any amount received under an unemployment compensation law of the United States or of a state. How to amend my 2011 tax return It includes the following benefits. How to amend my 2011 tax return Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund. How to amend my 2011 tax return State unemployment insurance benefits. How to amend my 2011 tax return Railroad unemployment compensation benefits. How to amend my 2011 tax return Disability payments from a government program paid as a substitute for unemployment compensation. How to amend my 2011 tax return (Amounts received as workers' compensation for injuries or illness are not unemployment compensation. How to amend my 2011 tax return See chapter 5 for more information. How to amend my 2011 tax return ) Trade readjustment allowances under the Trade Act of 1974. How to amend my 2011 tax return Unemployment assistance under the Disaster Relief and Emergency Assistance Act. How to amend my 2011 tax return Unemployment assistance under the Airline Deregulation Act of 1974 Program. How to amend my 2011 tax return Governmental program. How to amend my 2011 tax return   If you contribute to a governmental unemployment compensation program and your contributions are not deductible, amounts you receive under the program are not included as unemployment compensation until you recover your contributions. How to amend my 2011 tax return If you deducted all of your contributions to the program, the entire amount you receive under the program is included in your income. How to amend my 2011 tax return Repayment of unemployment compensation. How to amend my 2011 tax return   If you repaid in 2013 unemployment compensation you received in 2013, subtract the amount you repaid from the total amount you received and enter the difference on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. How to amend my 2011 tax return On the dotted line next to your entry enter “Repaid” and the amount you repaid. How to amend my 2011 tax return If you repaid unemployment compensation in 2013 that you included in income in an earlier year, you can deduct the amount repaid on Schedule A (Form 1040), line 23, if you itemize deductions. How to amend my 2011 tax return If the amount is more than $3,000, see Repayments , earlier. How to amend my 2011 tax return Tax withholding. How to amend my 2011 tax return   You can choose to have federal income tax withheld from your unemployment compensation. How to amend my 2011 tax return To make this choice, complete Form W-4V, Voluntary Withholding Request, and give it to the paying office. How to amend my 2011 tax return Tax will be withheld at 10% of your payment. How to amend my 2011 tax return    If you do not choose to have tax withheld from your unemployment compensation, you may be liable for estimated tax. How to amend my 2011 tax return If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. How to amend my 2011 tax return For more information on estimated tax, see chapter 4. How to amend my 2011 tax return Supplemental unemployment benefits. How to amend my 2011 tax return   Benefits received from an employer-financed fund (to which the employees did not contribute) are not unemployment compensation. How to amend my 2011 tax return They are taxable as wages and are subject to withholding for income tax. How to amend my 2011 tax return They may be subject to social security and Medicare taxes. How to amend my 2011 tax return For more information, see Supplemental Unemployment Benefits in section 5 of Publication 15-A, Employer's Supplemental Tax Guide. How to amend my 2011 tax return Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. How to amend my 2011 tax return Repayment of benefits. How to amend my 2011 tax return   You may have to repay some of your supplemental unemployment benefits to qualify for trade readjustment allowances under the Trade Act of 1974. How to amend my 2011 tax return If you repay supplemental unemployment benefits in the same year you receive them, reduce the total benefits by the amount you repay. How to amend my 2011 tax return If you repay the benefits in a later year, you must include the full amount of the benefits received in your income for the year you received them. How to amend my 2011 tax return   Deduct the repayment in the later year as an adjustment to gross income on Form 1040. How to amend my 2011 tax return (You cannot use Form 1040A or Form 1040EZ. How to amend my 2011 tax return ) Include the repayment on Form 1040, line 36, and enter “Sub-Pay TRA” and the amount on the dotted line next to line 36. How to amend my 2011 tax return If the amount you repay in a later year is more than $3,000, you may be able to take a credit against your tax for the later year instead of deducting the amount repaid. How to amend my 2011 tax return For more information on this, see Repayments , earlier. How to amend my 2011 tax return Private unemployment fund. How to amend my 2011 tax return   Unemployment benefit payments from a private (nonunion) fund to which you voluntarily contribute are taxable only if the amounts you receive are more than your total payments into the fund. How to amend my 2011 tax return Report the taxable amount on Form 1040, line 21. How to amend my 2011 tax return Payments by a union. How to amend my 2011 tax return   Benefits paid to you as an unemployed member of a union from regular union dues are included in your income on Form 1040, line 21. How to amend my 2011 tax return However, if you contribute to a special union fund and your payments to the fund are not deductible, the unemployment benefits you receive from the fund are includible in your income only to the extent they are more than your contributions. How to amend my 2011 tax return Guaranteed annual wage. How to amend my 2011 tax return   Payments you receive from your employer during periods of unemployment, under a union agreement that guarantees you full pay during the year, are taxable as wages. How to amend my 2011 tax return Include them on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. How to amend my 2011 tax return State employees. How to amend my 2011 tax return   Payments similar to a state's unemployment compensation may be made by the state to its employees who are not covered by the state's unemployment compensation law. How to amend my 2011 tax return Although the payments are fully taxable, do not report them as unemployment compensation. How to amend my 2011 tax return Report these payments on Form 1040, line 21. How to amend my 2011 tax return Welfare and Other Public Assistance Benefits Do not include in your income governmental benefit payments from a public welfare fund based upon need, such as payments to blind individuals under a state public assistance law. How to amend my 2011 tax return Payments from a state fund for the victims of crime should not be included in the victims' incomes if they are in the nature of welfare payments. How to amend my 2011 tax return Do not deduct medical expenses that are reimbursed by such a fund. How to amend my 2011 tax return You must include in your income any welfare payments that are compensation for services or that are obtained fraudulently. How to amend my 2011 tax return Reemployment Trade Adjustment Assistance (RTAA) payments. How to amend my 2011 tax return   RTAA payments received from a state must be included in your income. How to amend my 2011 tax return The state must send you Form 1099-G to advise you of the amount you should include in income. How to amend my 2011 tax return The amount should be reported on Form 1040, line 21. How to amend my 2011 tax return Persons with disabilities. How to amend my 2011 tax return   If you have a disability, you must include in income compensation you receive for services you perform unless the compensation is otherwise excluded. How to amend my 2011 tax return However, you do not include in income the value of goods, services, and cash that you receive, not in return for your services, but for your training and rehabilitation because you have a disability. How to amend my 2011 tax return Excludable amounts include payments for transportation and attendant care, such as interpreter services for the deaf, reader services for the blind, and services to help individuals with an intellectual disability do their work. How to amend my 2011 tax return Disaster relief grants. How to amend my 2011 tax return    Do not include post-disaster grants received under the Robert T. How to amend my 2011 tax return Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, child care, or funeral expenses. How to amend my 2011 tax return Do not deduct casualty losses or medical expenses that are specifically reimbursed by these disaster relief grants. How to amend my 2011 tax return If you have deducted a casualty loss for the loss of your personal residence and you later receive a disaster relief grant for the loss of the same residence, you may have to include part or all of the grant in your taxable income. How to amend my 2011 tax return See Recoveries , earlier. How to amend my 2011 tax return Unemployment assistance payments under the Act are taxable unemployment compensation. How to amend my 2011 tax return See Unemployment compensation under Unemployment Benefits, earlier. How to amend my 2011 tax return Disaster relief payments. How to amend my 2011 tax return   You can exclude from income any amount you receive that is a qualified disaster relief payment. How to amend my 2011 tax return A qualified disaster relief payment is an amount paid to you: To reimburse or pay reasonable and necessary personal, family, living, or funeral expenses that result from a qualified disaster; To reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of your home or repair or replacement of its contents to the extent it is due to a qualified disaster; By a person engaged in the furnishing or sale of transportation as a common carrier because of the death or personal physical injuries incurred as a result of a qualified disaster; or By a federal, state, or local government, or agency, or instrumentality in connection with a qualified disaster in order to promote the general welfare. How to amend my 2011 tax return You can exclude this amount only to the extent any expense it pays for is not paid for by insurance or otherwise. How to amend my 2011 tax return The exclusion does not apply if you were a participant or conspirator in a terrorist action or a representative of one. How to amend my 2011 tax return   A qualified disaster is: A disaster which results from a terrorist or military action; A federally declared disaster; or A disaster which results from an accident involving a common carrier, or from any other event, which is determined to be catastrophic by the Secretary of the Treasury or his or her delegate. How to amend my 2011 tax return   For amounts paid under item (4), a disaster is qualified if it is determined by an applicable federal, state, or local authority to warrant assistance from the federal, state, or local government, agency, or instrumentality. How to amend my 2011 tax return Disaster mitigation payments. How to amend my 2011 tax return   You also can exclude from income any amount you receive that is a qualified disaster mitigation payment. How to amend my 2011 tax return Qualified disaster mitigation payments are also most commonly paid to you in the period immediately following damage to property as a result of a natural disaster. How to amend my 2011 tax return However, disaster mitigation payments are used to mitigate (reduce the severity of) potential damage from future natural disasters. How to amend my 2011 tax return They are paid to you through state and local governments based on the provisions of the Robert T. How to amend my 2011 tax return Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act. How to amend my 2011 tax return   You cannot increase the basis or adjusted basis of your property for improvements made with nontaxable disaster mitigation payments. How to amend my 2011 tax return Home Affordable Modification Program (HAMP). How to amend my 2011 tax return   If you benefit from Pay-for-Performance Success Payments under HAMP, the payments are not taxable. How to amend my 2011 tax return Mortgage assistance payments under section 235 of the National Housing Act. How to amend my 2011 tax return   Payments made under section 235 of the National Housing Act for mortgage assistance are not included in the homeowner's income. How to amend my 2011 tax return Interest paid for the homeowner under the mortgage assistance program cannot be deducted. How to amend my 2011 tax return Medicare. How to amend my 2011 tax return   Medicare benefits received under title XVIII of the Social Security Act are not includible in the gross income of the individuals for whom they are paid. How to amend my 2011 tax return This includes basic (part A (Hospital Insurance Benefits for the Aged)) and supplementary (part B (Supplementary Medical Insurance Benefits for the Aged)). How to amend my 2011 tax return Old-age, survivors, and disability insurance benefits (OASDI). How to amend my 2011 tax return   Generally, OASDI payments under section 202 of title II of the Social Security Act are not includible in the gross income of the individuals to whom they are paid. How to amend my 2011 tax return This applies to old-age insurance benefits, and insurance benefits for wives, husbands, children, widows, widowers, mothers and fathers, and parents, as well as the lump-sum death payment. How to amend my 2011 tax return Nutrition Program for the Elderly. How to amend my 2011 tax return    Food benefits you receive under the Nutrition Program for the Elderly are not taxable. How to amend my 2011 tax return If you prepare and serve free meals for the program, include in your income as wages the cash pay you receive, even if you are also eligible for food benefits. How to amend my 2011 tax return Payments to reduce cost of winter energy. How to amend my 2011 tax return   Payments made by a state to qualified people to reduce their cost of winter energy use are not taxable. How to amend my 2011 tax return Other Income The following brief discussions are arranged in alphabetical order. How to amend my 2011 tax return Other income items briefly discussed below are referenced to publications which provide more topical information. How to amend my 2011 tax return Activity not for profit. How to amend my 2011 tax return   You must include on your return income from an activity from which you do not expect to make a profit. How to amend my 2011 tax return An example of this type of activity is a hobby or a farm you operate mostly for recreation and pleasure. How to amend my 2011 tax return Enter this income on Form 1040, line 21. How to amend my 2011 tax return Deductions for expenses related to the activity are limited. How to amend my 2011 tax return They cannot total more than the income you report and can be taken only if you itemize deductions on Schedule A (Form 1040). How to amend my 2011 tax return See Not-for-Profit Activities in chapter 1 of Publication 535 for information on whether an activity is considered carried on for a profit. How to amend my 2011 tax return Alaska Permanent Fund dividend. How to amend my 2011 tax return   If you received a payment from Alaska's mineral income fund (Alaska Permanent Fund dividend), report it as income on line 21 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. How to amend my 2011 tax return The state of Alaska sends each recipient a document that shows the amount of the payment with the check. How to amend my 2011 tax return The amount also is reported to IRS. How to amend my 2011 tax return Alimony. How to amend my 2011 tax return   Include in your income on Form 1040, line 11, any alimony payments you receive. How to amend my 2011 tax return Amounts you receive for child support are not income to you. How to amend my 2011 tax return Alimony and child support payments are discussed in chapter 18. How to amend my 2011 tax return Bribes. How to amend my 2011 tax return   If you receive a bribe, include it in your income. How to amend my 2011 tax return Campaign contributions. How to amend my 2011 tax return   These contributions are not income to a candidate unless they are diverted to his or her personal use. How to amend my 2011 tax return To be exempt from tax, the contributions must be spent for campaign purposes or kept in a fund for use in future campaigns. How to amend my 2011 tax return However, interest earned on bank deposits, dividends received on contributed securities, and net gains realized on sales of contributed securities are taxable and must be reported on Form 1120-POL, U. How to amend my 2011 tax return S. How to amend my 2011 tax return Income Tax Return for Certain Political Organizations. How to amend my 2011 tax return Excess campaign funds transferred to an office account must be included in the officeholder's income on Form 1040, line 21, in the year transferred. How to amend my 2011 tax return Car pools. How to amend my 2011 tax return   Do not include in your income amounts you receive from the passengers for driving a car in a car pool to and from work. How to amend my 2011 tax return These amounts are considered reimbursement for your expenses. How to amend my 2011 tax return However, this rule does not apply if you have developed car pool arrangements into a profit-making business of transporting workers for hire. How to amend my 2011 tax return Cash rebates. How to amend my 2011 tax return   A cash rebate you receive from a dealer or manufacturer of an item you buy is not income, but you must reduce your basis by the amount of the rebate. How to amend my 2011 tax return Example. How to amend my 2011 tax return You buy a new car for $24,000 cash and receive a $2,000 rebate check from the manufacturer. How to amend my 2011 tax return The $2,000 is not income to you. How to amend my 2011 tax return Your basis in the car is $22,000. How to amend my 2011 tax return This is the basis on which you figure gain or loss if you sell the car and depreciation if you use it for business. How to amend my 2011 tax return Casualty insurance and other reimbursements. How to amend my 2011 tax return   You generally should not report these reimbursements on your return unless you are figuring gain or loss from the casualty or theft. How to amend my 2011 tax return See chapter 25 for more information. How to amend my 2011 tax return Child support payments. How to amend my 2011 tax return   You should not report these payments on your return. How to amend my 2011 tax return See chapter 18 for more information. How to amend my 2011 tax return Court awards and damages. How to amend my 2011 tax return   To determine if settlement amounts you receive by compromise or judgment must be included in your income, you must consider the item that the settlement replaces. How to amend my 2011 tax return The character of the income as ordinary income or capital gain depends on the nature of the underlying claim. How to amend my 2011 tax return Include the following as ordinary income. How to amend my 2011 tax return Interest on any award. How to amend my 2011 tax return Compensation for lost wages or lost profits in most cases. How to amend my 2011 tax return Punitive damages, in most cases. How to amend my 2011 tax return It does not matter if they relate to a physical injury or physical sickness. How to amend my 2011 tax return Amounts received in settlement of pension rights (if you did not contribute to the plan). How to amend my 2011 tax return Damages for: Patent or copyright infringement, Breach of contract, or Interference with business operations. How to amend my 2011 tax return Back pay and damages for emotional distress received to satisfy a claim under title VII of the Civil Rights Act of 1964. How to amend my 2011 tax return Attorney fees and costs (including contingent fees) where the underlying recovery is included in gross income. How to amend my 2011 tax return   Do not include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments). How to amend my 2011 tax return Emotional distress. How to amend my 2011 tax return   Emotional distress itself is not a physical injury or physical sickness, but damages you receive for emotional distress due to a physical injury or sickness are treated as received for the physical injury or sickness. How to amend my 2011 tax return Do not include them in your income. How to amend my 2011 tax return   If the emotional distress is due to a personal injury that is not due to a physical injury or sickness (for example, employment discrimination or injury to reputation), you must include the damages in your income, except for any damages you receive for medical care due to that emotional distress. How to amend my 2011 tax return Emotional distress includes physical symptoms that result from emotional distress, such as headaches, insomnia, and stomach disorders. How to amend my 2011 tax return Deduction for costs involved in unlawful discrimination suits. How to amend my 2011 tax return   You may be able to deduct attorney fees and court costs paid to recover a judgment or settlement for a claim of unlawful discrimination under various provisions of federal, state, and local law listed in Internal Revenue Code section 62(e), a claim against the United States government, or a claim under section 1862(b)(3)(A) of the Social Security Act. How to amend my 2011 tax return For more information, see Publication 525. How to amend my 2011 tax return Credit card insurance. How to amend my 2011 tax return   In most cases, if you receive benefits under a credit card disability or unemployment insurance plan, the benefits are taxable to you. How to amend my 2011 tax return These plans make the minimum monthly payment on your credit card account if you cannot make the payment due to injury, illness, disability, or unemployment. How to amend my 2011 tax return Report on Form 1040, line 21, the amount of benefits you received during the year that is more than the amount of the premiums you paid during the year. How to amend my 2011 tax return Down payment assistance. How to amend my 2011 tax return   If you purchase a home and receive assistance from a nonprofit corporation to make the down payment, that assistance is not included in your income. How to amend my 2011 tax return If the corporation qualifies as a tax-exempt charitable organization, the assistance is treated as a gift and is included in your basis of the house. How to amend my 2011 tax return If the corporation does not qualify, the assistance is treated as a rebate or reduction of the purchase price and is not included in your basis. How to amend my 2011 tax return Employment agency fees. How to amend my 2011 tax return   If you get a job through an employment agency, and the fee is paid by your employer, the fee is not includible in your income if you are not liable for it. How to amend my 2011 tax return However, if you pay it and your employer reimburses you for it, it is includible in your income. How to amend my 2011 tax return Energy conservation subsidies. How to amend my 2011 tax return   You can exclude from gross income any subsidy provided, either directly or indirectly, by public utilities for the purchase or installation of an energy conservation measure for a dwelling unit. How to amend my 2011 tax return Energy conservation measure. How to amend my 2011 tax return   This includes installations or modifications that are primarily designed to reduce consumption of electricity or natural gas, or improve the management of energy demand. How to amend my 2011 tax return Dwelling unit. How to amend my 2011 tax return   This includes a house, apartment, condominium, mobile home, boat, or similar property. How to amend my 2011 tax return If a building or structure contains both dwelling and other units, any subsidy must be properly allocated. How to amend my 2011 tax return Estate and trust income. How to amend my 2011 tax return    An estate or trust, unlike a partnership, may have to pay federal income tax. How to amend my 2011 tax return If you are a beneficiary of an estate or trust, you may be taxed on your share of its income distributed or required to be distributed to you. How to amend my 2011 tax return However, there is never a double tax. How to amend my 2011 tax return Estates and trusts file their returns on Form 1041, U. How to amend my 2011 tax return S. How to amend my 2011 tax return Income Tax Return for Estates and Trusts, and your share of the income is reported to you on Schedule K-1 (Form 1041). How to amend my 2011 tax return Current income required to be distributed. How to amend my 2011 tax return   If you are the beneficiary of an estate or trust that must distribute all of its current income, you must report your share of the distributable net income, whether or not you actually received it. How to amend my 2011 tax return Current income not required to be distributed. How to amend my 2011 tax return    If you are the beneficiary of an estate or trust and the fiduciary has the choice of whether to distribute all or part of the current income, you must report: All income that is required to be distributed to you, whether or not it is actually distributed, plus All other amounts actually paid or credited to you, up to the amount of your share of distributable net income. How to amend my 2011 tax return How to report. How to amend my 2011 tax return   Treat each item of income the same way that the estate or trust would treat it. How to amend my 2011 tax return For example, if a trust's dividend income is distributed to you, you report the distribution as dividend income on your return. How to amend my 2011 tax return The same rule applies to distributions of tax-exempt interest and capital gains. How to amend my 2011 tax return   The fiduciary of the estate or trust must tell you the type of items making up your share of the estate or trust income and any credits you are allowed on your individual income tax return. How to amend my 2011 tax return Losses. How to amend my 2011 tax return   Losses of estates and trusts generally are not deductible by the beneficiaries. How to amend my 2011 tax return Grantor trust. How to amend my 2011 tax return   Income earned by a grantor trust is taxable to the grantor, not the beneficiary, if the grantor keeps certain control over the trust. How to amend my 2011 tax return (The grantor is the one who transferred property to the trust. How to amend my 2011 tax return ) This rule applies if the property (or income from the property) put into the trust will or may revert (be returned) to the grantor or the grantor's spouse. How to amend my 2011 tax return   Generally, a trust is a grantor trust if the grantor has a reversionary interest valued (at the date of transfer) at more than 5% of the value of the transferred property. How to amend my 2011 tax return Expenses paid by another. How to amend my 2011 tax return   If your personal expenses are paid for by another person, such as a corporation, the payment may be taxable to you depending upon your relationship with that person and the nature of the payment. How to amend my 2011 tax return But if the payment makes up for a loss caused by that person, and only restores you to the position you were in before the loss, the payment is not includible in your income. How to amend my 2011 tax return Fees for services. How to amend my 2011 tax return   Include all fees for your services in your income. How to amend my 2011 tax return Examples of these fees are amounts you receive for services you perform as: A corporate director, An executor, administrator, or personal representative of an estate, A manager of a trade or business you operated before declaring Chapter 11 bankruptcy, A notary public, or An election precinct official. How to amend my 2011 tax return Nonemployee compensation. How to amend my 2011 tax return   If you are not an employee and the fees for your services from the same payer total $600 or more for the year, you may receive a Form 1099-MISC. How to amend my 2011 tax return You may need to report your fees as self-employment income. How to amend my 2011 tax return See Self-Employed Persons , in chapter 1, for a discussion of when you are considered self-employed. How to amend my 2011 tax return Corporate director. How to amend my 2011 tax return   Corporate director fees are self-employment income. How to amend my 2011 tax return Report these payments on Schedule C or Schedule C-EZ (Form 1040). How to amend my 2011 tax return Personal representatives. How to amend my 2011 tax return   All personal representatives must include in their gross income fees paid to them from an estate. How to amend my 2011 tax return If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on Form 1040, line 21. How to amend my 2011 tax return If you are in the trade or business of being an executor, report these fees as self-employment income on Schedule C or Schedule C-EZ (Form 1040). How to amend my 2011 tax return The fee is not includible in income if it is waived. How to amend my 2011 tax return Manager of trade or business for bankruptcy estate. How to amend my 2011 tax return   Include in your income all payments received from your bankruptcy estate for managing or operating a trade or business that you operated before you filed for bankruptcy. How to amend my 2011 tax return Report this income on Form 1040, line 21. How to amend my 2011 tax return Notary public. How to amend my 2011 tax return    Report payments for these services on Schedule C or Schedule C-EZ (Form 1040). How to amend my 2011 tax return These payments are not subject to self-employment tax. How to amend my 2011 tax return See the separate instructions for Schedule SE (Form 1040) for details. How to amend my 2011 tax return Election precinct official. How to amend my 2011 tax return    You should receive a Form W-2 showing payments for services performed as an election official or election worker. How to amend my 2011 tax return Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. How to amend my 2011 tax return Foster care providers. How to amend my 2011 tax return   Payments you receive from a state, political subdivision, or a qualified foster care placement agency for providing care to qualified foster individuals in your home generally are not included in your income. How to amend my 2011 tax return However, you must include in your income payments received for the care of more than 5 individuals age 19 or older and certain difficulty-of-care payments. How to amend my 2011 tax return   A qualified foster individual is a person who: Is living in a foster family home, and Was placed there by: An agency of a state or one of its political subdivisions, or A qualified foster care placement agency. How to amend my 2011 tax return Difficulty-of-care payments. How to amend my 2011 tax return   These are additional payments that are designated by the payer as compensation for providing the additional care that is required for physically, mentally, or emotionally handicapped qualified foster individuals. How to amend my 2011 tax return A state must determine that the additional compensation is needed, and the care for which the payments are made must be provided in your home. How to amend my 2011 tax return   You must include in your income difficulty-of-care payments received for more than: 10 qualified foster individuals under age 19, or 5 qualified foster individuals age 19 or older. How to amend my 2011 tax return Maintaining space in home. How to amend my 2011 tax return   If you are paid to maintain space in your home for emergency foster care, you must include the payment in your income. How to amend my 2011 tax return Reporting taxable payments. How to amend my 2011 tax return    If you receive payments that you must include in your income, you are in business as a foster care provider and you are self-employed. How to amend my 2011 tax return Report the payments on Schedule C or Schedule C-EZ (Form 1040). How to amend my 2011 tax return See Publication 587, Business Use of Your Home, to help you determine the amount you can deduct for the use of your home. How to amend my 2011 tax return Found property. How to amend my 2011 tax return   If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession. How to amend my 2011 tax return Free tour. How to amend my 2011 tax return   If you received a free tour from a travel agency for organizing a group of tourists, you must include its value in your income. How to amend my 2011 tax return Report the fair market value of the tour on Form 1040, line 21, if you are not in the trade or business of organizing tours. How to amend my 2011 tax return You cannot deduct your expenses in serving as the voluntary leader of the group at the group's request. How to amend my 2011 tax return If you organize tours as a trade or business, report the tour's value on Schedule C or Schedule C-EZ (Form 1040). How to amend my 2011 tax return Gambling winnings. How to amend my 2011 tax return   You must include your gambling winnings in income on Form 1040, line 21. How to amend my 2011 tax return If you itemize your deductions on Schedule A (Form 1040), you can deduct gambling losses you had during the year, but only up to the amount of your winnings. How to amend my 2011 tax return Lotteries and raffles. How to amend my 2011 tax return   Winnings from lotteries and raffles are gambling winnings. How to amend my 2011 tax return In addition to cash winnings, you must include in your income the fair market value of bonds, cars, houses, and other noncash prizes. How to amend my 2011 tax return    If you win a state lottery prize payable in installments, see Publication 525 for more information. How to amend my 2011 tax return Form W-2G. How to amend my 2011 tax return   You may have received a Form W-2G, Certain Gambling Winnings, showing the amount of your gambling winnings and any tax taken out of them. How to amend my 2011 tax return Include the amount from box 1 on Form 1040, line 21. How to amend my 2011 tax return Include the amount shown in box 4 on Form 1040, line 62, as federal income tax withheld. How to amend my 2011 tax return Reporting winnings and recordkeeping. How to amend my 2011 tax return   For more information on reporting gam
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The How To Amend My 2011 Tax Return

How to amend my 2011 tax return Publication 515 - Main Content Table of Contents Withholding of TaxWithholding Agent Withholding and Reporting Obligations Persons Subject to NRA WithholdingIdentifying the Payee Foreign Persons DocumentationBeneficial Owners Foreign Intermediaries and Foreign Flow-Through Entities Standards of Knowledge Presumption Rules Income Subject to NRA WithholdingSource of Income Fixed or Determinable Annual or Periodical Income (FDAP) Withholding on Specific IncomeEffectively Connected Income Income Not Effectively Connected Pay for Personal Services Performed Artists and Athletes (Income Codes 42 and 43) Other Income Foreign Governments and Certain Other Foreign Organizations U. How to amend my 2011 tax return S. How to amend my 2011 tax return Taxpayer Identification NumbersUnexpected payment. How to amend my 2011 tax return Depositing Withheld TaxesWhen Deposits Are Required Adjustment for Overwithholding Returns RequiredJoint owners. How to amend my 2011 tax return Electronic reporting. How to amend my 2011 tax return Partnership Withholding on Effectively Connected IncomeWho Must Withhold Foreign Partner Publicly Traded Partnerships U. How to amend my 2011 tax return S. How to amend my 2011 tax return Real Property InterestForeign corporations. How to amend my 2011 tax return Domestic corporations. How to amend my 2011 tax return U. How to amend my 2011 tax return S. How to amend my 2011 tax return real property holding corporations. How to amend my 2011 tax return Partnerships. How to amend my 2011 tax return Trusts and estates. How to amend my 2011 tax return Domestically controlled QIE. How to amend my 2011 tax return Late filing of certifications or notices. How to amend my 2011 tax return Certifications. How to amend my 2011 tax return Liability of agent or qualified substitute. How to amend my 2011 tax return Reporting and Paying the Tax Withholding Certificates Tax Treaty TablesTable 1 Table 2 Table 3 How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). How to amend my 2011 tax return Withholding of Tax In most cases, a foreign person is subject to U. How to amend my 2011 tax return S. How to amend my 2011 tax return tax on its U. How to amend my 2011 tax return S. How to amend my 2011 tax return source income. How to amend my 2011 tax return Most types of U. How to amend my 2011 tax return S. How to amend my 2011 tax return source income received by a foreign person are subject to U. How to amend my 2011 tax return S. How to amend my 2011 tax return tax of 30%. How to amend my 2011 tax return A reduced rate, including exemption, may apply if there is a tax treaty between the foreign person's country of residence and the United States. How to amend my 2011 tax return The tax is generally withheld (NRA withholding) from the payment made to the foreign person. How to amend my 2011 tax return The term “NRA withholding” is used in this publication descriptively to refer to withholding required under sections 1441, 1442, and 1443 of the Internal Revenue Code. How to amend my 2011 tax return In most cases, NRA withholding describes the withholding regime that requires withholding on a payment of U. How to amend my 2011 tax return S. How to amend my 2011 tax return source income. How to amend my 2011 tax return Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject to NRA withholding. How to amend my 2011 tax return NRA withholding does not include withholding under section 1445 of the Code (see U. How to amend my 2011 tax return S. How to amend my 2011 tax return Real Property Interest, later) or under section 1446 of the Code (see Partnership Withholding on Effectively Connected Income , later). How to amend my 2011 tax return A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign person. How to amend my 2011 tax return However, a withholding agent that can reliably associate the payment with documentation (discussed later) from a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person is not required to withhold. How to amend my 2011 tax return In addition, a withholding agent may apply a reduced rate of withholding (including an exemption from withholding) if it can reliably associate the payment with documentation from a beneficial owner that is a foreign person entitled to a reduced rate of withholding. How to amend my 2011 tax return Withholding Agent You are a withholding agent if you are a U. How to amend my 2011 tax return S. How to amend my 2011 tax return or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. How to amend my 2011 tax return A withholding agent may be an individual, corporation, partnership, trust, association, nominee (under section 1446 of the Code), or any other entity, including any foreign intermediary, foreign partnership, or U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch of certain foreign banks and insurance companies. How to amend my 2011 tax return You may be a withholding agent even if there is no requirement to withhold from a payment or even if another person has withheld the required amount from the payment. How to amend my 2011 tax return Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. How to amend my 2011 tax return In most cases, the U. How to amend my 2011 tax return S. How to amend my 2011 tax return person who pays an amount subject to NRA withholding is the person responsible for withholding. How to amend my 2011 tax return However, other persons may be required to withhold. How to amend my 2011 tax return For example, a payment made by a flow-through entity or nonqualified intermediary that knows, or has reason to know, that the full amount of NRA withholding was not done by the person from which it receives a payment is required to do the appropriate withholding since it also falls within the definition of a withholding agent. How to amend my 2011 tax return In addition, withholding must be done by any qualified intermediary, withholding foreign partnership, or withholding foreign trust in accordance with the terms of its withholding agreement, discussed later. How to amend my 2011 tax return Liability for tax. How to amend my 2011 tax return   As a withholding agent, you are personally liable for any tax required to be withheld. How to amend my 2011 tax return This liability is independent of the tax liability of the foreign person to whom the payment is made. How to amend my 2011 tax return If you fail to withhold and the foreign payee fails to satisfy its U. How to amend my 2011 tax return S. How to amend my 2011 tax return tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties. How to amend my 2011 tax return   The applicable tax will be collected only once. How to amend my 2011 tax return If the foreign person satisfies its U. How to amend my 2011 tax return S. How to amend my 2011 tax return tax liability, you are not liable for the tax but remain liable for any interest and penalties for failure to withhold. How to amend my 2011 tax return Determination of amount to withhold. How to amend my 2011 tax return   You must withhold on the gross amount subject to NRA withholding. How to amend my 2011 tax return You cannot reduce the gross amount by any deductions. How to amend my 2011 tax return However, see Scholarships and Fellowship Grants and Pay for Personal Services Performed , later, for when a deduction for a personal exemption may be allowed. How to amend my 2011 tax return   If the determination of the source of the income or the amount subject to tax depends on facts that are not known at the time of payment, you must withhold an amount sufficient to ensure that at least 30% of the amount subsequently determined to be subject to withholding is withheld. How to amend my 2011 tax return In no case, however, should you withhold more than 30% of the total amount paid. How to amend my 2011 tax return Or, you may make a reasonable estimate of the amount from U. How to amend my 2011 tax return S. How to amend my 2011 tax return sources and put a corresponding part of the amount due in escrow until the amount from U. How to amend my 2011 tax return S. How to amend my 2011 tax return sources can be determined, at which time withholding becomes due. How to amend my 2011 tax return When to withhold. How to amend my 2011 tax return   Withholding is required at the time you make a payment of an amount subject to withholding. How to amend my 2011 tax return A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or other property. How to amend my 2011 tax return A payment is considered made to a person if it is paid for that person's benefit. How to amend my 2011 tax return For example, a payment made to a creditor of a person in satisfaction of that person's debt to the creditor is considered made to the person. How to amend my 2011 tax return A payment also is considered made to a person if it is made to that person's agent. How to amend my 2011 tax return   A U. How to amend my 2011 tax return S. How to amend my 2011 tax return partnership should withhold when any distributions that include amounts subject to withholding are made. How to amend my 2011 tax return However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U. How to amend my 2011 tax return S. How to amend my 2011 tax return partnership must withhold on the foreign partner's distributive share of the income on the earlier of the date that a Schedule K-1 (Form 1065) is provided or mailed to the partner or the due date for furnishing that schedule. How to amend my 2011 tax return If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later. How to amend my 2011 tax return A U. How to amend my 2011 tax return S. How to amend my 2011 tax return trust is required to withhold on the amount includible in the gross income of a foreign beneficiary to the extent the trust's distributable net income consists of an amount subject to withholding. How to amend my 2011 tax return To the extent a U. How to amend my 2011 tax return S. How to amend my 2011 tax return trust is required to distribute an amount subject to withholding but does not actually distribute the amount, it must withhold on the foreign beneficiary's allocable share at the time the income is required to be reported on Form 1042-S. How to amend my 2011 tax return Withholding and Reporting Obligations You are required to report payments subject to NRA withholding on Form 1042-S and to file a tax return on Form 1042. How to amend my 2011 tax return (See Returns Required , later. How to amend my 2011 tax return ) An exception from reporting may apply to individuals who are not required to withhold from a payment and who do not make the payment in the course of their trade or business. How to amend my 2011 tax return Form 1099 reporting and backup withholding. How to amend my 2011 tax return    You also may be responsible as a payer for reporting on Form 1099 payments made to a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person. How to amend my 2011 tax return You must withhold 28% (backup withholding rate) from a reportable payment made to a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person that is subject to Form 1099 reporting if any of the following apply. How to amend my 2011 tax return The U. How to amend my 2011 tax return S. How to amend my 2011 tax return person has not provided its taxpayer identification number (TIN) in the manner required. How to amend my 2011 tax return The IRS notifies you that the TIN furnished by the payee is incorrect. How to amend my 2011 tax return There has been a notified payee underreporting. How to amend my 2011 tax return There has been a payee certification failure. How to amend my 2011 tax return In most cases, a TIN must be provided by a U. How to amend my 2011 tax return S. How to amend my 2011 tax return non-exempt recipient on Form W-9, Request for Taxpayer Identification Number and Certification. How to amend my 2011 tax return A payer files a tax return on Form 945, Annual Return of Withheld Federal Income Tax, for backup withholding. How to amend my 2011 tax return You may be required to file Form 1099 and, if appropriate, backup withhold, even if you do not make the payments directly to that U. How to amend my 2011 tax return S. How to amend my 2011 tax return person. How to amend my 2011 tax return For example, you are required to report income paid to a foreign intermediary or flow-through entity that collects for a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person subject to Form 1099 reporting. How to amend my 2011 tax return See Identifying the Payee , later, for more information. How to amend my 2011 tax return Also see Section S. How to amend my 2011 tax return Special Rules for Reporting Payments Made Through Foreign Intermediaries and Foreign Flow-Through Entities on Form 1099 in the General Instructions for Certain Information Returns. How to amend my 2011 tax return Foreign persons who provide Form W-8BEN, Form W-8ECI, or Form W-8EXP (or applicable documentary evidence) are exempt from backup withholding and Form 1099 reporting. How to amend my 2011 tax return Wages paid to employees. How to amend my 2011 tax return   If you are the employer of a nonresident alien, you generally must withhold taxes at graduated rates. How to amend my 2011 tax return See Pay for Personal Services Performed , later. How to amend my 2011 tax return Effectively connected income by partnerships. How to amend my 2011 tax return   A withholding agent that is a partnership (whether U. How to amend my 2011 tax return S. How to amend my 2011 tax return or foreign) is also responsible for withholding on its income effectively connected with a U. How to amend my 2011 tax return S. How to amend my 2011 tax return trade or business that is allocable to foreign partners. How to amend my 2011 tax return See Partnership Withholding on Effectively Connected Income , later, for more information. How to amend my 2011 tax return U. How to amend my 2011 tax return S. How to amend my 2011 tax return real property interest. How to amend my 2011 tax return   A withholding agent also may be responsible for withholding if a foreign person transfers a U. How to amend my 2011 tax return S. How to amend my 2011 tax return real property interest to the agent, or if it is a corporation, partnership, trust, or estate that distributes a U. How to amend my 2011 tax return S. How to amend my 2011 tax return real property interest to a shareholder, partner, or beneficiary that is a foreign person. How to amend my 2011 tax return See U. How to amend my 2011 tax return S. How to amend my 2011 tax return Real Property Interest , later. How to amend my 2011 tax return Persons Subject to NRA Withholding NRA withholding applies only to payments made to a payee that is a foreign person. How to amend my 2011 tax return It does not apply to payments made to U. How to amend my 2011 tax return S. How to amend my 2011 tax return persons. How to amend my 2011 tax return Usually, you determine the payee's status as a U. How to amend my 2011 tax return S. How to amend my 2011 tax return or foreign person based on the documentation that person provides. How to amend my 2011 tax return See Documentation , later. How to amend my 2011 tax return However, if you have received no documentation or you cannot reliably associate all or a part of a payment with documentation, then you must apply certain presumption rules, discussed later. How to amend my 2011 tax return Identifying the Payee In most cases, the payee is the person to whom you make the payment, regardless of whether that person is the beneficial owner of the income. How to amend my 2011 tax return However, there are situations in which the payee is a person other than the one to whom you actually make a payment. How to amend my 2011 tax return U. How to amend my 2011 tax return S. How to amend my 2011 tax return agent of foreign person. How to amend my 2011 tax return   If you make a payment to a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person and you have actual knowledge that the U. How to amend my 2011 tax return S. How to amend my 2011 tax return person is receiving the payment as an agent of a foreign person, you must treat the payment as made to the foreign person. How to amend my 2011 tax return However, if the U. How to amend my 2011 tax return S. How to amend my 2011 tax return person is a financial institution, you may treat the institution as the payee provided you have no reason to believe that the institution will not comply with its own obligation to withhold. How to amend my 2011 tax return   If the payment is not subject to NRA withholding (for example, gross proceeds from the sales of securities), you must treat the payment as made to a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person and not as a payment to a foreign person. How to amend my 2011 tax return You may be required to report the payment on Form 1099 and, if applicable, backup withhold. How to amend my 2011 tax return Disregarded entities. How to amend my 2011 tax return   A business entity that is not a corporation and that has a single owner may be disregarded as an entity separate from its owner (a disregarded entity) for federal tax purposes. How to amend my 2011 tax return The payee of a payment made to a disregarded entity is the owner of the entity. How to amend my 2011 tax return   If the owner of the entity is a foreign person, you must apply NRA withholding unless you can treat the foreign owner as a beneficial owner entitled to a reduced rate of withholding. How to amend my 2011 tax return   If the owner is a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person, you do not apply NRA withholding. How to amend my 2011 tax return However, you may be required to report the payment on Form 1099 and, if applicable, backup withhold. How to amend my 2011 tax return You may assume that a foreign entity is not a disregarded entity unless you can reliably associate the payment with documentation provided by the owner or you have actual knowledge or reason to know that the foreign entity is a disregarded entity. How to amend my 2011 tax return Flow-Through Entities The payees of payments (other than income effectively connected with a U. How to amend my 2011 tax return S. How to amend my 2011 tax return trade or business) made to a foreign flow-through entity are the owners or beneficiaries of the flow-through entity. How to amend my 2011 tax return This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. How to amend my 2011 tax return Income that is, or is deemed to be, effectively connected with the conduct of a U. How to amend my 2011 tax return S. How to amend my 2011 tax return trade or business of a flow-through entity is treated as paid to the entity. How to amend my 2011 tax return All of the following are flow-through entities. How to amend my 2011 tax return A foreign partnership (other than a withholding foreign partnership). How to amend my 2011 tax return A foreign simple or foreign grantor trust (other than a withholding foreign trust). How to amend my 2011 tax return A fiscally transparent entity receiving income for which treaty benefits are claimed. How to amend my 2011 tax return See Fiscally transparent entity , later. How to amend my 2011 tax return In most cases, you treat a payee as a flow-through entity if it provides you with a Form W-8IMY (see Documentation , later) on which it claims such status. How to amend my 2011 tax return You also may be required to treat the entity as a flow-through entity under the presumption rules, discussed later. How to amend my 2011 tax return You must determine whether the owners or beneficiaries of a flow-through entity are U. How to amend my 2011 tax return S. How to amend my 2011 tax return or foreign persons, how much of the payment relates to each owner or beneficiary, and, if the owner or beneficiary is foreign, whether a reduced rate of NRA withholding applies. How to amend my 2011 tax return You make these determinations based on the documentation and other information (contained in a withholding statement) that is associated with the flow-through entity's Form W-8IMY. How to amend my 2011 tax return If you do not have all of the information that is required to reliably associate a payment with a specific payee, you must apply the presumption rules. How to amend my 2011 tax return See Documentation and Presumption Rules , later. How to amend my 2011 tax return Withholding foreign partnerships and withholding foreign trusts are not flow-through entities. How to amend my 2011 tax return Foreign partnerships. How to amend my 2011 tax return    A foreign partnership is any partnership that is not organized under the laws of any state of the United States or the District of Columbia or any partnership that is treated as foreign under the income tax regulations. How to amend my 2011 tax return If a foreign partnership is not a withholding foreign partnership, the payees of income are the partners of the partnership, provided the partners are not themselves a flow-through entity or a foreign intermediary. How to amend my 2011 tax return However, the payee is the partnership itself if the partnership is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. How to amend my 2011 tax return If a partner is a foreign flow-through entity or a foreign intermediary, you apply the payee determination rules to that partner to determine the payees. How to amend my 2011 tax return Example 1. How to amend my 2011 tax return A nonwithholding foreign partnership has three partners: a nonresident alien individual; a foreign corporation; and a U. How to amend my 2011 tax return S. How to amend my 2011 tax return citizen. How to amend my 2011 tax return You make a payment of U. How to amend my 2011 tax return S. How to amend my 2011 tax return source interest to the partnership. How to amend my 2011 tax return It gives you a Form W-8IMY with which it associates Form W-8BEN from the nonresident alien; Form W-8BEN from the foreign corporation; and Form W-9 from the U. How to amend my 2011 tax return S. How to amend my 2011 tax return citizen. How to amend my 2011 tax return The partnership also gives you a complete withholding statement that enables you to associate a part of the interest payment to each partner. How to amend my 2011 tax return You must treat all three partners as the payees of the interest payment as if the payment were made directly to them. How to amend my 2011 tax return Report the payment to the nonresident alien and the foreign corporation on Forms 1042-S. How to amend my 2011 tax return Report the payment to the U. How to amend my 2011 tax return S. How to amend my 2011 tax return citizen on Form 1099-INT. How to amend my 2011 tax return Example 2. How to amend my 2011 tax return A nonwithholding foreign partnership has two partners: a foreign corporation and a nonwithholding foreign partnership. How to amend my 2011 tax return The second partnership has two partners, both nonresident alien individuals. How to amend my 2011 tax return You make a payment of U. How to amend my 2011 tax return S. How to amend my 2011 tax return source interest to the first partnership. How to amend my 2011 tax return It gives you a valid Form W-8IMY with which it associates a Form W-8BEN from the foreign corporation and a Form W-8IMY from the second partnership. How to amend my 2011 tax return In addition, Forms W-8BEN from the partners are associated with the Form W-8IMY from the second partnership. How to amend my 2011 tax return The Forms W-8IMY from the partnerships have complete withholding statements associated with them. How to amend my 2011 tax return Because you can reliably associate a part of the interest payment with the Form W-8BEN provided by the foreign corporation and the Forms W-8BEN provided by the nonresident alien individual partners as a result of the withholding statements, you must treat them as the payees of the interest. How to amend my 2011 tax return Example 3. How to amend my 2011 tax return You make a payment of U. How to amend my 2011 tax return S. How to amend my 2011 tax return source dividends to a withholding foreign partnership. How to amend my 2011 tax return The partnership has two partners, both foreign corporations. How to amend my 2011 tax return You can reliably associate the payment with a valid Form W-8IMY from the partnership on which it represents that it is a withholding foreign partnership. How to amend my 2011 tax return You must treat the partnership as the payee of the dividends. How to amend my 2011 tax return Foreign simple and grantor trust. How to amend my 2011 tax return   A trust is foreign unless it meets both of the following tests. How to amend my 2011 tax return A court within the United States is able to exercise primary supervision over the administration of the trust. How to amend my 2011 tax return One or more U. How to amend my 2011 tax return S. How to amend my 2011 tax return persons have the authority to control all substantial decisions of the trust. How to amend my 2011 tax return   In most cases, a foreign simple trust is a foreign trust that is required to distribute all of its income annually. How to amend my 2011 tax return A foreign grantor trust is a foreign trust that is treated as a grantor trust under sections 671 through 679 of the Code. How to amend my 2011 tax return   The payees of a payment made to a foreign simple trust are the beneficiaries of the trust. How to amend my 2011 tax return The payees of a payment made to a foreign grantor trust are the owners of the trust. How to amend my 2011 tax return However, the payee is the foreign simple or grantor trust itself if the trust is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. How to amend my 2011 tax return If the beneficiaries or owners are themselves flow-through entities or foreign intermediaries, you apply the payee determination rules to that beneficiary or owner to determine the payees. How to amend my 2011 tax return Example. How to amend my 2011 tax return A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U. How to amend my 2011 tax return S. How to amend my 2011 tax return citizen. How to amend my 2011 tax return You make a payment of interest to the foreign trust. How to amend my 2011 tax return It gives you a Form W-8IMY with which it associates Forms W-8BEN from the nonresident aliens and a Form W-9 from the U. How to amend my 2011 tax return S. How to amend my 2011 tax return citizen. How to amend my 2011 tax return The trust also gives you a complete withholding statement that enables you to associate a part of the interest payment with the forms provided by each beneficiary. How to amend my 2011 tax return You must treat all three beneficiaries as the payees of the interest payment as if the payment were made directly to them. How to amend my 2011 tax return Report the payment to the nonresident aliens on Forms 1042-S. How to amend my 2011 tax return Report the payment to the U. How to amend my 2011 tax return S. How to amend my 2011 tax return citizen on Form 1099-INT. How to amend my 2011 tax return Fiscally transparent entity. How to amend my 2011 tax return   If a reduced rate of withholding under an income tax treaty is claimed, a flow-through entity includes any entity in which the interest holder must treat the entity as fiscally transparent. How to amend my 2011 tax return The determination of whether an entity is fiscally transparent is made on an item of income basis (that is, the determination is made separately for interest, dividends, royalties, etc. How to amend my 2011 tax return ). How to amend my 2011 tax return The interest holder in an entity makes the determination by applying the laws of the jurisdiction where the interest holder is organized, incorporated, or otherwise considered a resident. How to amend my 2011 tax return An entity is considered to be fiscally transparent for the income to the extent the laws of that jurisdiction require the interest holder to separately take into account on a current basis the interest holder's share of the income, whether or not distributed to the interest holder, and the character and source of the income to the interest holder are determined as if the income was realized directly from the source that paid it to the entity. How to amend my 2011 tax return Subject to the standards of knowledge rules discussed later, you generally make the determination that an entity is fiscally transparent based on a Form W-8IMY provided by the entity. How to amend my 2011 tax return   The payees of a payment made to a fiscally transparent entity are the interest holders of the entity. How to amend my 2011 tax return Example. How to amend my 2011 tax return Entity A is a business organization organized under the laws of country X that has an income tax treaty in force with the United States. How to amend my 2011 tax return A has two interest holders, B and C. How to amend my 2011 tax return B is a corporation organized under the laws of country Y. How to amend my 2011 tax return C is a corporation organized under the laws of country Z. How to amend my 2011 tax return Both countries Y and Z have an income tax treaty in force with the United States. How to amend my 2011 tax return A receives royalty income from U. How to amend my 2011 tax return S. How to amend my 2011 tax return sources that is not effectively connected with the conduct of a trade or business in the United States. How to amend my 2011 tax return For U. How to amend my 2011 tax return S. How to amend my 2011 tax return income tax purposes, A is treated as a partnership. How to amend my 2011 tax return Country X treats A as a partnership and requires the interest holders in A to separately take into account on a current basis their respective shares of the income paid to A even if the income is not distributed. How to amend my 2011 tax return The laws of country X provide that the character and source of the income to A's interest holders are determined as if the income was realized directly from the source that paid it to A. How to amend my 2011 tax return Accordingly, A is fiscally transparent in its jurisdiction, country X. How to amend my 2011 tax return B and C are not fiscally transparent under the laws of their respective countries of incorporation. How to amend my 2011 tax return Country Y requires B to separately take into account on a current basis B's share of the income paid to A, and the character and source of the income to B is determined as if the income was realized directly from the source that paid it to A. How to amend my 2011 tax return Accordingly, A is fiscally transparent for that income under the laws of country Y, and B is treated as deriving its share of the U. How to amend my 2011 tax return S. How to amend my 2011 tax return source royalty income for purposes of the U. How to amend my 2011 tax return S. How to amend my 2011 tax return -Y income tax treaty. How to amend my 2011 tax return Country Z, on the other hand, treats A as a corporation and does not require C to take into account its share of A's income on a current basis whether or not distributed. How to amend my 2011 tax return Therefore, A is not treated as fiscally transparent under the laws of country Z. How to amend my 2011 tax return Accordingly, C is not treated as deriving its share of the U. How to amend my 2011 tax return S. How to amend my 2011 tax return source royalty income for purposes of the U. How to amend my 2011 tax return S. How to amend my 2011 tax return -Z income tax treaty. How to amend my 2011 tax return Foreign Intermediaries In most cases, if you make payments to a foreign intermediary, the payees are the persons for whom the foreign intermediary collects the payment, such as account holders or customers, not the intermediary itself. How to amend my 2011 tax return This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. How to amend my 2011 tax return You may, however, treat a qualified intermediary that has assumed primary withholding responsibility for a payment as the payee, and you are not required to withhold. How to amend my 2011 tax return An intermediary is a custodian, broker, nominee, or any other person that acts as an agent for another person. How to amend my 2011 tax return A foreign intermediary is either a qualified intermediary or a nonqualified intermediary. How to amend my 2011 tax return In most cases, you determine whether an entity is a qualified intermediary or a nonqualified intermediary based on the representations the intermediary makes on Form W-8IMY. How to amend my 2011 tax return You must determine whether the customers or account holders of a foreign intermediary are U. How to amend my 2011 tax return S. How to amend my 2011 tax return or foreign persons and, if the account holder or customer is foreign, whether a reduced rate of NRA withholding applies. How to amend my 2011 tax return You make these determinations based on the foreign intermediary's Form W-8IMY and associated information and documentation. How to amend my 2011 tax return If you do not have all of the information or documentation that is required to reliably associate a payment with a payee, you must apply the presumption rules. How to amend my 2011 tax return See Documentation and Presumption Rules , later. How to amend my 2011 tax return Nonqualified intermediary. How to amend my 2011 tax return   A nonqualified intermediary (NQI) is any intermediary that is a foreign person and that is not a qualified intermediary. How to amend my 2011 tax return The payees of a payment made to an NQI are the customers or account holders on whose behalf the NQI is acting. How to amend my 2011 tax return Example. How to amend my 2011 tax return You make a payment of interest to a foreign bank that is a nonqualified intermediary. How to amend my 2011 tax return The bank gives you a Form W-8IMY and the Forms W-8BEN of two foreign persons, and a Form W-9 from a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person for whom the bank is collecting the payments. How to amend my 2011 tax return The bank also associates with its Form W-8IMY a withholding statement on which it allocates the interest payment to each account holder and provides all other information required to be on the withholding statement. How to amend my 2011 tax return The account holders are the payees of the interest payment. How to amend my 2011 tax return You should report the part of the interest paid to the two foreign persons on Forms 1042-S and the part paid to the U. How to amend my 2011 tax return S. How to amend my 2011 tax return person on Form 1099-INT. How to amend my 2011 tax return Qualified intermediary. How to amend my 2011 tax return   A qualified intermediary (QI) is any foreign intermediary (or foreign branch of a U. How to amend my 2011 tax return S. How to amend my 2011 tax return intermediary) that has entered into a qualified intermediary withholding agreement (discussed later) with the IRS. How to amend my 2011 tax return You may treat a QI as a payee to the extent the QI assumes primary withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for a payment. How to amend my 2011 tax return In this situation, the QI is required to withhold the tax. How to amend my 2011 tax return You can determine whether a QI has assumed responsibility from the Form W-8IMY provided by the QI. How to amend my 2011 tax return   A payment to a QI to the extent it does not assume primary NRA withholding responsibility is considered made to the person on whose behalf the QI acts. How to amend my 2011 tax return If a QI does not assume Form 1099 reporting and backup withholding responsibility, you must report on Form 1099 and, if applicable, backup withhold as if you were making the payment directly to the U. How to amend my 2011 tax return S. How to amend my 2011 tax return person. How to amend my 2011 tax return Branches of financial institutions. How to amend my 2011 tax return   Branches of financial institutions are not permitted to operate as QIs if they are located outside of countries having approved “know-your-customer” (KYC) rules. How to amend my 2011 tax return The countries with approved KYC rules are listed on IRS. How to amend my 2011 tax return gov. How to amend my 2011 tax return QI withholding agreement. How to amend my 2011 tax return   Foreign financial institutions and foreign branches of U. How to amend my 2011 tax return S. How to amend my 2011 tax return financial institutions can enter into an agreement with the IRS to be a qualified intermediary. How to amend my 2011 tax return   A QI is entitled to certain simplified withholding and reporting rules. How to amend my 2011 tax return In general, there are three major areas whereby intermediaries with QI status are afforded such simplified treatment. How to amend my 2011 tax return   To apply for QI status, complete Form 14345, Qualified Intermediary Application, and Form SS-4, Application for Employer Identification Number. How to amend my 2011 tax return These forms, and the procedures required to obtain a QI withholding agreement are available at www. How to amend my 2011 tax return irs. How to amend my 2011 tax return gov/Businesses/Corporations/Qualified-Intermediaries-(QI). How to amend my 2011 tax return Documentation. How to amend my 2011 tax return   A QI is not required to forward documentation obtained from foreign account holders to the U. How to amend my 2011 tax return S. How to amend my 2011 tax return withholding agent from whom the QI receives a payment of U. How to amend my 2011 tax return S. How to amend my 2011 tax return source income. How to amend my 2011 tax return The QI maintains such documentation at its location and provides the U. How to amend my 2011 tax return S. How to amend my 2011 tax return withholding agent with withholding rate pools. How to amend my 2011 tax return A withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding. How to amend my 2011 tax return   A QI is required to provide the U. How to amend my 2011 tax return S. How to amend my 2011 tax return withholding agent with information regarding U. How to amend my 2011 tax return S. How to amend my 2011 tax return persons subject to Form 1099 information reporting unless the QI assumes the primary obligation to do Form 1099 reporting and backup withholding. How to amend my 2011 tax return   If a QI obtains documentary evidence under the “know-your-customer” rules that apply to the QI under local law, and the documentary evidence is of a type specified in an attachment to the QI agreement, the documentary evidence remains valid until there is a change in circumstances or the QI knows the information is incorrect. How to amend my 2011 tax return This indefinite validity period rule does not apply to Forms W-8 or to documentary evidence that is not of the type specified in the attachment to the agreement. How to amend my 2011 tax return Form 1042-S reporting. How to amend my 2011 tax return   A QI is permitted to report payments made to its direct foreign account holders on a pooled basis rather than reporting payments to each direct account holder specifically. How to amend my 2011 tax return Pooled basis reporting is not available for payments to certain account holders, such as a nonqualified intermediary or a flow-through entity (discussed earlier). How to amend my 2011 tax return Collective refund procedures. How to amend my 2011 tax return   A QI may seek a refund on behalf of its direct account holders. How to amend my 2011 tax return The direct account holders, therefore, are not required to file returns with the IRS to obtain refunds, but rather may obtain them from the QI. How to amend my 2011 tax return U. How to amend my 2011 tax return S. How to amend my 2011 tax return branches of foreign banks and foreign insurance companies. How to amend my 2011 tax return   Special rules apply to a U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch of a foreign bank subject to Federal Reserve Board supervision or a foreign insurance company subject to state regulatory supervision. How to amend my 2011 tax return If you agree to treat the branch as a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person, you may treat the branch as a U. How to amend my 2011 tax return S. How to amend my 2011 tax return payee for a payment subject to NRA withholding provided you receive a Form W-8IMY from the U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch on which the agreement is evidenced. How to amend my 2011 tax return If you treat the branch as a U. How to amend my 2011 tax return S. How to amend my 2011 tax return payee, you are not required to withhold. How to amend my 2011 tax return Even though you agree to treat the branch as a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person, you must report the payment on Form 1042-S. How to amend my 2011 tax return   A financial institution organized in a U. How to amend my 2011 tax return S. How to amend my 2011 tax return possession is treated as a U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch. How to amend my 2011 tax return The special rules discussed in this section apply to a possessions financial institution. How to amend my 2011 tax return   If you are paying a U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch an amount that is not subject to NRA withholding, treat the payment as made to a foreign person, irrespective of any agreement to treat the branch as a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person for amounts subject to NRA withholding. How to amend my 2011 tax return Consequently, amounts not subject to NRA withholding that are paid to a U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch are not subject to Form 1099 reporting or backup withholding. How to amend my 2011 tax return   Alternatively, a U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch may provide you with a Form W-8IMY with which it associates the documentation of the persons on whose behalf it acts. How to amend my 2011 tax return In this situation, the payees are the persons on whose behalf the branch acts provided you can reliably associate the payment with valid documentation from those persons. How to amend my 2011 tax return See Nonqualified Intermediaries under  Documentation, later. How to amend my 2011 tax return   If the U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch does not provide you with a Form W-8IMY, then you should treat a payment subject to NRA withholding as made to the foreign person of which the branch is a part and the income as effectively connected with the conduct of a trade or business in the United States. How to amend my 2011 tax return Withholding foreign partnership and foreign trust. How to amend my 2011 tax return   A withholding foreign partnership (WP) is any foreign partnership that has entered into a WP withholding agreement with the IRS and is acting in that capacity. How to amend my 2011 tax return A withholding foreign trust (WT) is a foreign simple or grantor trust that has entered into a WT withholding agreement with the IRS and is acting in that capacity. How to amend my 2011 tax return   A WP or WT may act in that capacity only for payments of amounts subject to NRA withholding that are distributed to, or included in the distributive share of, its direct partners, beneficiaries, or owners. How to amend my 2011 tax return A WP or WT acting in that capacity must assume NRA withholding responsibility for these amounts. How to amend my 2011 tax return You may treat a WP or WT as a payee if it has provided you with documentation (discussed later) that represents that it is acting as a WP or WT for such amounts. How to amend my 2011 tax return WP and WT withholding agreements. How to amend my 2011 tax return   The WP and WT withholding agreements and the application procedures for the agreements are in Revenue Procedure 2003-64. How to amend my 2011 tax return Also see the following items. How to amend my 2011 tax return Revenue Procedure 2004-21. How to amend my 2011 tax return Revenue Procedure 2005-77. How to amend my 2011 tax return Employer identification number (EIN). How to amend my 2011 tax return   A completed Form SS-4 must be submitted with the application for being a WP or WT. How to amend my 2011 tax return The WP or WT will be assigned a WP-EIN or WT-EIN to be used only when acting in that capacity. How to amend my 2011 tax return Documentation. How to amend my 2011 tax return   A WP or WT must provide you with a Form W-8IMY that certifies that the WP or WT is acting in that capacity and a written statement identifying the amounts for which it is so acting. How to amend my 2011 tax return The statement is not required to contain withholding rate pool information or any information relating to the identity of a direct partner, beneficiary, or owner. How to amend my 2011 tax return The Form W-8IMY must contain the WP-EIN or WT-EIN. How to amend my 2011 tax return Foreign Persons A payee is subject to NRA withholding only if it is a foreign person. How to amend my 2011 tax return A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person. How to amend my 2011 tax return It also includes a foreign branch of a U. How to amend my 2011 tax return S. How to amend my 2011 tax return financial institution if the foreign branch is a qualified intermediary. How to amend my 2011 tax return In most cases, the U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch of a foreign corporation or partnership is treated as a foreign person. How to amend my 2011 tax return Nonresident alien. How to amend my 2011 tax return   A nonresident alien is an individual who is not a U. How to amend my 2011 tax return S. How to amend my 2011 tax return citizen or a resident alien. How to amend my 2011 tax return A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding. How to amend my 2011 tax return Married to U. How to amend my 2011 tax return S. How to amend my 2011 tax return citizen or resident alien. How to amend my 2011 tax return   Nonresident alien individuals married to U. How to amend my 2011 tax return S. How to amend my 2011 tax return citizens or resident aliens may choose to be treated as resident aliens for certain income tax purposes. How to amend my 2011 tax return However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. How to amend my 2011 tax return Wages paid to these individuals are subject to graduated withholding. How to amend my 2011 tax return See Wages Paid to Employees—Graduated Withholding . How to amend my 2011 tax return Resident alien. How to amend my 2011 tax return   A resident alien is an individual who is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year. How to amend my 2011 tax return Green card test. How to amend my 2011 tax return An alien is a resident alien if the individual was a lawful permanent resident of the United States at any time during the calendar year. How to amend my 2011 tax return This is known as the green card test because these aliens hold immigrant visas (also known as green cards). How to amend my 2011 tax return Substantial presence test. How to amend my 2011 tax return An alien is considered a resident alien if the individual meets the substantial presence test for the calendar year. How to amend my 2011 tax return Under this test, the individual must be physically present in the United States on at least: 31 days during the current calendar year, and 183 days during the current year and the 2 preceding years, counting all the days of physical presence in the current year, but only 1/3 the number of days of presence in the first preceding year, and only 1/6 the number of days in the second preceding year. How to amend my 2011 tax return   In most cases, the days the alien is in the United States as a teacher, student, or trainee on an “F,” “J,” “M,” or “Q” visa are not counted. How to amend my 2011 tax return This exception is for a limited period of time. How to amend my 2011 tax return   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. How to amend my 2011 tax return Note. How to amend my 2011 tax return   If your employee is late in notifying you that his or her status changed from nonresident alien to resident alien, you may have to make an adjustment to Form 941 if that employee was exempt from withholding of social security and Medicare taxes as a nonresident alien. How to amend my 2011 tax return For more information on making adjustments, see chapter 13 of Publication 15 (Circular E). How to amend my 2011 tax return Resident of a U. How to amend my 2011 tax return S. How to amend my 2011 tax return possession. How to amend my 2011 tax return   A bona fide resident of Puerto Rico, the U. How to amend my 2011 tax return S. How to amend my 2011 tax return Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), or American Samoa who is not a U. How to amend my 2011 tax return S. How to amend my 2011 tax return citizen or a U. How to amend my 2011 tax return S. How to amend my 2011 tax return national is treated as a nonresident alien for the withholding rules explained here. How to amend my 2011 tax return A bona fide resident of a possession is someone who: Meets the presence test, Does not have a tax home outside the possession, and Does not have a closer connection to the United States or to a foreign country than to the possession. How to amend my 2011 tax return   For more information, see Publication 570, Tax Guide for Individuals With Income From U. How to amend my 2011 tax return S. How to amend my 2011 tax return Possessions. How to amend my 2011 tax return Foreign corporations. How to amend my 2011 tax return   A foreign corporation is one that does not fit the definition of a domestic corporation. How to amend my 2011 tax return A domestic corporation is one that was created or organized in the United States or under the laws of the United States, any of its states, or the District of Columbia. How to amend my 2011 tax return Guam or Northern Mariana Islands corporations. How to amend my 2011 tax return   A corporation created or organized in, or under the laws of, Guam or the CNMI is not considered a foreign corporation for the purpose of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons; and At least 20% of the corporation's gross income is derived from sources within Guam or the CNMI for the 3-year period ending with the close of the preceding tax year of the corporation (or the period the corporation has been in existence, if less). How to amend my 2011 tax return Note. How to amend my 2011 tax return   The provisions discussed below under U. How to amend my 2011 tax return S. How to amend my 2011 tax return Virgin Islands and American Samoa corporations will apply to Guam or CNMI corporations when an implementing agreement is in effect between the United States and that possession. How to amend my 2011 tax return U. How to amend my 2011 tax return S. How to amend my 2011 tax return Virgin Islands and American Samoa corporations. How to amend my 2011 tax return   A corporation created or organized in, or under the laws of, the U. How to amend my 2011 tax return S. How to amend my 2011 tax return Virgin Islands or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons, At least 65% of the corporation's gross income is effectively connected with the conduct of a trade or business in the U. How to amend my 2011 tax return S. How to amend my 2011 tax return Virgin Islands, American Samoa, Guam, the CNMI, or the United States for the 3-year period ending with the close of the tax year of the corporation (or the period the corporation or any predecessor has been in existence, if less), and No substantial part of the income of the corporation is used, directly or indirectly, to satisfy obligations to a person who is not a bona fide resident of the U. How to amend my 2011 tax return S. How to amend my 2011 tax return Virgin Islands, American Samoa, Guam, the CNMI, or the United States. How to amend my 2011 tax return Foreign private foundations. How to amend my 2011 tax return   A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. How to amend my 2011 tax return Gross investment income from sources within the United States paid to a qualified foreign private foundation is subject to NRA withholding at a 4% rate (unless exempted by a treaty) rather than the ordinary statutory 30% rate. How to amend my 2011 tax return Other foreign organizations, associations, and charitable institutions. How to amend my 2011 tax return   An organization may be exempt from income tax under section 501(a) of the Internal Revenue Code even if it was formed under foreign law. How to amend my 2011 tax return In most cases, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the IRS has determined that they are foreign private foundations. How to amend my 2011 tax return   Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld. How to amend my 2011 tax return   You must withhold tax on the unrelated business income (as described in Publication 598, Tax on Unrelated Business Income of Exempt Organizations) of foreign tax-exempt organizations in the same way that you would withhold tax on similar income of nonexempt organizations. How to amend my 2011 tax return U. How to amend my 2011 tax return S. How to amend my 2011 tax return branches of foreign persons. How to amend my 2011 tax return   In most cases, a payment to a U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch of a foreign person is a payment made to the foreign person. How to amend my 2011 tax return However, you may treat payments to U. How to amend my 2011 tax return S. How to amend my 2011 tax return branches of foreign banks and foreign insurance companies (discussed earlier) that are subject to U. How to amend my 2011 tax return S. How to amend my 2011 tax return regulatory supervision as payments made to a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person, if you and the U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. How to amend my 2011 tax return For this purpose, a financial institution organized under the laws of a U. How to amend my 2011 tax return S. How to amend my 2011 tax return possession is treated as a U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch. How to amend my 2011 tax return Documentation In most cases, you must withhold 30% from the gross amount paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes either of the following. How to amend my 2011 tax return The payee is a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person. How to amend my 2011 tax return The payee is a foreign person that is the beneficial owner of the income and is entitled to a reduced rate of withholding. How to amend my 2011 tax return In most cases, you must get the documentation before you make the payment. How to amend my 2011 tax return The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. How to amend my 2011 tax return See Standards of Knowledge , later. How to amend my 2011 tax return If you cannot reliably associate a payment with valid documentation, you must use the presumption rules discussed later. How to amend my 2011 tax return For example, if you do not have documentation or you cannot determine the part of a payment that is allocable to specific documentation, you must use the presumption rules. How to amend my 2011 tax return The specific types of documentation are discussed in this section. How to amend my 2011 tax return However, see Withholding on Specific Income , later, as well as the instructions to the particular forms. How to amend my 2011 tax return As the withholding agent, you also may want to see the Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY. How to amend my 2011 tax return Section 1446 withholding. How to amend my 2011 tax return   Under section 1446 of the Code, a partnership must withhold tax on its effectively connected income allocable to a foreign partner. How to amend my 2011 tax return In most cases, a partnership determines if a partner is a foreign partner and the partner's tax classification based on the withholding certificate provided by the partner. How to amend my 2011 tax return This is the same documentation that is filed for NRA withholding, but may require additional information as discussed under each of the forms in this section. How to amend my 2011 tax return Joint owners. How to amend my 2011 tax return    If you make a payment to joint owners, you need to get documentation from each owner. How to amend my 2011 tax return Form W-9. How to amend my 2011 tax return   In most cases, you can treat the payee as a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person if the payee gives you a Form W-9. How to amend my 2011 tax return The Form W-9 can be used only by a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person and must contain the payee's taxpayer identification number (TIN). How to amend my 2011 tax return If there is more than one owner, you may treat the total amount as paid to a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person if any one of the owners gives you a Form W-9. How to amend my 2011 tax return See U. How to amend my 2011 tax return S. How to amend my 2011 tax return Taxpayer Identification Numbers , later. How to amend my 2011 tax return U. How to amend my 2011 tax return S. How to amend my 2011 tax return persons are not subject to NRA withholding, but may be subject to Form 1099 reporting and backup withholding. How to amend my 2011 tax return Form W-8. How to amend my 2011 tax return   In most cases, a foreign payee of the income should give you a form in the Form W-8 series. How to amend my 2011 tax return Until further notice, you can rely upon Forms W-8 that contain a P. How to amend my 2011 tax return O. How to amend my 2011 tax return box as a permanent residence address provided you do not know, or have reason to know, that the person providing the form is a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person and that a street address is available. How to amend my 2011 tax return You may rely on Forms W-8 for which there is a U. How to amend my 2011 tax return S. How to amend my 2011 tax return mailing address provided you received the form prior to December 31, 2001. How to amend my 2011 tax return   If certain requirements are met, the foreign person can give you documentary evidence, rather than a Form W-8. How to amend my 2011 tax return You can rely on documentary evidence in lieu of a Form W-8 for a payment made in a U. How to amend my 2011 tax return S. How to amend my 2011 tax return possession. How to amend my 2011 tax return Other documentation. How to amend my 2011 tax return   Other documentation may be required to claim an exemption from, or a reduced rate of, withholding on pay for personal services. How to amend my 2011 tax return The nonresident alien individual may have to give you a Form W-4 or a Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. How to amend my 2011 tax return These forms are discussed in Pay for Personal Services Performed under Withholding on Specific Income. How to amend my 2011 tax return Beneficial Owners If all the appropriate requirements have been established on a Form W-8BEN, W-8ECI, W-8EXP or, if applicable, on documentary evidence, you may treat the payee as a foreign beneficial owner. How to amend my 2011 tax return Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. How to amend my 2011 tax return   This form is used by a foreign person to: Establish foreign status; Claim that such person is the beneficial owner of the income for which the form is being furnished or a partner in a partnership subject to section 1446 withholding; and If applicable, claim a reduced rate of, or exemption from, withholding under an income tax treaty. How to amend my 2011 tax return   Form W-8BEN also may be used to claim that the foreign person is exempt from Form 1099 reporting and backup withholding for income that is not subject to NRA withholding. How to amend my 2011 tax return For example, a foreign person may provide a Form W-8BEN to a broker to establish that the gross proceeds from the sale of securities are not subject to Form 1099 reporting or backup withholding. How to amend my 2011 tax return Claiming treaty benefits. How to amend my 2011 tax return   You may apply a reduced rate of withholding to a foreign person that provides a Form W-8BEN claiming a reduced rate of withholding under an income tax treaty only if the person provides a U. How to amend my 2011 tax return S. How to amend my 2011 tax return TIN and certifies that: It is a resident of a treaty country; It is the beneficial owner of the income; If it is an entity, it derives the income within the meaning of section 894 of the Internal Revenue Code (it is not fiscally transparent); and It meets any limitation on benefits provision contained in the treaty, if applicable. How to amend my 2011 tax return   If the foreign beneficial owner claiming a treaty benefit is related to you, the foreign beneficial owner also must certify on Form W-8BEN that it will file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), if the amount subject to NRA withholding received during a calendar year exceeds, in the aggregate, $500,000. How to amend my 2011 tax return   An entity derives income for which it is claiming treaty benefits only if the entity is not treated as fiscally transparent for that income. How to amend my 2011 tax return See Fiscally transparent entity discussed earlier under Flow-Through Entities. How to amend my 2011 tax return   Limitations on benefits provisions generally prohibit third country residents from obtaining treaty benefits. How to amend my 2011 tax return For example, a foreign corporation may not be entitled to a reduced rate of withholding unless a minimum percentage of its owners are citizens or residents of the United States or the treaty country. How to amend my 2011 tax return   The exemptions from, or reduced rates of, U. How to amend my 2011 tax return S. How to amend my 2011 tax return tax vary under each treaty. How to amend my 2011 tax return You must check the provisions of the tax treaty that apply. How to amend my 2011 tax return Tables at the end of this publication show the countries with which the United States has income tax treaties and the rates of withholding that apply in cases where all conditions of the particular treaty articles are satisfied. How to amend my 2011 tax return   If you know, or have reason to know, that an owner of income is not eligible for treaty benefits claimed, you must not apply the treaty rate. How to amend my 2011 tax return You are not, however, responsible for misstatements on a Form W-8, documentary evidence, or statements accompanying documentary evidence for which you did not have actual knowledge, or reason to know, that the statements were incorrect. How to amend my 2011 tax return Exceptions to TIN requirement. How to amend my 2011 tax return   A foreign person does not have to provide a TIN to claim a reduced rate of withholding under a treaty if the requirements for the following exceptions are met. How to amend my 2011 tax return Income from marketable securities (discussed next). How to amend my 2011 tax return Unexpected payments to an individual (discussed under U. How to amend my 2011 tax return S. How to amend my 2011 tax return Taxpayer Identification Numbers ). How to amend my 2011 tax return Marketable securities. How to amend my 2011 tax return   A Form W-8BEN provided to claim treaty benefits does not need a U. How to amend my 2011 tax return S. How to amend my 2011 tax return TIN if the foreign beneficial owner is claiming the benefits on income from marketable securities. How to amend my 2011 tax return For this purpose, income from a marketable security consists of the following items. How to amend my 2011 tax return Dividends and interest from stocks and debt obligations that are actively traded. How to amend my 2011 tax return Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund). How to amend my 2011 tax return Dividends, interest, or royalties from units of beneficial interest in a unit investment trust that are (or were upon issuance) publicly offered and are registered with the SEC under the Securities Act of 1933. How to amend my 2011 tax return Income related to loans of any of the above securities. How to amend my 2011 tax return Offshore accounts. How to amend my 2011 tax return   If a payment is made outside the United States to an offshore account, a payee may give you documentary evidence, rather than Form W-8BEN. How to amend my 2011 tax return   In most cases, a payment is made outside the United States if you complete the acts necessary to effect the payment outside the United States. How to amend my 2011 tax return However, an amount paid by a bank or other financial institution on a deposit or account usually will be treated as paid at the branch or office where the amount is credited. How to amend my 2011 tax return An offshore account is an account maintained at an office or branch of a U. How to amend my 2011 tax return S. How to amend my 2011 tax return or foreign bank or other financial institution at any location outside the United States. How to amend my 2011 tax return   You may rely on documentary evidence given to you by a nonqualified intermediary or a flow-through entity with its Form W-8IMY. How to amend my 2011 tax return This rule applies even though you make the payment to a nonqualified intermediary or flow-through entity in the United States. How to amend my 2011 tax return In most cases, the nonqualified intermediary or flow-through entity that gives you documentary evidence also will have to give you a withholding statement, discussed later. How to amend my 2011 tax return Documentary evidence. How to amend my 2011 tax return   You may apply a reduced rate of withholding to income from marketable securities (discussed earlier) paid outside the United States to an offshore account if the beneficial owner gives you documentary evidence in place of a Form W-8BEN. How to amend my 2011 tax return To claim treaty benefits, the documentary evidence must be one of the following: A certificate of residence that: Is issued by a tax official of the treaty country of which the foreign beneficial owner claims to be a resident, States that the person has filed its most recent income tax return as a resident of that country, and Is issued within 3 years prior to being presented to you. How to amend my 2011 tax return Documentation for an individual that: Includes the individual's name, address, and photograph, Is an official document issued by an authorized governmental body, and Is issued no more than 3 years prior to being presented to you. How to amend my 2011 tax return Documentation for an entity that: Includes the name of the entity, Includes the address of its principal office in the treaty country, and Is an official document issued by an authorized governmental body. How to amend my 2011 tax return In addition to the documentary evidence, a foreign beneficial owner that is an entity must provide a statement that it derives the income for which it claims treaty benefits and that it meets one or more of the conditions set forth in a limitation on benefits article, if any, (or similar provision) contained in the applicable treaty. How to amend my 2011 tax return Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States. How to amend my 2011 tax return   This form is used by a foreign person to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim that the income is effectively connected with the conduct of a trade or business in the United States. How to amend my 2011 tax return (See Effectively Connected Income , later. How to amend my 2011 tax return )   Effectively connected income for which a valid Form W-8ECI has been provided is generally not subject to NRA withholding. How to amend my 2011 tax return   If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U. How to amend my 2011 tax return S. How to amend my 2011 tax return trade or business is subject to withholding under section 1446. How to amend my 2011 tax return If the partner has made, or will make, an election under section 871(d) or 882(d), the partner must submit Form W-8ECI, and attach a copy of the election, or a statement of intent to elect, to the form. How to amend my 2011 tax return    If the partner's only effectively connected income is the income allocated from the partnership and the partner is not making the election under section 871(d) or 882(d), the partner should provide Form W-8BEN to the partnership. How to amend my 2011 tax return Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. How to amend my 2011 tax return   This form is used by a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U. How to amend my 2011 tax return S. How to amend my 2011 tax return possession to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim a reduced rate of, or an exemption from, withholding as such an entity. How to amend my 2011 tax return   If the government or organization is a partner in a partnership carrying on a trade or business in the United States, the effectively connected income allocable to the partner is subject to withholding under section 1446. How to amend my 2011 tax return   See Foreign Governments and Certain Other Foreign Organizations , later. How to amend my 2011 tax return Foreign Intermediaries and Foreign Flow-Through Entities Payments made to a foreign intermediary or foreign flow-through entity are treated as made to the payees on whose behalf the intermediary or entity acts. How to amend my 2011 tax return The Form W-8IMY provided by a foreign intermediary or flow-through entity must be accompanied by additional information for you to be able to reliably associate the payment with a payee. How to amend my 2011 tax return The additional information required depends on the type of intermediary or flow-through entity and the extent of the withholding responsibilities it assumes. How to amend my 2011 tax return Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U. How to amend my 2011 tax return S. How to amend my 2011 tax return Branches for United States Tax Withholding. How to amend my 2011 tax return   This form is used by foreign intermediaries and foreign flow-through entities, as well as certain U. How to amend my 2011 tax return S. How to amend my 2011 tax return branches, to: Represent that a foreign person is a qualified intermediary or nonqualified intermediary, Represent, if applicable, that the qualified intermediary is assuming primary NRA withholding responsibility and/or primary Form 1099 reporting and backup withholding responsibility, Represent that a foreign partnership or a foreign simple or grantor trust is a withholding foreign partnership or a withholding foreign trust, Represent that a foreign flow-through entity is a nonwithholding foreign partnership, or a nonwithholding foreign trust and that the income is not effectively connected with the conduct of a trade or business in the United States, Represent that the provider is a U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch of a foreign bank or insurance company and either is agreeing to be treated as a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person or is transmitting documentation of the persons on whose behalf it is acting, or Represent that, for purposes of section 1446, it is an upper-tier foreign partnership or a foreign grantor trust and that the form is being used to transmit the required documentation. How to amend my 2011 tax return For information on qualifying as an upper-tier foreign partnership, see Regulations section 1. How to amend my 2011 tax return 1446-5. How to amend my 2011 tax return Qualified Intermediaries In most cases, a QI is any foreign intermediary that has entered into a QI withholding agreement (discussed earlier) with the IRS. How to amend my 2011 tax return A foreign intermediary that has received a QI employer identification number (QI-EIN) may represent on Form W-8IMY that it is a QI before it receives a fully executed agreement. How to amend my 2011 tax return The intermediary can claim that it is a QI until the IRS revokes its QI-EIN. How to amend my 2011 tax return The IRS will revoke a QI-EIN if the QI agreement is not executed and returned to the IRS within a reasonable period of time after the agreement was sent to the intermediary for signature. How to amend my 2011 tax return Responsibilities. How to amend my 2011 tax return   Payments made to a QI that does not assume NRA withholding responsibility are treated as paid to its account holders and customers. How to amend my 2011 tax return However, a QI is not required to provide you with documentation it obtains from its foreign account holders and customers. How to amend my 2011 tax return Instead, it provides you with a withholding statement that contains withholding rate pool information. How to amend my 2011 tax return A withholding rate pool is a payment of a single type of income, determined in accordance with the categories of income reported on Form 1042-S that is subject to a single rate of withholding. How to amend my 2011 tax return A qualified intermediary is required to provide you with information regarding U. How to amend my 2011 tax return S. How to amend my 2011 tax return persons subject to Form 1099 reporting and to provide you withholding rate pool information separately for each such U. How to amend my 2011 tax return S. How to amend my 2011 tax return person unless it has assumed Form 1099 reporting and backup withholding responsibility. How to amend my 2011 tax return For the alternative procedure for providing rate pool information for U. How to amend my 2011 tax return S. How to amend my 2011 tax return non-exempt persons, see the Form W-8IMY instructions. How to amend my 2011 tax return   The withholding statement must: Designate those accounts for which it acts as a qualified intermediary, Designate those accounts for which it assumes primary NRA withholding responsibility and/or primary Form 1099 and backup withholding responsibility, and Provide sufficient information for you to allocate the payment to a withholding rate pool. How to amend my 2011 tax return   The extent to which you must have withholding rate pool information depends on the withholding and reporting obligations assumed by the QI. How to amend my 2011 tax return Primary responsibility not assumed. How to amend my 2011 tax return   If a QI does not assume primary NRA withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for the payment, you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to each withholding rate pool for foreign payees. How to amend my 2011 tax return Unless the alternative procedure applies, the qualified intermediary must provide you with a separate withholding rate pool for each U. How to amend my 2011 tax return S. How to amend my 2011 tax return person subject to Form 1099 reporting and/or backup withholding. How to amend my 2011 tax return The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. How to amend my 2011 tax return Primary NRA withholding responsibility assumed. How to amend my 2011 tax return   If you make a payment to a QI that assumes primary NRA withholding responsibility (but not primary Form 1099 reporting and backup withholding responsibility), you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to the withholding rate pool for which the QI assumes primary NRA withholding responsibility and the part of the payment attributable to withholding rate pools for each U. How to amend my 2011 tax return S. How to amend my 2011 tax return person, unless the alternative procedure applies, subject to Form 1099 reporting and/or backup withholding. How to amend my 2011 tax return The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. How to amend my 2011 tax return Primary NRA and Form 1099 responsibility assumed. How to amend my 2011 tax return   If you make a payment to a QI that assumes both primary NRA withholding responsibility and primary Form 1099 reporting and backup withholding responsibility, you can reliably associate a payment with valid documentation provided that you receive a valid Form W-8IMY. How to amend my 2011 tax return It is not necessary to associate the payment with withholding rate pools. How to amend my 2011 tax return Example. How to amend my 2011 tax return You make a payment of dividends to a QI. How to amend my 2011 tax return It has five customers: two are foreign persons who have provided documentation entitling them to a 15% rate of withholding on dividends; two are foreign persons subject to a 30% rate of withholding on dividends; and one is a U. How to amend my 2011 tax return S. How to amend my 2011 tax return individual who provides it with a Form W-9. How to amend my 2011 tax return Each customer is entitled to 20% of the dividend payment. How to amend my 2011 tax return The QI does not assume any primary withholding responsibility. How to amend my 2011 tax return The QI gives you a Form W-8IMY with which it associates the Form W-9 and a withholding statement that allocates 40% of the dividend to a 15% withholding rate pool, 40% to a 30% withholding rate pool, and 20% to the U. How to amend my 2011 tax return S. How to amend my 2011 tax return individual. How to amend my 2011 tax return You should report on Forms 1042-S 40% of the payment as made to a 15% rate dividend pool and 40% of the payment as made to a 30% rate dividend pool. How to amend my 2011 tax return The part of the payment allocable to the U. How to amend my 2011 tax return S. How to amend my 2011 tax return individual (20%) is reportable on Form 1099-DIV. How to amend my 2011 tax return Smaller partnerships and trusts. How to amend my 2011 tax return   A QI may apply special rules to a smaller partnership or trust (Joint Account Provision) only if the partnership or trust meets the following conditions. How to amend my 2011 tax return It is a foreign partnership or foreign simple or grantor trust. How to amend my 2011 tax return It is a direct account holder of the QI. How to amend my 2011 tax return It does not have any partner, beneficiary, or owner that is a U. How to amend my 2011 tax return S. How to amend my 2011 tax return person or a pass- through partner, beneficiary, or owner. How to amend my 2011 tax return   For information on these rules, see section 4A. How to amend my 2011 tax return 01 of the QI agreement. How to amend my 2011 tax return This is found in Appendix 3 of Revenue Procedure 2003-64. How to amend my 2011 tax return Also see Revenue Procedure 2004-21. How to amend my 2011 tax return Related partnerships and trusts. How to amend my 2011 tax return    A QI may apply special rules to a related partnership or trust only if the partnership or trust meets the following conditions. How to amend my 2011 tax return It is a foreign partnership or foreign simple or grantor trust. How to amend my 2011 tax return It is either: A direct account holder of the QI, or An indirect account holder of the QI that is a direct partner, beneficiary, or owner of a partnership or trust to which the QI has applied this rule. How to amend my 2011 tax return For information on these rules, see section 4A. How to amend my 2011 tax return 02 of the QI agreement. How to amend my 2011 tax return This is found in Appendix 3 of Revenue Procedure 2003-64. How to amend my 2011 tax return Also see Revenue Procedure 2005-77. How to amend my 2011 tax return Nonqualified Intermediaries If you are making a payment to an NQI, foreign flow-through entity, or U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch that is using Form W-8IMY to transmit information about the branch's account holders or customers, you can treat the payment (or a part of the payment) as reliably associated with valid documentation from a specific payee only if, prior to making the payment: You can allocate the payment to a valid Form W-8IMY, You can reliably determine how much of the payment relates to valid documentation provided by a payee (a person that is not itself a foreign intermediary, flow- through entity, or U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch), and You have sufficient information to report the payment on Form 1042-S or Form 1099, if reporting is required. How to amend my 2011 tax return The NQI, flow-through entity, or U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch must give you certain information on a withholding statement that is associated with the Form W-8IMY. How to amend my 2011 tax return A withholding statement must be updated to keep the information accurate prior to each payment. How to amend my 2011 tax return Withholding statement. How to amend my 2011 tax return   In most cases, a withholding statement must contain the following information. How to amend my 2011 tax return The name, address, and TIN (if any, or if required) of each person for whom documentation is provided. How to amend my 2011 tax return The type of documentation (documentary evidence, Form W-8, or Form W-9) for every person for whom documentation has been provided. How to amend my 2011 tax return The status of the person for whom the documentation has been provided, such as whether the person is a U. How to amend my 2011 tax return S. How to amend my 2011 tax return exempt recipient (U. How to amend my 2011 tax return S. How to amend my 2011 tax return person exempt from Form 1099 reporting), U. How to amend my 2011 tax return S. How to amend my 2011 tax return non-exempt recipient (U. How to amend my 2011 tax return S. How to amend my 2011 tax return person subject to Form 1099 reporting), or a foreign person. How to amend my 2011 tax return For a foreign person, the statement must indicate whether the person is a beneficial owner or a foreign intermediary, flow-through entity, or a U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch. How to amend my 2011 tax return The type of recipient the person is, based on the recipient codes used on Form 1042-S. How to amend my 2011 tax return Information allocating each payment, by income type, to each payee (including U. How to amend my 2011 tax return S. How to amend my 2011 tax return exempt and U. How to amend my 2011 tax return S. How to amend my 2011 tax return non-exempt recipients) for whom documentation has been provided. How to amend my 2011 tax return The rate of withholding that applies to each foreign person to whom a payment is allocated. How to amend my 2011 tax return A foreign payee's country of residence. How to amend my 2011 tax return If a reduced rate of withholding is claimed, the basis for a reduced rate of withholding (for example, portfolio interest, treaty benefit, etc. How to amend my 2011 tax return ). How to amend my 2011 tax return In the case of treaty benefits claimed by entities, whether the applicable limitation on benefits statement and the statement that the foreign person derives the income for which treaty benefits are claimed, have been made. How to amend my 2011 tax return The name, address, and TIN (if any) of any other NQI, flow-through entity, or U. How to amend my 2011 tax return S. How to amend my 2011 tax return branch from which the payee will directly receive a payment. How to amend my 2011 tax return Any other information a withholding agent requests to fulfill its reporting and withholding obligations. How to amend my 2011 tax return Alternative procedure. How to amend my 2011 tax return   Under this alternative procedure the NQI can give you the information that allocates each payment to each foreign and U. How to amend my 2011 tax return S. How to amend my 2011 tax return exempt recipient by January 31 following the calendar year of payment, rather than prior to the payment being made as otherwise required. How to amend my 2011 tax return To take advantage of this procedure, the NQI must: (a) inform you, on its withholding statement, that it is using the alternative procedure; and (b) obtain your consent. How to amend my 2011 tax return You must receive the withholding statement with all the required information (other than item 5) prior to making the payment. How to amend my 2011 tax return    This alternative procedure cannot be used for payments to U. How to amend my 2011 tax return S. How to amend my 2011 tax return non-exempt recipients. How to amend my 2011 tax return Therefore, an NQI must always provide you with allocation information for all U. How to amend my 2011 tax return S. How to amend my 2011 tax return non-exempt recipients prior to a payment being made. How to amend my 2011 tax return Pooled withholding information. How to amend my 2011 tax return   If an NQI uses the alternative procedure, it must provide you with withholding rate pool information, as opposed to individual allocation information, prior to the payment of a reportable amount. How to amend my 2011 tax return A withholding rate pool is a payment of a single type of income (as determined by the income categories on Form 1042-S) that is subject to a single rate of withholding. How to amend my 2011 tax return For example, an NQI that has foreign account holders receiving royalties and dividends, both subject to the 15% rate, will provide you with information for two withholding rate pools (one for royalties and one for dividends). How to amend my 2011 tax return The NQI must provide you with the payee specific allocation information (information allocating each payment to each payee) by January 31 following the calendar year of payment. How to amend my 2011 tax return Failure to provide allocation information. How to amend my 2011 tax return   If an NQI fails to provide you with the payee specific allocation information for a withholding rate pool by January 31, you must not apply the alternative procedure to any of the NQI's withholding rate pools from that date forward. How to amend my 2011 tax return You must treat the payees as undocumented and apply the presumption rules, discussed later in Presumption Rules . How to amend my 2011 tax return An NQI is deemed to have f