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How To File 2010 Taxes In 2013

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How To File 2010 Taxes In 2013

How to file 2010 taxes in 2013 37. How to file 2010 taxes in 2013   Other Credits Table of Contents What's New Introduction Useful Items - You may want to see: Nonrefundable CreditsAdoption Credit Alternative Motor Vehicle Credit Alternative Fuel Vehicle Refueling Property Credit Credit to Holders of Tax Credit Bonds Foreign Tax Credit Mortgage Interest Credit Nonrefundable Credit for Prior Year Minimum Tax Plug-in Electric Drive Motor Vehicle Credit Residential Energy Credits Retirement Savings Contributions Credit (Saver's Credit) Refundable CreditsCredit for Tax on Undistributed Capital Gain Health Coverage Tax Credit Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld What's New Adoption credit. How to file 2010 taxes in 2013  The maximum adoption credit is $12,970 for 2013. How to file 2010 taxes in 2013 See Adoption Credit . How to file 2010 taxes in 2013 Plug-in electric vehicle credit. How to file 2010 taxes in 2013  This credit has expired. How to file 2010 taxes in 2013 Credit for prior year minimum tax. How to file 2010 taxes in 2013  The refundable portion of the credit for prior year minimum tax has expired. How to file 2010 taxes in 2013 Excess withholding of social security and railroad retirement tax. How to file 2010 taxes in 2013  Social security tax and tier 1 railroad retirement (RRTA) tax were both withheld during 2013 at a rate of 6. How to file 2010 taxes in 2013 2% of wages up to $113,700. How to file 2010 taxes in 2013 If you worked for more than one employer and had too much social security or RRTA tax withheld during 2013, you may be entitled to a credit for the excess withholding. How to file 2010 taxes in 2013 See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld . How to file 2010 taxes in 2013 Introduction This chapter discusses the following nonrefundable credits. How to file 2010 taxes in 2013 Adoption credit. How to file 2010 taxes in 2013 Alternative motor vehicle credit. How to file 2010 taxes in 2013 Alternative fuel vehicle refueling property credit. How to file 2010 taxes in 2013 Credit to holders of tax credit bonds. How to file 2010 taxes in 2013 Foreign tax credit. How to file 2010 taxes in 2013 Mortgage interest credit. How to file 2010 taxes in 2013 Nonrefundable credit for prior year minimum tax. How to file 2010 taxes in 2013 Plug-in electric drive motor vehicle credit. How to file 2010 taxes in 2013 Residential energy credits. How to file 2010 taxes in 2013 Retirement savings contributions credit. How to file 2010 taxes in 2013 This chapter also discusses the following refundable credits. How to file 2010 taxes in 2013 Credit for tax on undistributed capital gain. How to file 2010 taxes in 2013 Health coverage tax credit. How to file 2010 taxes in 2013 Credit for excess social security tax or railroad retirement tax withheld. How to file 2010 taxes in 2013 Several other credits are discussed in other chapters in this publication. How to file 2010 taxes in 2013 Child and dependent care credit (chapter 32). How to file 2010 taxes in 2013 Credit for the elderly or the disabled (chapter 33). How to file 2010 taxes in 2013 Child tax credit (chapter 34). How to file 2010 taxes in 2013 Education credits (chapter 35). How to file 2010 taxes in 2013 Earned income credit (chapter 36). How to file 2010 taxes in 2013 Nonrefundable credits. How to file 2010 taxes in 2013   The first part of this chapter, Nonrefundable Credits , covers ten credits that you subtract from your tax. How to file 2010 taxes in 2013 These credits may reduce your tax to zero. How to file 2010 taxes in 2013 If these credits are more than your tax, the excess is not refunded to you. How to file 2010 taxes in 2013 Refundable credits. How to file 2010 taxes in 2013   The second part of this chapter, Refundable Credits , covers three credits that are treated as payments and are refundable to you. How to file 2010 taxes in 2013 These credits are added to the federal income tax withheld and any estimated tax payments you made. How to file 2010 taxes in 2013 If this total is more than your total tax, the excess will be refunded to you. How to file 2010 taxes in 2013 Useful Items - You may want to see: Publication 502 Medical and Dental Expenses 514 Foreign Tax Credit for  Individuals 530 Tax Information for Homeowners 590 Individual Retirement Arrangements (IRAs) Form (and Instructions) 1116 Foreign Tax Credit 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains 5695 Residential Energy Credits 8396 Mortgage Interest Credit 8801 Credit For Prior Year Minimum Tax — Individuals, Estates, and Trusts 8828 Recapture of Federal Mortgage Subsidy 8839 Qualified Adoption Expenses 8880 Credit for Qualified Retirement Savings Contributions 8885 Health Coverage Tax Credit 8910 Alternative Motor Vehicle Credit 8911 Alternative Fuel Vehicle Refueling Property Credit 8912 Credit to Holders of Tax Credit Bonds 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit Nonrefundable Credits The credits discussed in this part of the chapter can reduce your tax. How to file 2010 taxes in 2013 However, if the total of these credits is more than your tax, the excess is not refunded to you. How to file 2010 taxes in 2013 Adoption Credit You may be able to take a tax credit of up to $12,970 for qualified expenses paid to adopt an eligible child. How to file 2010 taxes in 2013 The credit may be allowed for the adoption of a child with special needs even if you do not have any qualified expenses. How to file 2010 taxes in 2013 If your modified adjusted gross income (AGI) is more than $194,580, your credit is reduced. How to file 2010 taxes in 2013 If your modified AGI is $234,580 or more, you cannot take the credit. How to file 2010 taxes in 2013 Qualified adoption expenses. How to file 2010 taxes in 2013   Qualified adoption expenses are reasonable and necessary expenses directly related to, and whose principal purpose is for, the legal adoption of an eligible child. How to file 2010 taxes in 2013 These expenses include: Adoption fees, Court costs, Attorney fees, Travel expenses (including amounts spent for meals and lodging) while away from home, and Re-adoption expenses to adopt a foreign child. How to file 2010 taxes in 2013 Nonqualified expenses. How to file 2010 taxes in 2013   Qualified adoption expenses do not include expenses: That violate state or federal law, For carrying out any surrogate parenting arrangement, For the adoption of your spouse's child, For which you received funds under any federal, state, or local program, Allowed as a credit or deduction under any other federal income tax rule, or Paid or reimbursed by your employer or any other person or organization. How to file 2010 taxes in 2013 Eligible child. How to file 2010 taxes in 2013   The term “eligible child” means any individual: Under 18 years old, or Physically or mentally incapable of caring for himself or herself. How to file 2010 taxes in 2013 Child with special needs. How to file 2010 taxes in 2013   An eligible child is a child with special needs if all three of the following apply. How to file 2010 taxes in 2013 The child was a citizen or resident of the United States (including U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 possessions) at the time the adoption process began. How to file 2010 taxes in 2013 A state (including the District of Columbia) has determined that the child cannot or should not be returned to his or her parents' home. How to file 2010 taxes in 2013 The state has determined that the child will not be adopted unless assistance is provided to the adoptive parents. How to file 2010 taxes in 2013 Factors used by states to make this determination include: The child's ethnic background, The child's age, Whether the child is a member of a minority or sibling group, and Whether the child has a medical condition or a physical, mental, or emotional handicap. How to file 2010 taxes in 2013 When to take the credit. How to file 2010 taxes in 2013   Generally, until the adoption becomes final, you take the credit in the year after your qualified expenses were paid or incurred. How to file 2010 taxes in 2013 If the adoption becomes final, you take the credit in the year your expenses were paid or incurred. How to file 2010 taxes in 2013 See the Instructions for Form 8839 for more specific information on when to take the credit. How to file 2010 taxes in 2013 Foreign child. How to file 2010 taxes in 2013   If the child is not a U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 citizen or resident at the time the adoption process began, you cannot take the credit unless the adoption becomes final. How to file 2010 taxes in 2013 You treat all adoption expenses paid or incurred in years before the adoption becomes final as paid or incurred in the year it becomes final. How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013   Figure your 2013 nonrefundable credit and any carryforward to 2014 on Form 8839 and attach it to your Form 1040. How to file 2010 taxes in 2013 Include the credit in your total for Form 1040, line 53. How to file 2010 taxes in 2013 Check box c and enter “8839” on the line next to that box. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For more information, see the Instructions for Form 8839. How to file 2010 taxes in 2013 Alternative Motor Vehicle Credit You may be able to take this credit if you place a qualified fuel cell vehicle in service in 2013. How to file 2010 taxes in 2013 Amount of credit. How to file 2010 taxes in 2013   Generally, you can rely on the manufacturer's certification to the IRS that a specific make, model, and model year vehicle qualifies for the credit and the amount of the credit for which it qualifies. How to file 2010 taxes in 2013 In the case of a foreign manufacturer, you generally can rely on its domestic distributor's certification to the IRS. How to file 2010 taxes in 2013   Ordinarily the amount of the credit is 100% of the manufacturer's (or domestic distributor's) certification to the IRS of the maximum credit allowable. How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013   To take the credit, you must complete Form 8910 and attach it to your Form 1040. How to file 2010 taxes in 2013 Include the credit in your total for Form 1040, line 53. How to file 2010 taxes in 2013 Check box c and enter “8910” on the line next to that box. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For more information on the credit, see the Instructions for Form 8910. How to file 2010 taxes in 2013 Alternative Fuel Vehicle Refueling Property Credit You may be able to take a credit if you place qualified alternative fuel vehicle refueling property in service in 2013. How to file 2010 taxes in 2013 Qualified alternative fuel vehicle refueling property. How to file 2010 taxes in 2013   Qualified alternative fuel vehicle refueling property is any property (other than a building or its structural components) used for either of the following. How to file 2010 taxes in 2013 To store or dispense alternative fuel into the fuel tank of a motor vehicle propelled by the fuel, but only if the storage or dispensing is at the point where the fuel is delivered into that tank. How to file 2010 taxes in 2013 To recharge an electric vehicle, but only if the recharging property is located at the point where the vehicle is recharged. How to file 2010 taxes in 2013   The following are alternative fuels. How to file 2010 taxes in 2013 Any fuel at least 85% of the volume of which consists of one or more of the following: ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen. How to file 2010 taxes in 2013 Any mixture which consists of two or more of the following: biodiesel, diesel fuel, or kerosene, and at least 20% of the volume of which consists of biodiesel determined without regard to any kerosene. How to file 2010 taxes in 2013 Electricity. How to file 2010 taxes in 2013 Amount of the credit. How to file 2010 taxes in 2013   For personal use property, the credit is generally the smaller of 30% of the property's cost or $1,000. How to file 2010 taxes in 2013 For business use property, the credit is generally the smaller of 30% of the property's cost or $30,000. How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013   To take the credit, you must complete Form 8911 and attach it to your Form 1040. How to file 2010 taxes in 2013 Include the credit in your total for Form 1040, line 53. How to file 2010 taxes in 2013 Check box c and enter “8911” on the line next to that box. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For more information on the credit, see the Form 8911 instructions. How to file 2010 taxes in 2013 Credit to Holders of Tax Credit Bonds Tax credit bonds are bonds in which the holder receives a tax credit in lieu of some or all of the interest on the bond. How to file 2010 taxes in 2013 You may be able to take a credit if you are a holder of one of the following bonds. How to file 2010 taxes in 2013 Clean renewable energy bonds (issued before 2010). How to file 2010 taxes in 2013 New clean renewable energy bonds. How to file 2010 taxes in 2013 Qualified energy conservation bonds. How to file 2010 taxes in 2013 Qualified school construction bonds. How to file 2010 taxes in 2013 Qualified zone academy bonds. How to file 2010 taxes in 2013 Build America bonds. How to file 2010 taxes in 2013 In some instances, an issuer may elect to receive a credit for interest paid on the bond. How to file 2010 taxes in 2013 If the issuer makes this election, you cannot also claim a credit. How to file 2010 taxes in 2013 Interest income. How to file 2010 taxes in 2013   The amount of any tax credit allowed (figured before applying tax liability limits) must be included as interest income on your tax return. How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013   Complete Form 8912 and attach it to your Form 1040. How to file 2010 taxes in 2013 Include the credit in your total for Form 1040, line 53. How to file 2010 taxes in 2013 Check box c and enter “8912” on the line next to that box. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For more information, see the Instructions for Form 8912. How to file 2010 taxes in 2013 Foreign Tax Credit You generally can choose to take income taxes you paid or accrued during the year to a foreign country or U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 possession as a credit against your U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 income tax. How to file 2010 taxes in 2013 Or, you can deduct them as an itemized deduction (see chapter 22). How to file 2010 taxes in 2013 You cannot take a credit (or deduction) for foreign income taxes paid on income that you exclude from U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 tax under any of the following. How to file 2010 taxes in 2013 Foreign earned income exclusion. How to file 2010 taxes in 2013 Foreign housing exclusion. How to file 2010 taxes in 2013 Income from Puerto Rico exempt from U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 tax. How to file 2010 taxes in 2013 Possession exclusion. How to file 2010 taxes in 2013 Limit on the credit. How to file 2010 taxes in 2013   Unless you can elect not to file Form 1116 (see Exception , later), your foreign tax credit cannot be more than your U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 tax liability (Form 1040, line 44), multiplied by a fraction. How to file 2010 taxes in 2013 The numerator of the fraction is your taxable income from sources outside the United States. How to file 2010 taxes in 2013 The denominator is your total taxable income from U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 and foreign sources. How to file 2010 taxes in 2013 See Publication 514 for more information. How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013   Complete Form 1116 and attach it to your Form 1040. How to file 2010 taxes in 2013 Enter the credit on Form 1040, line 47. How to file 2010 taxes in 2013 Exception. How to file 2010 taxes in 2013   You do not have to complete Form 1116 to take the credit if all of the following apply. How to file 2010 taxes in 2013 All of your gross foreign source income was from interest and dividends and all of that income and the foreign tax paid on it were reported to you on Form 1099-INT, Form 1099-DIV, or Schedule K-1 (or substitute statement). How to file 2010 taxes in 2013 If you had dividend income from shares of stock, you held those shares for at least 16 days. How to file 2010 taxes in 2013 You are not filing Form 4563 or excluding income from sources within Puerto Rico. How to file 2010 taxes in 2013 The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly). How to file 2010 taxes in 2013 All of your foreign taxes were: Legally owed and not eligible for a refund, and Paid to countries that are recognized by the United States and do not support terrorism. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For more information on the credit and these requirements, see the Instructions for Form 1116. How to file 2010 taxes in 2013 Mortgage Interest Credit The mortgage interest credit is intended to help lower-income individuals own a home. How to file 2010 taxes in 2013 If you qualify, you can take the credit each year for part of the home mortgage interest you pay. How to file 2010 taxes in 2013 Who qualifies. How to file 2010 taxes in 2013   You may be eligible for the credit if you were issued a qualified mortgage credit certificate (MCC) from your state or local government. How to file 2010 taxes in 2013 Generally, an MCC is issued only in connection with a new mortgage for the purchase of your main home. How to file 2010 taxes in 2013 Amount of credit. How to file 2010 taxes in 2013   Figure your credit on Form 8396. How to file 2010 taxes in 2013 If your mortgage loan amount is equal to (or smaller than) the certified indebtedness (loan) amount shown on your MCC, enter on Form 8396, line 1, all the interest you paid on your mortgage during the year. How to file 2010 taxes in 2013   If your mortgage loan amount is larger than the certified indebtedness amount shown on your MCC, you can figure the credit on only part of the interest you paid. How to file 2010 taxes in 2013 To find the amount to enter on line 1, multiply the total interest you paid during the year on your mortgage by the following fraction. How to file 2010 taxes in 2013      Certified indebtedness amount on your MCC     Original amount of your mortgage   Limit based on credit rate. How to file 2010 taxes in 2013   If the certificate credit rate is more than 20%, the credit you are allowed cannot be more than $2,000. How to file 2010 taxes in 2013 If two or more persons (other than a married couple filing a joint return) hold an interest in the home to which the MCC relates, this $2,000 limit must be divided based on the interest held by each person. How to file 2010 taxes in 2013 See Publication 530 for more information. How to file 2010 taxes in 2013 Carryforward. How to file 2010 taxes in 2013   Your credit (after applying the limit based on the credit rate) is also subject to a limit based on your tax that is figured using Form 8396. How to file 2010 taxes in 2013 If your allowable credit is reduced because of this tax liability limit, you can carry forward the unused portion of the credit to the next 3 years or until used, whichever comes first. How to file 2010 taxes in 2013   If you are subject to the $2,000 limit because your certificate credit rate is more than 20%, you cannot carry forward any amount more than $2,000 (or your share of the $2,000 if you must divide the credit). How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013    Figure your 2013 credit and any carryforward to 2014 on Form 8396, and attach it to your Form 1040. How to file 2010 taxes in 2013 Be sure to include any credit carryforward from 2010, 2011, and 2012. How to file 2010 taxes in 2013   Include the credit in your total for Form 1040, line 53. How to file 2010 taxes in 2013 Check box c and enter “8396” on the line next to that box. How to file 2010 taxes in 2013 Reduced home mortgage interest deduction. How to file 2010 taxes in 2013   If you itemize your deductions on Schedule A (Form 1040), you must reduce your home mortgage interest deduction by the amount of the mortgage interest credit shown on Form 8396, line 3. How to file 2010 taxes in 2013 You must do this even if part of that amount is to be carried forward to 2014. How to file 2010 taxes in 2013 For more information about the home mortgage interest deduction, see chapter 23. How to file 2010 taxes in 2013 Recapture of federal mortgage subsidy. How to file 2010 taxes in 2013   If you received an MCC with your mortgage loan, you may have to recapture (pay back) all or part of the benefit you received from that program. How to file 2010 taxes in 2013 The recapture may be required if you sell or dispose of your home at a gain during the first 9 years after the date you closed your mortgage loan. How to file 2010 taxes in 2013 See the Instructions for Form 8828 and chapter 15 for more information. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For more information on the credit, see the Form 8396 instructions. How to file 2010 taxes in 2013 Nonrefundable Credit for Prior Year Minimum Tax The tax laws give special treatment to some kinds of income and allow special deductions and credits for some kinds of expenses. How to file 2010 taxes in 2013 If you benefit from these laws, you may have to pay at least a minimum amount of tax in addition to any other tax on these items. How to file 2010 taxes in 2013 This is called the alternative minimum tax. How to file 2010 taxes in 2013 The special treatment of some items of income and expenses only allows you to postpone paying tax until a later year. How to file 2010 taxes in 2013 If in prior years you paid alternative minimum tax because of these tax postponement items, you may be able to take a credit for prior year minimum tax against your current year's regular tax. How to file 2010 taxes in 2013 You may be able to take a credit against your regular tax if for 2012 you had: An alternative minimum tax liability and adjustments or preferences other than exclusion items, A minimum tax credit that you are carrying forward to 2013, or An unallowed qualified electric vehicle credit. How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013    Figure your 2013 nonrefundable credit (if any), and any carryforward to 2014 on Form 8801, and attach it to your Form 1040. How to file 2010 taxes in 2013 Include the credit in your total for Form 1040, line 53, and check box b. How to file 2010 taxes in 2013 You can carry forward any unused credit for prior year minimum tax to later years until it is completely used. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For more information on the credit, see the Instructions for Form 8801. How to file 2010 taxes in 2013 Plug-in Electric Drive Motor Vehicle Credit You may be able to take this credit if you placed in service for business or personal use a qualified plug-in electric drive motor vehicle or a qualified two- or three-wheeled plug-in electric vehicle in 2013 and you meet some other requirements. How to file 2010 taxes in 2013 Qualified plug-in electric drive motor vehicle. How to file 2010 taxes in 2013   This is a new vehicle with at least four wheels that: Is propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of not less than 4 kilowatt hours and is capable of being recharged from an external source of electricity, and Has a gross vehicle weight of less than 14,000 pounds. How to file 2010 taxes in 2013 Qualified two- or three-wheeled plug-in electric vehicle. How to file 2010 taxes in 2013   This is a new vehicle with two or three wheels that: Is capable of achieving a speed of 45 miles per hour or greater, Is propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of not less than 2. How to file 2010 taxes in 2013 5 kilowatt hours and is capable of being recharged from an external source of electricity, and Has a gross vehicle weight of less than 14,000 pounds. How to file 2010 taxes in 2013 Certification and other requirements. How to file 2010 taxes in 2013   Generally, you can rely on the manufacturer's (or, in the case of a foreign manufacturer, its domestic distributor's) certification to the IRS that a specific make, model, and model year vehicle qualifies for the credit and, if applicable, the amount of the credit for which it qualifies. How to file 2010 taxes in 2013 However, if the IRS publishes an announcement that the certification for any specific make, model, and model year vehicle has been withdrawn, you cannot rely on the certification for such a vehicle purchased after the date of publication of the withdrawal announcement. How to file 2010 taxes in 2013   The following requirements must also be met to qualify for the credit. How to file 2010 taxes in 2013 You are the owner of the vehicle. How to file 2010 taxes in 2013 If the vehicle is leased, only the lessor, and not the lessee, is entitled to the credit. How to file 2010 taxes in 2013 You placed the vehicle in service during 2013. How to file 2010 taxes in 2013 The vehicle is manufactured primarily for use on public streets, roads, and highways. How to file 2010 taxes in 2013 The original use of the vehicle began with you. How to file 2010 taxes in 2013 You acquired the vehicle for your use or to lease to others, and not for resale. How to file 2010 taxes in 2013 In the case of the qualified two- or three-wheeled plug-in electric vehicle, the vehicle is acquired after 2011 and before 2014. How to file 2010 taxes in 2013 You use the vehicle primarily in the United States. How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013   To take the credit, you must complete Form 8936 and attach it to your Form 1040. How to file 2010 taxes in 2013 Include the credit in your total for Form 1040, line 53. How to file 2010 taxes in 2013 Check box c and enter “8936” on the line next to that box. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For more information on the credit, see the Form 8936 instructions. How to file 2010 taxes in 2013 Residential Energy Credits You may be able to take one or both of the following credits if you made energy saving improvements to your home located in the United States in 2013. How to file 2010 taxes in 2013 Nonbusiness energy property credit. How to file 2010 taxes in 2013 Residential energy efficient property credit. How to file 2010 taxes in 2013 If you are a member of a condominium management association for a condominium you own or a tenant-stockholder in a cooperative housing corporation, you are treated as having paid your proportionate share of any costs of the association or corporation for purposes of these credits. How to file 2010 taxes in 2013 Nonbusiness energy property credit. How to file 2010 taxes in 2013   You may be able to take a credit equal to the sum of: 10% of the amount paid or incurred for qualified energy efficiency improvements installed during 2013, and Any residential energy property costs paid or incurred in 2013. How to file 2010 taxes in 2013   There is a lifetime limit of $500 for all years after 2005, of which only $200 can be for windows; $50 for any advanced main air circulating fan; $150 for any qualified natural gas, propane, or oil furnace or hot water boiler; and $300 for any item of energy efficient building property. How to file 2010 taxes in 2013    If the total of nonbusiness energy property credits you have taken in previous years (after 2005) is more than $500, you cannot take this credit in 2013. How to file 2010 taxes in 2013   Qualified energy efficiency improvements are the following improvements that are new, can be expected to remain in use at least 5 years, and meet certain requirements for energy efficiency. How to file 2010 taxes in 2013 Any insulation material or system that is specifically and primarily designed to reduce heat loss or gain of a home. How to file 2010 taxes in 2013 Exterior window (including skylights). How to file 2010 taxes in 2013 Exterior doors. How to file 2010 taxes in 2013 Any metal or asphalt roof that has appropriate pigmented coatings or cooling granules specifically and primarily designed to reduce heat gain of the home. How to file 2010 taxes in 2013   Residential energy property is any of the following. How to file 2010 taxes in 2013 Certain electric heat pump water heaters; electric heat pumps; central air conditioners; natural gas, propane, or oil water heater; and stoves that use biomass fuel. How to file 2010 taxes in 2013 Qualified natural gas, propane, or oil furnaces; and qualified natural gas, propane, or oil hot water boilers. How to file 2010 taxes in 2013 Certain advanced main air circulating fans used in natural gas, propane, or oil furnaces. How to file 2010 taxes in 2013 Residential energy efficient property credit. How to file 2010 taxes in 2013   You may be able to take a credit of 30% of your costs of qualified solar electric property, solar water heating property, fuel cell property, small wind energy property, and geothermal heat pump property. How to file 2010 taxes in 2013 The credit amount for costs paid for qualified fuel cell property is limited to $500 for each one-half kilowatt of capacity of the property. How to file 2010 taxes in 2013 Basis reduction. How to file 2010 taxes in 2013   You must reduce the basis of your home by the amount of any credit allowed. How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013   Complete Form 5695 and attach it to your Form 1040. How to file 2010 taxes in 2013 Enter the credit on Form 1040, line 52. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For more information on these credits, see the Form 5695 instructions. How to file 2010 taxes in 2013 Retirement Savings Contributions Credit (Saver's Credit) You may be able to take this credit if you, or your spouse if filing jointly, made: Contributions (other than rollover contributions) to a traditional or Roth IRA, Elective deferrals to a 401(k) or 403(b) plan (including designated Roth contributions) or to a governmental 457, SEP, or SIMPLE plan, Voluntary employee contributions to a qualified retirement plan (including the federal Thrift Savings Plan), or Contributions to a 501(c)(18)(D) plan. How to file 2010 taxes in 2013 However, you cannot take the credit if either of the following applies. How to file 2010 taxes in 2013 The amount on Form 1040, line 38, or Form 1040A, line 22, is more than $29,500 ($44,250 if head of household; $59,000 if married filing jointly). How to file 2010 taxes in 2013 The person(s) who made the qualified contribution or elective deferral (a) was born after January 1, 1996, (b) is claimed as a dependent on someone else's 2013 tax return, or (c) was a student (defined next). How to file 2010 taxes in 2013 Student. How to file 2010 taxes in 2013   You were a student if during any part of 5 calendar months of 2013 you: Were enrolled as a full-time student at a school, or Took a full-time, on-farm training course given by a school or a state, county, or local government agency. How to file 2010 taxes in 2013 School. How to file 2010 taxes in 2013   A school includes a technical, trade, or mechanical school. How to file 2010 taxes in 2013 It does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013   Figure the credit on Form 8880. How to file 2010 taxes in 2013 Enter the credit on your Form 1040, line 50, or your Form 1040A, line 32, and attach Form 8880 to your return. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For more information on the credit, see the Form 8880 instructions. How to file 2010 taxes in 2013 Refundable Credits The credits discussed in this part of the chapter are treated as payments of tax. How to file 2010 taxes in 2013 If the total of these credits, withheld federal income tax, and estimated tax payments is more than your total tax, the excess can be refunded to you. How to file 2010 taxes in 2013 Credit for Tax on Undistributed Capital Gain You must include in your income any amounts that regulated investment companies (commonly called mutual funds) or real estate investment trusts (REITs) allocated to you as capital gain distributions, even if you did not actually receive them. How to file 2010 taxes in 2013 If the mutual fund or REIT paid a tax on the capital gain, you are allowed a credit for the tax since it is considered paid by you. How to file 2010 taxes in 2013 The mutual fund or REIT will send you Form 2439 showing your share of the undistributed capital gains and the tax paid, if any. How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013   To take the credit, attach Copy B of Form 2439 to your Form 1040. How to file 2010 taxes in 2013 Include the amount from box 2 of your Form 2439 in the total for Form 1040, line 71, and check box a. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   See Capital Gain Distributions in chapter 8 for more information on undistributed capital gains. How to file 2010 taxes in 2013 Health Coverage Tax Credit You may be able to take this credit for any month in which all the following statements were true on the first day of the month. How to file 2010 taxes in 2013 You were an eligible trade adjustment assistance (TAA) recipient, alternative TAA (ATAA) recipient, reemployment TAA (RTAA) recipient, or Pension Benefit Guaranty Corporation (PBGC) pension recipient (defined later); or you were a qualified family member of one of these individuals when the individual died or you finalized a divorce with one of these individuals. How to file 2010 taxes in 2013 You and/or your family members were covered by a qualified health insurance plan for which you paid the entire premiums, or your portion of the premiums, directly to your health plan or to “U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 Treasury–HCTC. How to file 2010 taxes in 2013 ” You were not enrolled in Medicare Part A, B, or C, or you were enrolled in Medicare but your family member(s) qualified for the HCTC. How to file 2010 taxes in 2013 You were not enrolled in Medicaid or the Children's Health Insurance Program (CHIP). How to file 2010 taxes in 2013 You were not enrolled in the Federal Employees Health Benefits program (FEHBP) or eligible to receive benefits under the U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 military health system (TRICARE). How to file 2010 taxes in 2013 You were not imprisoned under federal, state, or local authority. How to file 2010 taxes in 2013 Your employer did not pay 50% or more of the cost of coverage. How to file 2010 taxes in 2013 You did not receive a 65% COBRA premium reduction from your former employer or COBRA administrator. How to file 2010 taxes in 2013 But, you cannot take the credit if you can be claimed as a dependent on someone else's 2013 tax return. How to file 2010 taxes in 2013 If you meet all of these conditions, you may be able to take a credit of up to 72. How to file 2010 taxes in 2013 5% of the amount you paid directly to a qualified health plan for you and any qualifying family members. How to file 2010 taxes in 2013 You cannot take the credit for insurance premiums on coverage that was actually paid for with a National Emergency Grant. How to file 2010 taxes in 2013 The amount you paid for qualified health insurance coverage must be reduced by any Archer MSA and health savings account distributions used to pay for the coverage. How to file 2010 taxes in 2013 You can take this credit on your tax return or have it paid on your behalf in advance to your insurance company. How to file 2010 taxes in 2013 If the credit is paid on your behalf in advance, that amount will reduce the amount of the credit you can take on your tax return. How to file 2010 taxes in 2013 TAA recipient. How to file 2010 taxes in 2013   You were an eligible TAA recipient on the first day of the month if, for any day in that month or the prior month, you: Received a trade readjustment allowance, or Would have been entitled to receive such an allowance except that you had not exhausted all rights to any unemployment insurance (except additional compensation that is funded by a state and is not reimbursed from any federal funds) to which you were entitled (or would be entitled if you applied). How to file 2010 taxes in 2013 Example. How to file 2010 taxes in 2013 You received a trade adjustment allowance for January 2013. How to file 2010 taxes in 2013 You were an eligible TAA recipient on the first day of January and February. How to file 2010 taxes in 2013 Alternative TAA recipient. How to file 2010 taxes in 2013   You were an eligible alternative TAA recipient on the first day of the month if, for that month or the prior month, you received benefits under an alternative trade adjustment assistance program for older workers established by the Department of Labor. How to file 2010 taxes in 2013 Example. How to file 2010 taxes in 2013 You received benefits under an alternative trade adjustment assistance program for older workers for October 2013. How to file 2010 taxes in 2013 The program was established by the Department of Labor. How to file 2010 taxes in 2013 You were an eligible alternative TAA recipient on the first day of October and November. How to file 2010 taxes in 2013 RTAA recipient. How to file 2010 taxes in 2013   You were an eligible RTAA recipient on the first day of the month if, for that month or the prior month, you received benefits under a reemployment trade adjustment assistance program for older workers established by the Department of Labor. How to file 2010 taxes in 2013 PBGC pension recipient. How to file 2010 taxes in 2013   You were an eligible PBGC pension recipient on the first day of the month, if both of the following apply. How to file 2010 taxes in 2013 You were age 55 or older on the first day of the month. How to file 2010 taxes in 2013 You received a benefit for that month paid by the PBGC under title IV of the Employee Retirement Income Security Act of 1974 (ERISA). How to file 2010 taxes in 2013 If you received a lump-sum payment from the PBGC after August 5, 2002, you meet item (2) above for any month that you would have received a PBGC benefit if you had not received the lump-sum payment. How to file 2010 taxes in 2013 How to take the credit. How to file 2010 taxes in 2013   To take the credit, complete Form 8885 and attach it to your Form 1040. How to file 2010 taxes in 2013 Include your credit in the total for Form 1040, line 71, and check box c. How to file 2010 taxes in 2013   You must attach health insurance bills (or COBRA payment coupons) and proof of payment for any amounts you include on Form 8885, line 2. How to file 2010 taxes in 2013 For details, see Publication 502 or Form 8885. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For definitions and special rules, including those relating to qualified health insurance plans, qualifying family members, the effect of certain life events, and employer-sponsored health insurance plans, see Publication 502 and the Form 8885 instructions. How to file 2010 taxes in 2013 Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld Most employers must withhold social security tax from your wages. How to file 2010 taxes in 2013 If you work for a railroad employer, that employer must withhold tier 1 railroad retirement (RRTA) tax and tier 2 RRTA tax. How to file 2010 taxes in 2013 If you worked for two or more employers in 2013, you may have had too much social security tax withheld from your pay. How to file 2010 taxes in 2013 If one or more of those employers was a railroad employer, too much tier 1 RRTA tax may also have been withheld at the 6. How to file 2010 taxes in 2013 2% rate. How to file 2010 taxes in 2013 You can claim the excess social security or tier 1 RRTA tax as a credit against your income tax when you file your return. How to file 2010 taxes in 2013 For the tier 1 RRTA tax, only use the portion of the tier 1 RRTA tax that was taxed at the 6. How to file 2010 taxes in 2013 2% rate when figuring if excess tier 1 RRTA tax was withheld; do not include any portion of the tier 1 RRTA tax that was withheld at the Medicare tax rate (1. How to file 2010 taxes in 2013 45%) or the Additional Medicare Tax rate (. How to file 2010 taxes in 2013 9%). How to file 2010 taxes in 2013 The following table shows the maximum amount of wages subject to tax and the maximum amount of tax that should have been withheld for 2013. How to file 2010 taxes in 2013 Type of tax Maximum  wages subject to tax Maximum tax that should have been withheld Social security or RRTA tier 1 $113,700 $7,049. How to file 2010 taxes in 2013 40 RRTA tier 2 $84,300 $3,709. How to file 2010 taxes in 2013 20 All wages are subject to Medicare tax withholding. How to file 2010 taxes in 2013   Use Form 843, Claim for Refund and Request for Abatement, to claim a refund of excess tier 2 RRTA tax. How to file 2010 taxes in 2013 Be sure to attach a copy of all of your W-2 forms. How to file 2010 taxes in 2013 Use Worksheet 3-3 in Publication 505, Tax Withholding and Estimated Tax, to help you figure the excess amount. How to file 2010 taxes in 2013 Employer's error. How to file 2010 taxes in 2013   If any one employer withheld too much social security or tier 1 RRTA tax, you cannot take the excess as a credit against your income tax. How to file 2010 taxes in 2013 The employer should adjust the tax for you. How to file 2010 taxes in 2013 If the employer does not adjust the overcollection, you can file a claim for refund using Form 843. How to file 2010 taxes in 2013 Joint return. How to file 2010 taxes in 2013   If you are filing a joint return, you cannot add the social security or tier 1 RRTA tax withheld from your spouse's wages to the amount withheld from your wages. How to file 2010 taxes in 2013 Figure the withholding separately for you and your spouse to determine if either of you has excess withholding. How to file 2010 taxes in 2013 How to figure the credit if you did not work for a railroad. How to file 2010 taxes in 2013   If you did not work for a railroad during 2013, figure the credit as follows: 1. How to file 2010 taxes in 2013 Add all social security tax withheld (but not more than $7,049. How to file 2010 taxes in 2013 40 for each employer). How to file 2010 taxes in 2013 Enter the total here   2. How to file 2010 taxes in 2013 Enter any uncollected social security tax on tips or group-term life insurance included in the total on Form 1040, line 60, identified by “UT”   3. How to file 2010 taxes in 2013 Add lines 1 and 2. How to file 2010 taxes in 2013 If $7,049. How to file 2010 taxes in 2013 40 or less, stop here. How to file 2010 taxes in 2013 You cannot take  the credit   4. How to file 2010 taxes in 2013 Social security tax limit 7,049. How to file 2010 taxes in 2013 40 5. How to file 2010 taxes in 2013 Credit. How to file 2010 taxes in 2013 Subtract line 4 from line 3. How to file 2010 taxes in 2013 Enter the result here and on Form 1040, line 69 (or Form 1040A, line 41) $ Example. How to file 2010 taxes in 2013 You are married and file a joint return with your spouse who had no gross income in 2013. How to file 2010 taxes in 2013 During 2013, you worked for the Brown Technology Company and earned $60,000 in wages. How to file 2010 taxes in 2013 Social security tax of $3,720 was withheld. How to file 2010 taxes in 2013 You also worked for another employer in 2013 and earned $55,000 in wages. How to file 2010 taxes in 2013 $3,410 of social security tax was withheld from these wages. How to file 2010 taxes in 2013 Because you worked for more than one employer and your total wages were more than $113,700, you can take a credit of $80. How to file 2010 taxes in 2013 60 for the excess social security tax withheld. How to file 2010 taxes in 2013 1. How to file 2010 taxes in 2013 Add all social security tax withheld (but not more than $7,049. How to file 2010 taxes in 2013 40 for each employer). How to file 2010 taxes in 2013 Enter the total here $7,130. How to file 2010 taxes in 2013 00 2. How to file 2010 taxes in 2013 Enter any uncollected social security tax on tips or group-term life insurance included in the total on Form 1040, line 60, identified by “UT” -0- 3. How to file 2010 taxes in 2013 Add lines 1 and 2. How to file 2010 taxes in 2013 If $7,049. How to file 2010 taxes in 2013 40 or less, stop here. How to file 2010 taxes in 2013 You cannot take the credit 7,130. How to file 2010 taxes in 2013 00 4. How to file 2010 taxes in 2013 Social security tax limit 7,049. How to file 2010 taxes in 2013 40 5. How to file 2010 taxes in 2013 Credit. How to file 2010 taxes in 2013 Subtract line 4 from line 3. How to file 2010 taxes in 2013 Enter the result here and on Form 1040, line 69 (or Form 1040A, line 41) $80. How to file 2010 taxes in 2013 60 How to figure the credit if you worked for a railroad. How to file 2010 taxes in 2013   If you were a railroad employee at any time during 2013, figure the credit as follows: 1. How to file 2010 taxes in 2013 Add all social security and tier 1 RRTA tax withheld at the 6. How to file 2010 taxes in 2013 2% rate (but not more than $7,049. How to file 2010 taxes in 2013 40 for each employer). How to file 2010 taxes in 2013 Enter the total here   2. How to file 2010 taxes in 2013 Enter any uncollected social security and tier 1 RRTA tax on tips or group-term life insurance included in the total on Form 1040, line 60, identified by “UT”   3. How to file 2010 taxes in 2013 Add lines 1 and 2. How to file 2010 taxes in 2013 If $7,049. How to file 2010 taxes in 2013 40 or less, stop here. How to file 2010 taxes in 2013 You cannot take  the credit   4. How to file 2010 taxes in 2013 Social security and tier 1 RRTA  tax limit 7,049. How to file 2010 taxes in 2013 40 5. How to file 2010 taxes in 2013 Credit. How to file 2010 taxes in 2013 Subtract line 4 from line 3. How to file 2010 taxes in 2013 Enter the result here and on Form 1040, line 69 (or Form 1040A, line 41) $ How to take the credit. How to file 2010 taxes in 2013   Enter the credit on Form 1040, line 69, or include it in the total for Form 1040A, line 41. How to file 2010 taxes in 2013 More information. How to file 2010 taxes in 2013   For more information on the credit, see Publication 505. How to file 2010 taxes in 2013 Prev  Up  Next   Home   More Online Publications
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The How To File 2010 Taxes In 2013

How to file 2010 taxes in 2013 2. How to file 2010 taxes in 2013   American Opportunity Credit Table of Contents Introduction Can You Claim the CreditWho Can Claim the Credit Who Cannot Claim the Credit What Expenses QualifyQualified Education Expenses No Double Benefit Allowed Expenses That Do Not Qualify Who Is an Eligible StudentException. How to file 2010 taxes in 2013 Who Can Claim a Dependent's Expenses Figuring the CreditEffect of the Amount of Your Income on the Amount of Your Credit Refundable Part of Credit Claiming the Credit Introduction For 2013, there are two tax credits available to help you offset the costs of higher education by reducing the amount of your income tax. How to file 2010 taxes in 2013 They are the American opportunity credit (this chapter) and the lifetime learning credit ( chapter 3 ). How to file 2010 taxes in 2013 This chapter explains: Who can claim the American opportunity credit, What expenses qualify for the credit, Who is an eligible student, Who can claim a dependent's expenses, How to figure the credit, How to claim the credit, and When the credit must be repaid. How to file 2010 taxes in 2013 What is the tax benefit of the American opportunity credit. How to file 2010 taxes in 2013   For the tax year, you may be able to claim an American opportunity credit of up to $2,500 for qualified education expenses paid for each eligible student. How to file 2010 taxes in 2013   A tax credit reduces the amount of income tax you may have to pay. How to file 2010 taxes in 2013 Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself. How to file 2010 taxes in 2013 Forty percent of the American opportunity credit may be refundable. How to file 2010 taxes in 2013 This means that if the refundable portion of your credit is more than your tax, the excess will be refunded to you. How to file 2010 taxes in 2013   Your allowable American opportunity credit may be limited by the amount of your income. How to file 2010 taxes in 2013 Also, the nonrefundable part of the credit may be limited by the amount of your tax. How to file 2010 taxes in 2013 Overview of the American opportunity credit. How to file 2010 taxes in 2013   See Table 2-1, Overview of the American Opportunity Credit , for the basics of this credit. How to file 2010 taxes in 2013 The details are discussed in this chapter. How to file 2010 taxes in 2013 Can you claim more than one education credit this year. How to file 2010 taxes in 2013   For each student, you can elect for any year only one of the credits. How to file 2010 taxes in 2013 For example, if you elect to take the American opportunity credit for a child on your 2013 tax return, you cannot use that same child's qualified education expenses to figure the lifetime learning credit for 2013. How to file 2010 taxes in 2013   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity credit on a per-student, per-year basis. How to file 2010 taxes in 2013 If you pay qualified education expenses for a student (or students) for whom you do not claim the American opportunity credit, you can use the adjusted qualified education expenses of that student (or those students) in figuring your lifetime learning credit. How to file 2010 taxes in 2013 This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. How to file 2010 taxes in 2013 Differences between the American opportunity and lifetime learning credits. How to file 2010 taxes in 2013   There are several differences between these two credits. How to file 2010 taxes in 2013 For example, you can claim the American opportunity credit based on the same student's expenses for no more than 4 tax years, which includes any tax years you claimed the Hope Scholarship Credit for that student. How to file 2010 taxes in 2013 However, there is no limit on the number of years for which you can claim a lifetime learning credit based on the same student's expenses. How to file 2010 taxes in 2013 The differences between these credits are shown in Appendix B, Highlights of Education Tax Benefits for Tax Year 2013 near the end of this publication. How to file 2010 taxes in 2013 If you claim the American opportunity credit for any student, you can choose between using that student's adjusted qualified education expenses for the American opportunity credit or the lifetime learning credit. How to file 2010 taxes in 2013 If you have the choice, the American opportunity credit will always be greater than the lifetime learning credit. How to file 2010 taxes in 2013 Table 2-1. How to file 2010 taxes in 2013 Overview of the American Opportunity Credit Maximum credit Up to $2,500 credit per eligible student Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly; $90,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable; the rest is nonrefundable Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) Hope Scholarship Credit was claimed) Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period that begins during the tax year Felony drug conviction As of the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Can You Claim the Credit The following rules will help you determine if you are eligible to claim the American opportunity credit on your tax return. How to file 2010 taxes in 2013 Who Can Claim the Credit Generally, you can claim the American opportunity credit if all three of the following requirements are met. How to file 2010 taxes in 2013 You pay qualified education expenses of higher education. How to file 2010 taxes in 2013 You pay the education expenses for an eligible student. How to file 2010 taxes in 2013 The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. How to file 2010 taxes in 2013 Student qualifications. How to file 2010 taxes in 2013   Generally, you can take the American opportunity credit for a student only if all of the following four requirements are met. How to file 2010 taxes in 2013 As of the beginning of 2013, the student had not completed the first four years of postsecondary education (generally, the freshman through senior years of college), as determined by the eligible educational institution. How to file 2010 taxes in 2013 For this purpose, do not include academic credit awarded solely because of the student's performance on proficiency examinations. How to file 2010 taxes in 2013 Neither the American opportunity credit nor the Hope Scholarship Credit has been claimed (by you or anyone else) for this student for any four tax years before 2013. How to file 2010 taxes in 2013 If the American opportunity credit (and Hope Scholarship Credit) has been claimed for this student for any three or fewer tax years before 2013, this requirement is met. How to file 2010 taxes in 2013 For at least one academic period beginning (or treated as beginning) in 2013, the student both: Was enrolled in a program that leads to a degree, certificate, or other recognized educational credential; and Carried at least one-half the normal full-time workload for his or her course of study. How to file 2010 taxes in 2013 The standard for what is half of the normal full-time work load is determined by each eligible educational institution. How to file 2010 taxes in 2013 However, the standard may not be lower than any of those established by the U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 Department of Education under the Higher Education Act of 1965. How to file 2010 taxes in 2013 For purposes of whether the student satisfies this third requirement for 2013, treat an academic period beginning in the first three months of 2014 as if it began in 2013 if qualified education expenses for the student were paid in 2013 for that academic period. How to file 2010 taxes in 2013 See Prepaid expenses, later. How to file 2010 taxes in 2013 As of the end of 2013, the student had not been convicted of a federal or state felony for possessing or distributing a controlled substance. How to file 2010 taxes in 2013 Example 1. How to file 2010 taxes in 2013 Sharon was eligible for the Hope Scholarship Credit for 2007 and 2008 and for the American opportunity credit for 2010 and 2012. How to file 2010 taxes in 2013 Her parents claimed the Hope Scholarship Credit for Sharon on their tax returns for 2007 and 2008 and claimed the American opportunity credit for Sharon on their 2010 tax return. How to file 2010 taxes in 2013 Sharon claimed the American opportunity credit on her 2012 tax return. How to file 2010 taxes in 2013 The American opportunity credit and Hope Scholarship Credit have been claimed for Sharon for four tax years before 2013. How to file 2010 taxes in 2013 Therefore, the American opportunity credit cannot be claimed by Sharon for 2013. How to file 2010 taxes in 2013 If Sharon were to file Form 8863 for 2013, she would check “Yes” for Part III, line 23, and would be eligible to claim only the lifetime learning credit. How to file 2010 taxes in 2013 Example 2. How to file 2010 taxes in 2013 Wilbert was eligible for the American opportunity credit for 2009, 2010, 2011, and 2013. How to file 2010 taxes in 2013 His parents claimed the American opportunity credit for Wilbert on their tax returns for 2009, 2010, and 2011. How to file 2010 taxes in 2013 No one claimed an American opportunity credit or Hope Scholarship Credit for Wilbert for any other tax year. How to file 2010 taxes in 2013 The American opportunity credit and Hope Scholarship Credit have been claimed for Wilbert for only three tax years before 2013. How to file 2010 taxes in 2013 Therefore, Wilbert meets the second requirement to be eligible for the American opportunity credit. How to file 2010 taxes in 2013 If Wilbert were to file Form 8863 for 2013, he would check “No” for Part III, line 23. How to file 2010 taxes in 2013 If Wilbert meets all of the other requirements, he is eligible for the American opportunity credit. How to file 2010 taxes in 2013 Example 3. How to file 2010 taxes in 2013 Glenda enrolls on a full-time basis in a degree program for the 2014 Spring semester, which begins in January 2014. How to file 2010 taxes in 2013 Glenda pays her tuition for the 2014 Spring semester in December 2013. How to file 2010 taxes in 2013 Because the tuition Glenda paid in 2013 relates to an academic period that begins in the first 3 months of 2014, her eligibility to claim an American opportunity credit in 2013 is determined as if the 2014 Spring semester began in 2013. How to file 2010 taxes in 2013 If the requirements above are not met for any student, you cannot take the American opportunity credit for that student. How to file 2010 taxes in 2013 You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. How to file 2010 taxes in 2013 Note. How to file 2010 taxes in 2013 Qualified education expenses paid by a dependent for whom you claim an exemption, or by a third party for that dependent, are considered paid by you. How to file 2010 taxes in 2013 “Qualified education expenses” are defined later under Qualified Education Expenses . How to file 2010 taxes in 2013 “Eligible students” are defined later under Who Is an Eligible Student . How to file 2010 taxes in 2013 A dependent for whom you claim an exemption is defined later under Who Can Claim a Dependent's Expenses . How to file 2010 taxes in 2013 You may find Figure 2-1, Can You Claim the American Opportunity Credit for 2013 , later, helpful in determining if you can claim an American opportunity credit on your tax return. How to file 2010 taxes in 2013 This image is too large to be displayed in the current screen. How to file 2010 taxes in 2013 Please click the link to view the image. How to file 2010 taxes in 2013 Figure 2-1 Can you claim the American opportunity credit for 2012? Who Cannot Claim the Credit You cannot claim the American opportunity credit for 2013 if any of the following apply. How to file 2010 taxes in 2013 Your filing status is married filing separately. How to file 2010 taxes in 2013 You are listed as a dependent on another person's tax return (such as your parents'). How to file 2010 taxes in 2013 See Who Can Claim a Dependent's Expenses , later. How to file 2010 taxes in 2013 Your modified adjusted gross income (MAGI) is $90,000 or more ($180,000 or more in the case of a joint return). How to file 2010 taxes in 2013 MAGI is explained later under Effect of the Amount of Your Income on the Amount of Your Credit . How to file 2010 taxes in 2013 You (or your spouse) were a nonresident alien for any part of 2013 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. How to file 2010 taxes in 2013 More information on nonresident aliens can be found in Publication 519, U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 Tax Guide for Aliens. How to file 2010 taxes in 2013 What Expenses Qualify The American opportunity credit is based on adjusted qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. How to file 2010 taxes in 2013 Generally, the credit is allowed for adjusted qualified education expenses paid in 2013 for an academic period beginning in 2013 or beginning in the first three months of 2014. How to file 2010 taxes in 2013 For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning January 2014, you can use that $1,500 in figuring your 2013 credit. How to file 2010 taxes in 2013 Academic period. How to file 2010 taxes in 2013   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. How to file 2010 taxes in 2013 In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. How to file 2010 taxes in 2013 Paid with borrowed funds. How to file 2010 taxes in 2013   You can claim an American opportunity credit for qualified education expenses paid with the proceeds of a loan. How to file 2010 taxes in 2013 Use the expenses to figure the American opportunity credit for the year in which the expenses are paid, not the year in which the loan is repaid. How to file 2010 taxes in 2013 Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. How to file 2010 taxes in 2013 Student withdraws from class(es). How to file 2010 taxes in 2013   You can claim an American opportunity credit for qualified education expenses not refunded when a student withdraws. How to file 2010 taxes in 2013 Qualified Education Expenses For purposes of the American opportunity credit, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. How to file 2010 taxes in 2013 Eligible educational institution. How to file 2010 taxes in 2013   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 Department of Education. How to file 2010 taxes in 2013 It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. How to file 2010 taxes in 2013 The educational institution should be able to tell you if it is an eligible educational institution. How to file 2010 taxes in 2013   Certain educational institutions located outside the United States also participate in the U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 Department of Education's Federal Student Aid (FSA) programs. How to file 2010 taxes in 2013 Related expenses. How to file 2010 taxes in 2013   Student-activity fees are included in qualified education expenses only if the fees must be paid to the institution as a condition of enrollment or attendance. How to file 2010 taxes in 2013   However, expenses for books, supplies, and equipment needed for a course of study are included in qualified education expenses whether or not the materials are purchased from the educational institution. How to file 2010 taxes in 2013 Prepaid expenses. How to file 2010 taxes in 2013   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring an education credit for 2013 only. How to file 2010 taxes in 2013 See Academic period, earlier. How to file 2010 taxes in 2013 For example, if you pay $2,000 in December 2013, for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). How to file 2010 taxes in 2013    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). How to file 2010 taxes in 2013   In the following examples, assume that each student is an eligible student at an eligible educational institution. How to file 2010 taxes in 2013 Example 1. How to file 2010 taxes in 2013 Jefferson is a sophomore in University V's degree program in dentistry. How to file 2010 taxes in 2013 This year, in addition to tuition, he is required to pay a fee to the university for the rental of the dental equipment he will use in this program. How to file 2010 taxes in 2013 Because the equipment rental is needed for his course of study, Jefferson's equipment rental fee is a qualified expense. How to file 2010 taxes in 2013 Example 2. How to file 2010 taxes in 2013 Grace and William, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. How to file 2010 taxes in 2013 The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will receive a bill directly from the college. How to file 2010 taxes in 2013 William bought his books from a friend; Grace bought hers at College W's bookstore. How to file 2010 taxes in 2013 Both are qualified education expenses for the American opportunity credit. How to file 2010 taxes in 2013 Example 3. How to file 2010 taxes in 2013 When Kelly enrolled at College X for her freshman year, she had to pay a separate student activity fee in addition to her tuition. How to file 2010 taxes in 2013 This activity fee is required of all students, and is used solely to fund on-campus organizations and activities run by students, such as the student newspaper and the student government. How to file 2010 taxes in 2013 No portion of the fee covers personal expenses. How to file 2010 taxes in 2013 Although labeled as a student activity fee, the fee is required for Kelly's enrollment and attendance at College X and is a qualified expense. How to file 2010 taxes in 2013 No Double Benefit Allowed You cannot do any of the following. How to file 2010 taxes in 2013 Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an American opportunity credit based on those same expenses. How to file 2010 taxes in 2013 Claim an American opportunity credit in the same year that you are claiming a tuition and fees deduction for the same student. How to file 2010 taxes in 2013 Claim an American opportunity credit for any student and use any of that student's expenses in figuring your lifetime learning credit. How to file 2010 taxes in 2013 Figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP) using the same expenses you used to figure the American opportunity credit. How to file 2010 taxes in 2013 See Coordination With American Opportunity and Lifetime Learning Credits in chapter 7, Coverdell Education Savings Account, and Coordination With American Opportunity and Lifetime Learning Credits in chapter 8, Qualified Tuition Program. How to file 2010 taxes in 2013 Claim a credit based on qualified education expenses paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer. How to file 2010 taxes in 2013 See Adjustments to Qualified Education Expenses, next. How to file 2010 taxes in 2013 Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. How to file 2010 taxes in 2013 The result is the amount of adjusted qualified education expenses for each student. How to file 2010 taxes in 2013 Tax-free educational assistance. How to file 2010 taxes in 2013   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. How to file 2010 taxes in 2013 See Academic period, earlier. How to file 2010 taxes in 2013   Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. How to file 2010 taxes in 2013 This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). How to file 2010 taxes in 2013   If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. How to file 2010 taxes in 2013 If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. How to file 2010 taxes in 2013   Tax-free educational assistance includes: The tax-free parts of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). How to file 2010 taxes in 2013 Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. How to file 2010 taxes in 2013 Generally, any scholarship or fellowship is treated as tax free. How to file 2010 taxes in 2013 However, a scholarship or fellowship is not treated as tax free to the extent the student includes it in gross income (if the student is required to file a tax return for the year the scholarship or fellowship is received) and either of the following is true. How to file 2010 taxes in 2013 The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. How to file 2010 taxes in 2013 The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. How to file 2010 taxes in 2013 You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year it is received. How to file 2010 taxes in 2013 For examples, see Coordination with Pell grants and other scholarships, later. How to file 2010 taxes in 2013 Refunds. How to file 2010 taxes in 2013   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or require repayment (recapture) of a credit claimed in an earlier year. How to file 2010 taxes in 2013 Some tax-free educational assistance received after 2013 may be treated as a refund. How to file 2010 taxes in 2013 See Tax-free educational assistance, earlier. How to file 2010 taxes in 2013 Refunds received in 2013. How to file 2010 taxes in 2013   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses for 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. How to file 2010 taxes in 2013 Refunds received after 2013 but before your income tax return is filed. How to file 2010 taxes in 2013   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid before you file an income tax return for 2013, the amount of qualified education expenses for 2013 is reduced by the amount of the refund. How to file 2010 taxes in 2013 Refunds received after 2013 and after your income tax return is filed. How to file 2010 taxes in 2013   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid after you file an income tax return for 2013, you may need to repay some or all of the credit. How to file 2010 taxes in 2013 See Credit recapture, next. How to file 2010 taxes in 2013 Credit recapture. How to file 2010 taxes in 2013    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. How to file 2010 taxes in 2013 You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. How to file 2010 taxes in 2013 You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you claimed the refigured credit(s). How to file 2010 taxes in 2013 Include that amount as an additional tax for the year the refund or tax-free assistance was received. How to file 2010 taxes in 2013 Example. How to file 2010 taxes in 2013   You paid $7,000 tuition and fees in August 2013, and your child began college in September 2013. How to file 2010 taxes in 2013 You filed your 2013 tax return on February 17, 2014, and claimed an American opportunity credit of $2,500. How to file 2010 taxes in 2013 After you filed your return, you received a refund of $4,000. How to file 2010 taxes in 2013 You must refigure your 2013 American opportunity credit using $3,000 of qualified education expenses instead of $7,000. How to file 2010 taxes in 2013 The refigured credit is $2,250. How to file 2010 taxes in 2013 The increase to your tax liability is also $250. How to file 2010 taxes in 2013 Include the difference of $250 as additional tax on your 2014 tax return. How to file 2010 taxes in 2013 See the instructions for your 2014 income tax return to determine where to include this tax. How to file 2010 taxes in 2013 If you pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. How to file 2010 taxes in 2013 Amounts that do not reduce qualified education expenses. How to file 2010 taxes in 2013   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. How to file 2010 taxes in 2013   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. How to file 2010 taxes in 2013 The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. How to file 2010 taxes in 2013 The use of the money is not restricted. How to file 2010 taxes in 2013 Example 1. How to file 2010 taxes in 2013 Joan paid $3,000 for tuition and $5,000 for room and board at University X. How to file 2010 taxes in 2013 The university did not require her to pay any fees in addition to her tuition in order to enroll in or attend classes. How to file 2010 taxes in 2013 To help pay these costs, she was awarded a $2,000 scholarship and a $4,000 student loan. How to file 2010 taxes in 2013 The terms of the scholarship state that it can be used to pay any of Joan's college expenses. How to file 2010 taxes in 2013 University X applies the $2,000 scholarship against Joan's $8,000 total bill, and Joan pays the $6,000 balance of her bill from University X with a combination of her student loan and her savings. How to file 2010 taxes in 2013 Joan does not report any portion of the scholarship as income on her tax return. How to file 2010 taxes in 2013 In figuring the amount of either education credit (American opportunity or lifetime learning), Joan must reduce her qualified education expenses by the amount of the scholarship ($2,000) because she excluded the entire scholarship from her income. How to file 2010 taxes in 2013 The student loan is not tax-free educational assistance, so she does not need to reduce her qualified expenses by any part of the loan proceeds. How to file 2010 taxes in 2013 Joan is treated as having paid $1,000 in qualified education expenses ($3,000 tuition – $2,000 scholarship). How to file 2010 taxes in 2013 Example 2. How to file 2010 taxes in 2013 The facts are the same as in Example 1, except that Joan reports her entire scholarship as income on her tax return. How to file 2010 taxes in 2013 Because Joan reported the entire $2,000 scholarship in her income, she does not need to reduce her qualified education expenses. How to file 2010 taxes in 2013 Joan is treated as having paid $3,000 in qualified education expenses. How to file 2010 taxes in 2013 Coordination with Pell grants and other scholarships. How to file 2010 taxes in 2013   In some cases, you may be able to reduce your tax liability by including scholarships in income. How to file 2010 taxes in 2013 If you are claiming an education credit for a claimed dependent who received a scholarship, you may be able to reduce your tax liability if the student includes the scholarship in income. How to file 2010 taxes in 2013 The scholarship must be one that may (by its terms) be applied to expenses (such as room and board) other than qualified education expenses. How to file 2010 taxes in 2013 Example 1—No scholarship. How to file 2010 taxes in 2013 Bill Pass, age 28 and unmarried, enrolled full-time in 2013 as a first-year student at a local college to earn a degree in law enforcement. How to file 2010 taxes in 2013 This was his first year of postsecondary education. How to file 2010 taxes in 2013 During 2013, he paid $5,600 for his qualified education expenses and $4,400 for his room and board for the fall 2013 semester. How to file 2010 taxes in 2013 He and the college meet all the requirements for the American opportunity credit. How to file 2010 taxes in 2013 Bill's AGI and his MAGI, for purposes of figuring his credit, are $30,000. How to file 2010 taxes in 2013 Bill takes the standard deduction of $5,950 and personal exemption of $3,800, reducing his AGI to taxable income of $20,250. How to file 2010 taxes in 2013 His income tax liability, before credits, is $2,599 and Bill claims no credits other than the American opportunity credit. How to file 2010 taxes in 2013 He figures his American opportunity credit based on qualified education expenses of $4,000, which results in a credit of $2,500 and tax after credits of $99. How to file 2010 taxes in 2013 Example 2—Scholarship excluded from income. How to file 2010 taxes in 2013 The facts are the same as in Example 1—No scholarship, except that Bill was awarded a $5,600 scholarship. How to file 2010 taxes in 2013 Under the terms of his scholarship, it may be used to pay any educational expenses, including room and board. How to file 2010 taxes in 2013 If Bill excludes the scholarship from income, he will be deemed (for purposes of computing his education credit) to have used the scholarship to pay for tuition, required fees, and course materials. How to file 2010 taxes in 2013 His adjusted qualified education expenses will be zero and he will not have an education credit. How to file 2010 taxes in 2013 Therefore, Bill's tax after credits would be $2,599. How to file 2010 taxes in 2013 Example 3—Scholarship partially included in income. How to file 2010 taxes in 2013 The facts are the same as in Example 2—Scholarship excluded from income. How to file 2010 taxes in 2013 If, unlike Example 2, Bill includes $4,000 of the scholarship in income, he will be deemed to have used that amount to pay for room and board. How to file 2010 taxes in 2013 The remaining $1,600 of the $5,600 scholarship will reduce his qualified education expenses and his adjusted qualified education expenses will be $4,000. How to file 2010 taxes in 2013 Bill's AGI will increase to $34,000, his taxable income will increase to $24,250, and his tax before credits will increase to $3,199. How to file 2010 taxes in 2013 Based on his adjusted qualified education expenses of $4,000, Bill would be able to claim an American opportunity tax credit of $2,500 and his tax after credits would be $699. How to file 2010 taxes in 2013 Expenses That Do Not Qualify Qualified education expenses do not include amounts paid for: Insurance, Medical expenses (including student health fees), Room and board, Transportation, or Similar personal, living, or family expenses. How to file 2010 taxes in 2013 This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. How to file 2010 taxes in 2013 Sports, games, hobbies, and noncredit courses. How to file 2010 taxes in 2013   Qualified education expenses generally do not include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. How to file 2010 taxes in 2013 However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. How to file 2010 taxes in 2013 Comprehensive or bundled fees. How to file 2010 taxes in 2013   Some eligible educational institutions combine all of their fees for an academic period into one amount. How to file 2010 taxes in 2013 If you do not receive or do not have access to an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed earlier, contact the institution. How to file 2010 taxes in 2013 The institution is required to make this allocation and provide you with the amount you paid (or were billed) for qualified education expenses on Form 1098-T, Tuition Statement. How to file 2010 taxes in 2013 See Figuring the Credit , later, for more information about Form 1098-T. How to file 2010 taxes in 2013 Who Is an Eligible Student To claim the American opportunity credit, the student for whom you pay qualified education expenses must be an eligible student. How to file 2010 taxes in 2013 This is a student who meets all of the following requirements. How to file 2010 taxes in 2013 The student did not have expenses that were used to figure an American opportunity credit in any 4 earlier tax years. How to file 2010 taxes in 2013 This includes any tax year(s) in which you claimed the Hope Scholarship Credit for the same student. How to file 2010 taxes in 2013 The student had not completed the first 4 years of postsecondary education (generally, the freshman, sophomore, junior, and senior years of college) before 2013. How to file 2010 taxes in 2013 For at least one academic period beginning in 2013, the student was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. How to file 2010 taxes in 2013 The student has not been convicted of any federal or state felony for possessing or distributing a controlled substance as of the end of 2013. How to file 2010 taxes in 2013 These requirements are also shown in Figure 2-2, Who is an Eligible Student for the American Opportunity Credit , later. How to file 2010 taxes in 2013 Completion of first 4 years. How to file 2010 taxes in 2013   A student has completed the first 4 years of postsecondary education if the institution at which the student is enrolled awards the student 4 years of academic credit at that institution for coursework completed by the student before 2013. How to file 2010 taxes in 2013 This student generally would not be an eligible student for purposes of the American opportunity credit. How to file 2010 taxes in 2013 Exception. How to file 2010 taxes in 2013   Any academic credit awarded solely on the basis of the student's performance on proficiency examinations is disregarded in determining whether the student has completed 4 years of postsecondary education. How to file 2010 taxes in 2013 Enrolled at least half-time. How to file 2010 taxes in 2013   A student was enrolled at least half-time if the student was taking at least half the normal full-time work load for his or her course of study. How to file 2010 taxes in 2013   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. How to file 2010 taxes in 2013 However, the standard may not be lower than any of those established by the U. How to file 2010 taxes in 2013 S. How to file 2010 taxes in 2013 Department of Education under the Higher Education Act of 1965. How to file 2010 taxes in 2013 Please click here for the text description of the image. How to file 2010 taxes in 2013 Figure 2-2 Example 1. How to file 2010 taxes in 2013 Mack graduated from high school in June 2012. How to file 2010 taxes in 2013 In September, he enrolled in an undergraduate degree program at College U, and attended full-time for both the 2012 fall and 2013 spring semesters. How to file 2010 taxes in 2013 For the 2013 fall semester, Mack was enrolled less than half-time. How to file 2010 taxes in 2013 Because Mack was enrolled in an undergraduate degree program on at least a half-time basis for at least one academic period that began during 2012 and at least one academic period that began during 2013, he is an eligible student for tax years 2012 and 2013 (including the 2013 fall semester when he enrolled at College U on less than a half-time basis). How to file 2010 taxes in 2013 Example 2. How to file 2010 taxes in 2013 After taking classes at College V on a part-time basis for a few years, Shelly became a full-time student for the 2013 spring semester. How to file 2010 taxes in 2013 College V classified Shelly as a second-semester senior (fourth year) for the 2013 spring semester and as a first-semester graduate student (fifth year) for the 2013 fall semester. How to file 2010 taxes in 2013 Because College V did not classify Shelly as having completed the first 4 years of postsecondary education as of the beginning of 2013, Shelly is an eligible student for tax year 2013. How to file 2010 taxes in 2013 Therefore, the qualified education expenses paid for the 2013 spring semester and the 2013 fall semester are taken into account in calculating the American opportunity credit for 2013. How to file 2010 taxes in 2013 Example 3. How to file 2010 taxes in 2013 During the 2012 fall semester, Larry was a high school student who took classes on a half-time basis at College X. How to file 2010 taxes in 2013 Larry was not enrolled as part of a degree program at College X because College X only admits students to a degree program if they have a high school diploma or equivalent. How to file 2010 taxes in 2013 Because Larry was not enrolled in a degree program at College X during 2012, Larry was not an eligible student for tax year 2012. How to file 2010 taxes in 2013 Example 4. How to file 2010 taxes in 2013 The facts are the same as in Example 3. How to file 2010 taxes in 2013 During the 2013 spring semester, Larry again attended College X but not as part of a degree program. How to file 2010 taxes in 2013 Larry graduated from high school in June 2013. How to file 2010 taxes in 2013 For the 2013 fall semester, Larry enrolled as a full-time student in College X as part of a degree program, and College X awarded Larry credit for his prior coursework at College X. How to file 2010 taxes in 2013 Because Larry was enrolled in a degree program at College X for the 2013 fall term on at least a half-time basis, Larry is an eligible student for all of tax year 2013. How to file 2010 taxes in 2013 Therefore, the qualified education expenses paid for classes taken at College X during both the 2013 spring semester (during which Larry was not enrolled in a degree program) and the 2013 fall semester are taken into account in computing any American opportunity credit. How to file 2010 taxes in 2013 Example 5. How to file 2010 taxes in 2013 Dee graduated from high school in June 2012. How to file 2010 taxes in 2013 In January 2013, Dee enrolled in a 1-year postsecondary certificate program on a full-time basis to obtain a certificate as a travel agent. How to file 2010 taxes in 2013 Dee completed the program in December 2013, and was awarded a certificate. How to file 2010 taxes in 2013 In January 2014, she enrolled in a 1-year postsecondary certificate program on a full-time basis to obtain a certificate as a computer programmer. How to file 2010 taxes in 2013 Dee is an eligible student for both tax years 2013 and 2014 because she meets the degree requirement, the work load requirement, and the year of study requirement for those years. How to file 2010 taxes in 2013 Who Can Claim a Dependent's Expenses If there are qualified education expenses for your dependent during a tax year, either you or your dependent, but not both of you, can claim an American opportunity credit for your dependent's expenses for that year. How to file 2010 taxes in 2013 For you to claim an American opportunity credit for your dependent's expenses, you must also claim an exemption for your dependent. How to file 2010 taxes in 2013 You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c. How to file 2010 taxes in 2013 IF you. How to file 2010 taxes in 2013 . How to file 2010 taxes in 2013 . How to file 2010 taxes in 2013 THEN only. How to file 2010 taxes in 2013 . How to file 2010 taxes in 2013 . How to file 2010 taxes in 2013 claim an exemption on  your tax return for a  dependent who is an  eligible student you can claim the American opportunity credit based on that dependent's expenses. How to file 2010 taxes in 2013 The dependent cannot claim the credit. How to file 2010 taxes in 2013 do not claim an exemption on your tax return for a dependent who is an eligible student (even if entitled to the exemption) the dependent can claim the American opportunity credit. How to file 2010 taxes in 2013 You cannot claim the credit based on this dependent's expenses. How to file 2010 taxes in 2013 Expenses paid by dependent. How to file 2010 taxes in 2013   If you claim an exemption on your tax return for an eligible student who is your dependent, treat any expenses paid (or deemed paid) by your dependent as if you had paid them. How to file 2010 taxes in 2013 Include these expenses when figuring the amount of your American opportunity credit. How to file 2010 taxes in 2013    Qualified education expenses paid directly to an eligible educational institution for your dependent under a court-approved divorce decree are treated as paid by your dependent. How to file 2010 taxes in 2013 Expenses paid by you. How to file 2010 taxes in 2013   If you claim an exemption for a dependent who is an eligible student, only you can include any expenses you paid when figuring the amount of the American opportunity credit. How to file 2010 taxes in 2013 If neither you nor anyone else claims an exemption for the dependent, only the dependent can include any expenses you paid when figuring the American opportunity credit. How to file 2010 taxes in 2013 Expenses paid by others. How to file 2010 taxes in 2013   Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. How to file 2010 taxes in 2013 In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. How to file 2010 taxes in 2013 If you claim an exemption on your tax return for the student, you are considered to have paid the expenses. How to file 2010 taxes in 2013 Example. How to file 2010 taxes in 2013 In 2013, Ms. How to file 2010 taxes in 2013 Allen makes a payment directly to an eligible educational institution for her grandson Todd's qualified education expenses. How to file 2010 taxes in 2013 For purposes of claiming an American opportunity credit, Todd is treated as receiving the money from his grandmother and, in turn, paying his qualified education expenses himself. How to file 2010 taxes in 2013 Unless an exemption for Todd is claimed on someone else's 2013 tax return, only Todd can use the payment to claim an American opportunity credit. How to file 2010 taxes in 2013 If anyone, such as Todd's parents, claims an exemption for Todd on his or her 2013 tax return, whoever claims the exemption may be able to use the expenses to claim an American opportunity credit. How to file 2010 taxes in 2013 If anyone else claims an exemption for Todd, Todd cannot claim an American opportunity credit. How to file 2010 taxes in 2013 Tuition reduction. How to file 2010 taxes in 2013    When an eligible educational institution provides a reduction in tuition to an employee of the institution (or spouse or dependent child of an employee), the amount of the reduction may or may not be taxable. How to file 2010 taxes in 2013 If it is taxable, the employee is treated as receiving a payment of that amount and, in turn, paying it to the educational institution on behalf of the student. How to file 2010 taxes in 2013 For more information on tuition reductions, see Qualified Tuition Reduction in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. How to file 2010 taxes in 2013 Figuring the Credit The amount of the American opportunity credit (per eligible student) is the sum of: 100% of the first $2,000 of qualified education expenses you paid for the eligible student, and 25% of the next $2,000 of qualified education expenses you paid for that student. How to file 2010 taxes in 2013 The maximum amount of American opportunity credit you can claim in 2013 is $2,500 multiplied by the number of eligible students. How to file 2010 taxes in 2013 You can claim the full $2,500 for each eligible student for whom you paid at least $4,000 of adjusted qualified education expenses. How to file 2010 taxes in 2013 However, the credit may be reduced based on your MAGI. How to file 2010 taxes in 2013 See Effect of the Amount of Your Income on the Amount of Your Credit , later. How to file 2010 taxes in 2013 Example. How to file 2010 taxes in 2013 Jack and Kay Ford are married and file a joint tax return. How to file 2010 taxes in 2013 For 2013, they claim an exemption for their dependent daughter on their tax return. How to file 2010 taxes in 2013 Their MAGI is $70,000. How to file 2010 taxes in 2013 Their daughter is in her junior (third) year of studies at the local university. How to file 2010 taxes in 2013 Jack and Kay paid qualified education expenses of $4,300 in 2013. How to file 2010 taxes in 2013 Jack and Kay, their daughter, and the local university meet all of the requirements for the American opportunity credit. How to file 2010 taxes in 2013 Jack and Kay can claim a $2,500 American opportunity credit in 2013. How to file 2010 taxes in 2013 This is 100% of the first $2,000 of qualified education expenses, plus 25% of the next $2,000. How to file 2010 taxes in 2013 Form 1098-T. How to file 2010 taxes in 2013   To help you figure your American opportunity credit, the student should receive Form 1098-T, Tuition Statement. How to file 2010 taxes in 2013 Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2014. How to file 2010 taxes in 2013 An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. How to file 2010 taxes in 2013 However, the amounts in boxes 1 and 2 of Form 1098-T might be different than what you paid. How to file 2010 taxes in 2013 When figuring the credit, use only the amounts you paid or are deemed to have paid in 2013 for qualified education expenses. How to file 2010 taxes in 2013   In addition, Form 1098-T should give other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether the student was enrolled at least half-time or was a graduate student. How to file 2010 taxes in 2013    The eligible educational institution may ask for a completed Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification, or similar statement to obtain the student's name, address, and taxpayer identification number. How to file 2010 taxes in 2013 Effect of the Amount of Your Income on the Amount of Your Credit The amount of your American opportunity credit is phased out (gradually reduced) if your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return). How to file 2010 taxes in 2013 You cannot claim an American opportunity credit if your MAGI is $90,000 or more ($180,000 or more if you file a joint return). How to file 2010 taxes in 2013 Modified adjusted gross income (MAGI). How to file 2010 taxes in 2013   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. How to file 2010 taxes in 2013 MAGI when using Form 1040A. How to file 2010 taxes in 2013   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. How to file 2010 taxes in 2013 MAGI when using Form 1040. How to file 2010 taxes in 2013   If you file Form 1040, your MAGI is the AGI on line 38 of that form, modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. How to file 2010 taxes in 2013 You can use Worksheet 2-1, next, to figure your MAGI. How to file 2010 taxes in 2013    Worksheet 2-1. How to file 2010 taxes in 2013 MAGI for the American Opportunity Credit 1. How to file 2010 taxes in 2013 Enter your adjusted gross income  (Form 1040, line 38)   1. How to file 2010 taxes in 2013   2. How to file 2010 taxes in 2013 Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. How to file 2010 taxes in 2013       3. How to file 2010 taxes in 2013 Enter your foreign housing deduction (Form 2555, line 50)   3. How to file 2010 taxes in 2013       4. How to file 2010 taxes in 2013 Enter the amount of income from Puerto Rico you are excluding   4. How to file 2010 taxes in 2013       5. How to file 2010 taxes in 2013 Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. How to file 2010 taxes in 2013       6. How to file 2010 taxes in 2013 Add the amounts on lines 2, 3, 4, and 5   6. How to file 2010 taxes in 2013   7. How to file 2010 taxes in 2013 Add the amounts on lines 1 and 6. How to file 2010 taxes in 2013  This is your modified adjusted  gross income. How to file 2010 taxes in 2013 Enter here and  on Form 8863, line 3   7. How to file 2010 taxes in 2013   Phaseout. How to file 2010 taxes in 2013   If your MAGI is within the range of incomes where the credit must be reduced, you will figure your reduced credit using lines 2-7, of Form 8863, Part I. How to file 2010 taxes in 2013 The same method is shown in the following example. How to file 2010 taxes in 2013 Example. How to file 2010 taxes in 2013 You are filing a joint return and your MAGI is $165,000. How to file 2010 taxes in 2013 In 2013, you paid $5,000 of qualified education expenses. How to file 2010 taxes in 2013 You figure a tentative American opportunity credit of $2,500 (100% of the first $2,000 of qualified education expenses, plus 25% of the next $2,000 of qualified education expenses). How to file 2010 taxes in 2013 Because your MAGI is within the range of incomes where the credit must be reduced, you must multiply your tentative credit ($2,500) by a fraction. How to file 2010 taxes in 2013 The numerator of the fraction is $180,000 (the upper limit for those filing a joint return) minus your MAGI. How to file 2010 taxes in 2013 The denominator is $20,000, the range of incomes for the phaseout ($160,000 to $180,000). How to file 2010 taxes in 2013 The result is the amount of your phased out (reduced) American opportunity credit ($1,875). How to file 2010 taxes in 2013      $2,500 × $180,000 − $165,000  $20,000 = $1,875   Refundable Part of Credit Forty percent of the American opportunity credit is refundable for most taxpayers. How to file 2010 taxes in 2013 However, if you were under age 24 at the end of 2013 and the conditions listed below apply to you, you cannot claim any part of the American opportunity credit as a refundable credit on your tax return. How to file 2010 taxes in 2013 Instead, your allowed credit (figured on Form 8863, Part II) will be used to reduce your tax as a nonrefundable credit only. How to file 2010 taxes in 2013 You do not qualify for a refund if items 1 (a, b, or c), 2, and 3 below apply to you. How to file 2010 taxes in 2013 You were: Under age 18 at the end of 2013, or Age 18 at the end of 2013 and your earned income (defined below) was less than one-half of your support (defined below), or Over age 18 and under age 24 at the end of 2013 and a full-time student (defined below) and your earned income (defined below) was less than one-half of your support (defined below). How to file 2010 taxes in 2013 At least one of your parents was alive at the end of 2013. How to file 2010 taxes in 2013 You are filing a return as single, head of household, qualifying widow(er), or married filing separately for 2013. How to file 2010 taxes in 2013 Earned income. How to file 2010 taxes in 2013   Earned income includes wages, salaries, professional fees, and other payments received for personal services actually performed. How to file 2010 taxes in 2013 Earned income includes the part of any scholarship or fellowship that represents payment for teaching, research, or other services performed by the student that are required as a condition for receiving the scholarship or fellowship. How to file 2010 taxes in 2013 Earned income does not include that part of the compensation for personal services rendered to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compensation for the personal services actually rendered. How to file 2010 taxes in 2013   If you are a sole proprietor or a partner in a trade or business in which both personal services and capital are material income-producing factors, earned income also includes a reasonable allowance for compensation for personal services, but not more than 30% of your share of the net profits from that trade or business (after subtracting the deduction for one-half of self-employment tax). How to file 2010 taxes in 2013 However, if capital is not an income-producing factor and your personal services produced the business income, the 30% limit does not apply. How to file 2010 taxes in 2013 Support. How to file 2010 taxes in 2013   Your support includes food, shelter, clothing, medical and dental care, education, and the like. How to file 2010 taxes in 2013 Generally, the amount of the item of support will be the amount of expenses incurred by the one furnishing such item. How to file 2010 taxes in 2013 If the item of support is in the form of property or lodging, measure the amount of such item of support by its fair market value. How to file 2010 taxes in 2013 However, a scholarship received by you is not considered support if you are a full-time student. How to file 2010 taxes in 2013 See Publication 501 for details. How to file 2010 taxes in 2013 Full-time student. How to file 2010 taxes in 2013   You are a full-time student for 2013 if during any part of any 5 calendar months during the year you were enrolled as a full-time student at an eligible educational institution (defined earlier), or took a full-time, on-farm training course given by such an institution or by a state, county, or local government agency. How to file 2010 taxes in 2013 Claiming the Credit You claim the American opportunity credit by completing Form 8863 and submitting it with your Form 1040 or 1040A. How to file 2010 taxes in 2013 Enter the nonrefundable part of the credit on Form 1040, line 49, or on Form 1040A, line 31. How to file 2010 taxes in 2013 Enter the refundable part of the credit on Form 1040, line 66, or on Form 1040A, line 40. How to file 2010 taxes in 2013 A filled-in Form 8863 is shown at the end of this publication. How to file 2010 taxes in 2013 Note. How to file 2010 taxes in 2013 In Appendix A. How to file 2010 taxes in 2013 at the end of this publication, there is an example illustrating the use of Form 8863 when both the American opportunity credit and the lifetime learning credit are claimed on the same tax return. How to file 2010 taxes in 2013 Prev  Up  Next   Home   More Online Publications