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Hrblock apply tax extension free 3. Hrblock apply tax extension free   Savings Incentive Match Plans for Employees (SIMPLE) Table of Contents Introduction What Is a SIMPLE Plan?Eligible Employees How Are Contributions Made? How Much Can Be Contributed on Your Behalf?Matching contributions less than 3%. Hrblock apply tax extension free Traditional IRA mistakenly moved to SIMPLE IRA. Hrblock apply tax extension free When Can You Withdraw or Use Assets?Are Distributions Taxable? Introduction This chapter is for employees who need information about savings incentive match plans for employees (SIMPLE plans). Hrblock apply tax extension free It explains what a SIMPLE plan is, contributions to a SIMPLE plan, and distributions from a SIMPLE plan. Hrblock apply tax extension free Under a SIMPLE plan, SIMPLE retirement accounts for participating employees can be set up either as: Part of a 401(k) plan, or A plan using IRAs (SIMPLE IRA). Hrblock apply tax extension free This chapter only discusses the SIMPLE plan rules that relate to SIMPLE IRAs. Hrblock apply tax extension free See chapter 3 of Publication 560 for information on any special rules for SIMPLE plans that do not use IRAs. Hrblock apply tax extension free If your employer maintains a SIMPLE plan, you must be notified, in writing, that you can choose the financial institution that will serve as trustee for your SIMPLE IRA and that you can roll over or transfer your SIMPLE IRA to another financial institution. Hrblock apply tax extension free See Rollovers and Transfers Exception, later under When Can You Withdraw or Use Assets. Hrblock apply tax extension free What Is a SIMPLE Plan? A SIMPLE plan is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. Hrblock apply tax extension free See chapter 3 of Publication 560 for information on the requirements employers must satisfy to set up a SIMPLE plan. Hrblock apply tax extension free A SIMPLE plan is a written agreement (salary reduction agreement) between you and your employer that allows you, if you are an eligible employee (including a self-employed individual), to choose to: Reduce your compensation (salary) by a certain percentage each pay period, and Have your employer contribute the salary reductions to a SIMPLE IRA on your behalf. Hrblock apply tax extension free These contributions are called salary reduction contributions. Hrblock apply tax extension free All contributions under a SIMPLE IRA plan must be made to SIMPLE IRAs, not to any other type of IRA. Hrblock apply tax extension free The SIMPLE IRA can be an individual retirement account or an individual retirement annuity, described in chapter 1. Hrblock apply tax extension free Contributions are made on behalf of eligible employees. Hrblock apply tax extension free (See Eligible Employees below. Hrblock apply tax extension free ) Contributions are also subject to various limits. Hrblock apply tax extension free (See How Much Can Be Contributed on Your Behalf , later. Hrblock apply tax extension free ) In addition to salary reduction contributions, your employer must make either matching contributions or nonelective contributions. Hrblock apply tax extension free See How Are Contributions Made , later. Hrblock apply tax extension free You may be able to claim a credit for contributions to your SIMPLE plan. Hrblock apply tax extension free For more information, see chapter 4. Hrblock apply tax extension free Eligible Employees You must be allowed to participate in your employer's SIMPLE plan if you: Received at least $5,000 in compensation from your employer during any 2 years prior to the current year, and Are reasonably expected to receive at least $5,000 in compensation during the calendar year for which contributions are made. Hrblock apply tax extension free Self-employed individual. Hrblock apply tax extension free   For SIMPLE plan purposes, the term employee includes a self-employed individual who received earned income. Hrblock apply tax extension free Excludable employees. Hrblock apply tax extension free   Your employer can exclude the following employees from participating in the SIMPLE plan. Hrblock apply tax extension free Employees whose retirement benefits are covered by a collective bargaining agreement (union contract). Hrblock apply tax extension free Employees who are nonresident aliens and received no earned income from sources within the United States. Hrblock apply tax extension free Employees who would not have been eligible employees if an acquisition, disposition, or similar transaction had not occurred during the year. Hrblock apply tax extension free Compensation. Hrblock apply tax extension free   For purposes of the SIMPLE plan rules, your compensation for a year generally includes the following amounts. Hrblock apply tax extension free Wages, tips, and other pay from your employer that is subject to income tax withholding. Hrblock apply tax extension free Deferred amounts elected under any 401(k) plans, 403(b) plans, government (section 457) plans, SEP plans, and SIMPLE plans. Hrblock apply tax extension free Self-employed individual compensation. Hrblock apply tax extension free   For purposes of the SIMPLE plan rules, if you are self-employed, your compensation for a year is your net earnings from self-employment (Schedule SE (Form 1040), Section A, line 4, or Section B, line 6) before subtracting any contributions made to a SIMPLE IRA on your behalf. Hrblock apply tax extension free   For these purposes, net earnings from self-employment include services performed while claiming exemption from self-employment tax as a member of a group conscientiously opposed to social security benefits. Hrblock apply tax extension free How Are Contributions Made? Contributions under a salary reduction agreement are called salary reduction contributions. Hrblock apply tax extension free They are made on your behalf by your employer. Hrblock apply tax extension free Your employer must also make either matching contributions or nonelective contributions. Hrblock apply tax extension free Salary reduction contributions. Hrblock apply tax extension free   During the 60-day period before the beginning of any year, and during the 60-day period before you are eligible, you can choose salary reduction contributions expressed either as a percentage of compensation, or as a specific dollar amount (if your employer offers this choice). Hrblock apply tax extension free You can choose to cancel the election at any time during the year. Hrblock apply tax extension free   Salary reduction contributions are also referred to as “elective deferrals. Hrblock apply tax extension free ”   Your employer cannot place restrictions on the contributions amount (such as by limiting the contributions percentage), except to comply with the salary reduction contributions limit, discussed under How Much Can Be Contributed on Your Behalf, later. Hrblock apply tax extension free Matching contributions. Hrblock apply tax extension free   Unless your employer chooses to make nonelective contributions, your employer must make contributions equal to the salary reduction contributions you choose (elect), but only up to certain limits. Hrblock apply tax extension free See How Much Can Be Contributed on Your Behalf below. Hrblock apply tax extension free These contributions are in addition to the salary reduction contributions and must be made to the SIMPLE IRAs of all eligible employees (defined earlier) who chose salary reductions. Hrblock apply tax extension free These contributions are referred to as matching contributions. Hrblock apply tax extension free   Matching contributions on behalf of a self-employed individual are not treated as salary reduction contributions. Hrblock apply tax extension free Nonelective contributions. Hrblock apply tax extension free   Instead of making matching contributions, your employer may be able to choose to make nonelective contributions on behalf of all eligible employees. Hrblock apply tax extension free These nonelective contributions must be made on behalf of each eligible employee who has at least $5,000 of compensation from your employer, whether or not the employee chose salary reductions. Hrblock apply tax extension free   One of the requirements your employer must satisfy is notifying the employees that the election was made. Hrblock apply tax extension free For other requirements that your employer must satisfy, see chapter 3 of Publication 560. Hrblock apply tax extension free How Much Can Be Contributed on Your Behalf? The limits on contributions to a SIMPLE IRA vary with the type of contribution that is made. Hrblock apply tax extension free Salary reduction contributions limit. Hrblock apply tax extension free   Salary reduction contributions (employee-chosen contributions or elective deferrals) that your employer can make on your behalf under a SIMPLE plan are limited to $12,000 for 2013. Hrblock apply tax extension free The limitation remains at $12,000 for 2014. Hrblock apply tax extension free If you are a participant in any other employer plans during 2013 and you have elective salary reductions or deferred compensation under those plans, the salary reduction contributions under the SIMPLE plan also are included in the annual limit of $17,500 for 2013 on exclusions of salary reductions and other elective deferrals. Hrblock apply tax extension free You, not your employer, are responsible for monitoring compliance with these limits. Hrblock apply tax extension free Additional elective deferrals can be contributed to your SIMPLE plan if: You reached age 50 by the end of 2013, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions, such as the regular annual limit. Hrblock apply tax extension free The most that can be contributed in additional elective deferrals to your SIMPLE plan is the lesser of the following two amounts. Hrblock apply tax extension free $2,500 for 2013, or Your compensation for the year reduced by your other elective deferrals for the year. Hrblock apply tax extension free The additional deferrals are not subject to any other contribution limit and are not taken into account in applying other contribution limits. Hrblock apply tax extension free The additional deferrals are not subject to the nondiscrimination rules as long as all eligible participants are allowed to make them. Hrblock apply tax extension free Matching employer contributions limit. Hrblock apply tax extension free   Generally, your employer must make matching contributions to your SIMPLE IRA in an amount equal to your salary reduction contributions. Hrblock apply tax extension free These matching contributions cannot be more than 3% of your compensation for the calendar year. Hrblock apply tax extension free See Matching contributions less than 3% below. Hrblock apply tax extension free Example 1. Hrblock apply tax extension free In 2013, Joshua was a participant in his employer's SIMPLE plan. Hrblock apply tax extension free His compensation, before SIMPLE plan contributions, was $41,600 ($800 per week). Hrblock apply tax extension free Instead of taking it all in cash, Joshua elected to have 12. Hrblock apply tax extension free 5% of his weekly pay ($100) contributed to his SIMPLE IRA. Hrblock apply tax extension free For the full year, Joshua's salary reduction contributions were $5,200, which is less than the $12,000 limit on these contributions. Hrblock apply tax extension free Under the plan, Joshua's employer was required to make matching contributions to Joshua's SIMPLE IRA. Hrblock apply tax extension free Because his employer's matching contributions must equal Joshua's salary reductions, but cannot be more than 3% of his compensation (before salary reductions) for the year, his employer's matching contribution was limited to $1,248 (3% of $41,600). Hrblock apply tax extension free Example 2. Hrblock apply tax extension free Assume the same facts as in Example 1 , except that Joshua's compensation for the year was $408,163 and he chose to have 2. Hrblock apply tax extension free 94% of his weekly pay contributed to his SIMPLE IRA. Hrblock apply tax extension free In this example, Joshua's salary reduction contributions for the year (2. Hrblock apply tax extension free 94% × $408,163) were equal to the 2013 limit for salary reduction contributions ($12,000). Hrblock apply tax extension free Because 3% of Joshua's compensation ($12,245) is more than the amount his employer was required to match ($12,000), his employer's matching contributions were limited to $12,000. Hrblock apply tax extension free In this example, total contributions made on Joshua's behalf for the year were $24,000 ($12,000 (Joshua's contributions) + $12,000 (matching contributions)), the maximum contributions permitted under a SIMPLE IRA for 2013. Hrblock apply tax extension free Matching contributions less than 3%. Hrblock apply tax extension free   Your employer can reduce the 3% limit on matching contributions for a calendar year, but only if: The limit is not reduced below 1%, The limit is not reduced for more than 2 years out of the 5-year period that ends with (and includes) the year for which the election is effective, and Employees are notified of the reduced limit within a reasonable period of time before the 60-day election period during which they can enter into salary reduction agreements. Hrblock apply tax extension free   For purposes of applying the rule in item (2) in determining whether the limit was reduced below 3% for the year, any year before the first year in which your employer (or a former employer) maintains a SIMPLE IRA plan will be treated as a year for which the limit was 3%. Hrblock apply tax extension free If your employer chooses to make nonelective contributions for a year, that year also will be treated as a year for which the limit was 3%. Hrblock apply tax extension free Nonelective employer contributions limit. Hrblock apply tax extension free   If your employer chooses to make nonelective contributions, instead of matching contributions, to each eligible employee's SIMPLE IRA, contributions must be 2% of your compensation for the entire year. Hrblock apply tax extension free For 2013, only $255,000 of your compensation can be taken into account to figure the contribution limit. Hrblock apply tax extension free   Your employer can substitute the 2% nonelective contribution for the matching contribution for a year if both of the following requirements are met. Hrblock apply tax extension free Eligible employees are notified that a 2% nonelective contribution will be made instead of a matching contribution. Hrblock apply tax extension free This notice is provided within a reasonable period during which employees can enter into salary reduction agreements. Hrblock apply tax extension free Example 3. Hrblock apply tax extension free Assume the same facts as in Example 2 , except that Joshua's employer chose to make nonelective contributions instead of matching contributions. Hrblock apply tax extension free Because his employer's nonelective contributions are limited to 2% of up to $255,000 of Joshua's compensation, his employer's contribution to Joshua's SIMPLE IRA was limited to $5,100. Hrblock apply tax extension free In this example, total contributions made on Joshua's behalf for the year were $17,100 (Joshua's salary reductions of $12,000 plus his employer's contribution of $5,100). Hrblock apply tax extension free Traditional IRA mistakenly moved to SIMPLE IRA. Hrblock apply tax extension free   If you mistakenly roll over or transfer an amount from a traditional IRA to a SIMPLE IRA, you can later recharacterize the amount as a contribution to another traditional IRA. Hrblock apply tax extension free For more information, see Recharacterizations in chapter 1. Hrblock apply tax extension free Recharacterizing employer contributions. Hrblock apply tax extension free   You cannot recharacterize employer contributions (including elective deferrals) under a SEP or SIMPLE plan as contributions to another IRA. Hrblock apply tax extension free SEPs are discussed in chapter 2 of Publication 560. Hrblock apply tax extension free SIMPLE plans are discussed in this chapter. Hrblock apply tax extension free Converting from a SIMPLE IRA. Hrblock apply tax extension free   Generally, you can convert an amount in your SIMPLE IRA to a Roth IRA under the same rules explained in chapter 1 under Converting From Any Traditional IRA Into a Roth IRA . Hrblock apply tax extension free    However, you cannot convert any amount distributed from the SIMPLE IRA during the 2-year period beginning on the date you first participated in any SIMPLE IRA plan maintained by your employer. Hrblock apply tax extension free When Can You Withdraw or Use Assets? Generally, the same distribution (withdrawal) rules that apply to traditional IRAs apply to SIMPLE IRAs. Hrblock apply tax extension free These rules are discussed in chapter 1. Hrblock apply tax extension free Your employer cannot restrict you from taking distributions from a SIMPLE IRA. Hrblock apply tax extension free Are Distributions Taxable? Generally, distributions from a SIMPLE IRA are fully taxable as ordinary income. Hrblock apply tax extension free If the distribution is an early distribution (discussed in chapter 1), it may be subject to the additional tax on early distributions. Hrblock apply tax extension free See Additional Tax on Early Distributions, later. Hrblock apply tax extension free Rollovers and Transfers Exception Generally, rollovers and trustee-to-trustee transfers are not taxable distributions. Hrblock apply tax extension free Two-year rule. Hrblock apply tax extension free   To qualify as a tax-free rollover (or a tax-free trustee-to-trustee transfer), a rollover distribution (or a transfer) made from a SIMPLE IRA during the 2-year period beginning on the date on which you first participated in your employer's SIMPLE plan must be contributed (or transferred) to another SIMPLE IRA. Hrblock apply tax extension free The 2-year period begins on the first day on which contributions made by your employer are deposited in your SIMPLE IRA. Hrblock apply tax extension free   After the 2-year period, amounts in a SIMPLE IRA can be rolled over or transferred tax free to an IRA other than a SIMPLE IRA, or to a qualified plan, a tax-sheltered annuity plan (section 403(b) plan), or deferred compensation plan of a state or local government (section 457 plan). Hrblock apply tax extension free Additional Tax on Early Distributions The additional tax on early distributions (discussed in chapter 1) applies to SIMPLE IRAs. Hrblock apply tax extension free If a distribution is an early distribution and occurs during the 2-year period following the date on which you first participated in your employer's SIMPLE plan, the additional tax on early distributions is increased from 10% to 25%. Hrblock apply tax extension free If a rollover distribution (or transfer) from a SIMPLE IRA does not satisfy the 2-year rule, and is otherwise an early distribution, the additional tax imposed because of the early distribution is increased from 10% to 25% of the amount distributed. Hrblock apply tax extension free Prev  Up  Next   Home   More Online Publications

Topic 607 - Adoption Credit and Adoption Assistance Programs

Tax benefits for adoption include both a tax credit for qualified adoption expenses paid to adopt an eligible child and an exclusion for employer-provided adoption assistance. For tax years 1997 through 2009, the credit is nonrefundable. For 2010 and 2011, the credit is refundable. For tax years after 2011 the credit is nonrefundable. For 2013 the credit has a maximum amount (dollar limitation) of $12,970 per child.

Qualified adoption expenses

For both the credit and the exclusion, qualified adoption expenses, defined in section 23(d)(1) of the Code, include reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging while away from home) and other expenses that are directly related to and for the principal purpose of the legal adoption of an eligible child. An eligible child must be under the age of 18, or be physically or mentally incapable of caring for him- or herself.

Qualified adoption expenses do not include expenses that a taxpayer pays to adopt the child of the taxpayer's spouse. Qualified adoption expenses include expenses incurred by a registered domestic partner who lives in a state that allows same-sex second parent or co-parent to adopt his or her partner’s child.

Income and dollar limitations

The credit and exclusion are each subject to an income limitation and a dollar limitation. The income limit on the adoption credit or exclusion is based on your modified adjusted gross income (MAGI). For tax year 2013, the MAGI phaseout begins at $194,580 and ends at $234,580. Thus, if your MAGI is below $194,580 for 2013, your credit or exclusion will not be affected by the MAGI phaseout but, if your MAGI for 2013 is above $234,580, your credit or exclusion will be zero. If your MAGI for 2013 falls between $194,580 and $234,580, your credit or exclusion will be reduced.

The credit and exclusion are each limited to a specific dollar amount ($12,970 for tax year 2013) for each effort to adopt an eligible child. The dollar limit for a particular year must be reduced by the amount of qualified adoption expenses used in the previous years for the same adoption effort. For example, if you claimed a $3,000 credit in connection with a domestic adoption in 2012 and paid an additional $12,970 of qualified adoption expenses in 2013 (when the adoption became final), the maximum credit you can claim in 2013 is $9,970 ($12,970 dollar limit, less $3,000 of qualified adoption expenses claimed in 2012).

The dollar limitation applies separately to both the credit and the exclusion, and you may be able to claim both the credit and the exclusion for qualified expenses paid in adopting an eligible child. However, any allowable exclusion must be claimed before any allowable credit is claimed. Any exclusion of expenses reduces the amount of qualified adoption expenses available for the credit, and you cannot claim both a credit and an exclusion for the same expenses. Examples 1, 2, and 3 illustrate these rules.

Example 1. In 2013 the following events occur: (a) You pay $12,970 of qualified adoption expenses in connection with an adoption of an eligible child; (b) your employer reimburses you for $2,970 of those expenses; and (3) the adoption becomes final. Your MAGI for 2013 is less than $194,580. Assuming all other requirements are met, you can exclude $2,970 from your gross income for 2013. However, the expenses allowable for the adoption credit are limited to $10,000 ($12,970 total expenses paid, less $2,970 employer reimbursement).

Example 2. The facts are the same as in Example 1, except that you pay $17,970 of qualified adoption expenses and your employer reimburses you for $5,000 of those expenses. Assuming all other requirements are met, you can exclude $5,000 from your gross income for 2013 and claim a $12,970 adoption credit ($17,970 total expenses paid, less $5,000 employer reimbursement).

Example 3. The facts are the same as in Example 1, except that you pay $30,000 of qualified adoption expenses and your employer reimburses you for $12,970 of those expenses. Assuming all other requirements are met, you can exclude $12,970 from your gross income for 2013. You can also claim a credit of $12,970. The remaining $4,060 of expenses ($30,000 total expenses paid, less $12,970 dollar-limited exclusion, less $12,970 dollar-limited credit) cannot be used for either the exclusion or the adoption credit.

Timing rules: When can you claim the credit?

The tax years for which you can claim the credit depend on when the expenses are paid, whether the adoption is domestic or foreign, and whether the adoption has been finalized. Generally, the credit is allowable whether the adoption is domestic or foreign. A domestic adoption is the adoption of a U.S. child (an eligible child who is a citizen or resident of the U.S. or its possessions before the adoption effort begins). A foreign adoption is the adoption of an eligible child who is not yet a citizen or resident of the U.S. or its possessions before the adoption effort begins.

In domestic adoptions, qualified adoption expenses paid before the year the adoption becomes final are allowable as a credit for the tax year following the year of payment (and the credit is allowable even if the adoption is never finalized). For a foreign adoption, however, qualified adoption expenses are allowable as a credit only if the adoption has been finalized. Qualified adoption expenses paid before and during the year when a foreign adoption is finalized are allowable as a credit for the year when it becomes final. Once an adoption becomes final, qualified adoption expenses paid during or after the year of finality are allowable as a credit for the year of payment, whether the adoption is foreign or domestic.

As a result of these timing rules, a taxpayer may sometimes claim a credit for both prior-year and current-year qualified adoption expenses in the year of finality. Example 4 illustrates them.

Example 4. An adoptive parent pays qualified adoption expenses of $3,000 in 2011, $4,000 in 2012, and $5,000 in 2013. In 2013, the adoption becomes final.

If the adoption was domestic, the adoptive parent may claim the $3,000 of expenses paid in 2011 as a credit on the parent’s 2012 tax return. The adoptive parent claims both the $4,000 paid in 2012 and the $5,000 paid in 2013 as a credit on the parent’s 2013 tax return. The $4,000 credit is claimed on the 2013 return because 2013 is the year after the year in which the $4,000 was paid, and the $5,000 is claimed on the 2013 return because 2013 is the year when the adoption becomes final. Since the adoption credit is nonrefundable for tax years ending after December 31, 2011, the $9,000 claimed on the 2013 tax return can be used to reduce any tax liability owed for 2013, and the excess, if any, will carry forward to the next year.

If the adoption was foreign, the adoptive parent claims all $12,000 in qualified adoption expenses ($3,000 paid in 2011, $4,000 paid in 2012, and $5,000 in 2013) on the adoptive parent’s 2013 tax return because 2013 is the year when the adoption becomes final.

Adoption of U.S. children who have been determined by a state to have special needs

In the case of an adoption of a U.S. child that a state has determined has special needs, you may be eligible for the maximum amount of credit or exclusion for the year of finality, even if you paid no qualified adoption expenses. A child is considered to have special needs for purposes of the adoption credit if all of the following conditions are met:

  1. The child was a U.S. citizen or resident when the adoption effort began;
  2. A state determines that the child cannot or should not be returned to his or her parent's home; and
  3. A state determines that the child probably will not be adopted unless assistance is provided to the adoptive family.

The definition of "children with special needs" for purposes of the adoption credit is narrower than the definitions of "children with special needs" for other purposes. For purposes of the adoption credit, foreign children are not considered special needs. Additionally, many U.S. children who have disabilities are not considered special needs for the purposes of the adoption credit. Generally, special needs adoptions are the adoptions of children whom the state's child welfare agency considers difficult to place for adoption.

Filing status

There are five filing statuses:

  • Single
  • Married filing jointly
  • Married filing separately
  • Head of household, and
  • Qualifying widow(er) with dependent child

If you file a return as single or as a qualifying widow(er) with dependent child, you are eligible to claim the adoption credit or the exclusion. Generally, if you are married, you must file a joint return to claim the adoption credit or exclusion. However, a married individual who is considered to be unmarried for tax purposes, as well as a single individual, may be eligible to file as head of household under some circumstances. If you file as head of household, you are eligible to claim the adoption credit or the exclusion. For more information on filing status, see Publication 501, Exemptions, Standard Deductions, and Filing Information.

If your filing status is married filing separately in the year when particular qualified adoption expenses are first allowable, you are ineligible to claim the credit or exclusion for the particular expenses. In order to claim the credit or exclusion, you may need to amend your return to change your filing status to "married filing jointly" within the period of limitations. Example 5 illustrates this rule.

Example 5. Husband and wife pay qualified adoption expenses of $3,000 in 2011, $4,000 in 2012, and $5,000 in 2013 in connection with a domestic adoption. In 2013, the adoption becomes final. Husband and wife file their 2011 and 2012 returns using the married filing separately filing status, but change their filing status to married filing jointly when filing their 2013 return.

Husband and wife’s filing status for 2011 is irrelevant for purposes of the adoption credit because the $3,000 of qualified adoption expenses that they paid in 2011 are not first allowable until 2012. But because husband and wife’s filing status for 2012 is married filing separately, they cannot claim the $3,000 of qualified adoption expenses that they paid in 2011. However, the $9,000 of qualified adoption expenses first allowable in 2013 ($4,000 paid in 2012, plus $5,000 paid in 2013) can be claimed on the 2013 tax return because husband and wife’s filing status for 2013 is married filing jointly.

Form 8839 and instructions

To claim the credit or exclusion, complete Form 8839 (PDF), Qualified Adoption Expenses, and attach the form to your Form 1040 (PDF) or Form 1040NR (PDF).

There is no longer a requirement to attach the adoption documentation with your tax return. However, documentation must be kept as part of your records.

The IRS encourages taxpayers to e-file their Federal income tax returns. The 2013 Form 8839 can be e-filed. Consequently, taxpayers who e-file their tax returns do not need to print and mail completed forms to the IRS.

Page Last Reviewed or Updated: December 12, 2013

The Hrblock Apply Tax Extension Free

Hrblock apply tax extension free 11. Hrblock apply tax extension free   Employer-Provided Educational Assistance Table of Contents Introduction Working condition fringe benefit. Hrblock apply tax extension free Introduction If you receive educational assistance benefits from your employer under an educational assistance program, you can exclude up to $5,250 of those benefits each year. Hrblock apply tax extension free This means your employer should not include those benefits with your wages, tips, and other compensation shown in box 1 of your Form W-2. Hrblock apply tax extension free This also means that you do not have to include the benefits on your income tax return. Hrblock apply tax extension free You cannot use any of the tax-free education expenses paid for by your employer as the basis for any other deduction or credit, including the American opportunity credit and lifetime learning credit. Hrblock apply tax extension free Educational assistance program. Hrblock apply tax extension free   To qualify as an educational assistance program, the plan must be written and must meet certain other requirements. Hrblock apply tax extension free Your employer can tell you whether there is a qualified program where you work. Hrblock apply tax extension free Educational assistance benefits. Hrblock apply tax extension free   Tax-free educational assistance benefits include payments for tuition, fees and similar expenses, books, supplies, and equipment. Hrblock apply tax extension free Education generally includes any form of instruction or training that improves or develops your capabilities. Hrblock apply tax extension free The payments do not have to be for work-related courses or courses that are part of a degree program. Hrblock apply tax extension free   Educational assistance benefits do not include payments for the following items. Hrblock apply tax extension free Meals, lodging, or transportation. Hrblock apply tax extension free Tools or supplies (other than textbooks) that you can keep after completing the course of instruction. Hrblock apply tax extension free Courses involving sports, games, or hobbies unless they: Have a reasonable relationship to the business of your employer, or Are required as part of a degree program. Hrblock apply tax extension free Benefits over $5,250. Hrblock apply tax extension free   If your employer pays more than $5,250 in educational assistance benefits for you during the year, you must generally pay tax on the amount over $5,250. Hrblock apply tax extension free Your employer should include in your wages (Form W-2, box 1) the amount that you must include in income. Hrblock apply tax extension free Working condition fringe benefit. Hrblock apply tax extension free    However, if the benefits over $5,250 also qualify as a working condition fringe benefit, your employer does not have to include them in your wages. Hrblock apply tax extension free A working condition fringe benefit is a benefit which, had you paid for it, you could deduct as an employee business expense. Hrblock apply tax extension free For more information on working condition fringe benefits, see Working Condition Benefits in chapter 2 of Publication 15-B, Employer's Tax Guide to Fringe Benefits. Hrblock apply tax extension free Prev  Up  Next   Home   More Online Publications