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Military Tax Return

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Military Tax Return

Military tax return 3. Military tax return   Exclusions From Gross Income Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Resident AliensForeign Earned Income and Housing Amount Nonresident AliensInterest Income Dividend Income Services Performed for Foreign Employer Gambling Winnings From Dog or Horse Racing Gain From the Sale of Your Main Home Scholarships and Fellowship GrantsExpenses that do not qualify. Military tax return Introduction Resident and nonresident aliens are allowed exclusions from gross income if they meet certain conditions. Military tax return An exclusion from gross income is generally income you receive that is not included in your U. Military tax return S. Military tax return income and is not subject to U. Military tax return S. Military tax return tax. Military tax return This chapter covers some of the more common exclusions allowed to resident and nonresident aliens. Military tax return Topics - This chapter discusses: Nontaxable interest, Nontaxable dividends, Certain compensation paid by a foreign employer, Gain from sale of home, and Scholarships and fellowship grants. Military tax return Useful Items - You may want to see: Publication 54 Tax Guide for U. Military tax return S. Military tax return Citizens and Resident Aliens Abroad 523 Selling Your Home See chapter 12 for information about getting these publications. Military tax return Resident Aliens Resident aliens may be able to exclude the following items from their gross income. Military tax return Foreign Earned Income and Housing Amount If you are physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months, you may qualify for the foreign earned income exclusion. Military tax return The exclusion is $97,600 in 2013. Military tax return In addition, you may be able to exclude or deduct certain foreign housing amounts. Military tax return You may also qualify if you are a bona fide resident of a foreign country and you are a citizen or national of a country with which the United States has an income tax treaty. Military tax return For more information, see Publication 54. Military tax return Foreign country. Military tax return    A foreign country is any territory under the sovereignty of a government other than that of the United States. Military tax return   The term “foreign country” includes the country's territorial waters and airspace, but not international waters and the airspace above them. Military tax return It also includes the seabed and subsoil of those submarine areas adjacent to the country's territorial waters over which it has exclusive rights under international law to explore and exploit the natural resources. Military tax return   The term “foreign country” does not include U. Military tax return S. Military tax return possessions or territories. Military tax return It does not include the Antarctic region. Military tax return Nonresident Aliens Nonresident aliens can exclude the following items from their gross income. Military tax return Interest Income Interest income that is not connected with a U. Military tax return S. Military tax return trade or business is excluded from income if it is from: Deposits (including certificates of deposit) with persons in the banking business, Deposits or withdrawable accounts with mutual savings banks, cooperative banks, credit unions, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under federal or state law (if the interest paid or credited can be deducted by the association), and Amounts held by an insurance company under an agreement to pay interest on them. Military tax return State and local government obligations. Military tax return   Interest on obligations of a state or political subdivision, the District of Columbia, or a U. Military tax return S. Military tax return possession, generally is not included in income. Military tax return However, interest on certain private activity bonds, arbitrage bonds, and certain bonds not in registered form is included in income. Military tax return Portfolio interest. Military tax return   Interest and original issue discount that qualifies as portfolio interest is not subject to NRA withholding. Military tax return To qualify as portfolio interest, the interest must be paid on obligations issued after July 18, 1984, and otherwise subject to NRA withholding. Military tax return Note. Military tax return For obligations issued after March 18, 2012, portfolio interest does not include interest paid on debt that is not in registered form. Military tax return Before March 19, 2012, portfolio interest included interest on certain registered and nonregistered (bearer) bonds if the obligations meet the requirements described below. Military tax return Obligations in registered form. Military tax return   Portfolio interest includes interest paid on an obligation that is in registered form, and for which you have received documentation that the beneficial owner of the obligation is not a United States person. Military tax return   Generally, an obligation is in registered form if: (i) the obligation is registered as to both principal and any stated interest with the issuer (or its agent) and any transfer of the obligation may be effected only by surrender of the old obligation and reissuance to the new holder; (ii) the right to principal and stated interest with respect to the obligation may be transferred only through a book entry system maintained by the issuer or its agent; or (iii) the obligation is registered as to both principal and stated interest with the issuer or its agent and can be transferred both by surrender and reissuance and through a book entry system. Military tax return   An obligation that would otherwise be considered to be in registered form is not considered to be in registered form as of a particular time if it can be converted at any time in the future into an obligation that is not in registered form. Military tax return For more information on whether obligations are considered to be in registered form, see Portfolio interest in Publication 515. Military tax return Obligations not in registered form. Military tax return    For obligations issued before March 19, 2012, interest on an obligation that is not in registered form (bearer obligation) is portfolio interest if the obligation is foreign-targeted. Military tax return A bearer obligation is foreign-targeted if: There are arrangements to ensure that the obligation will be sold, or resold in connection with the original issue, only to a person who is not a United States person, Interest on the obligation is payable only outside the United States and its possessions, and The face of the obligation contains a statement that any United States person who holds the obligation will be subject to limits under the United States income tax laws. Military tax return   Documentation is not required for interest on bearer obligations to qualify as portfolio interest. Military tax return In some cases, however, you may need documentation for purposes of Form 1099 reporting and backup withholding. Military tax return Interest that does not qualify as portfolio interest. Military tax return   Payments to certain persons and payments of contingent interest do not qualify as portfolio interest. Military tax return You must withhold at the statutory rate on such payments unless some other exception, such as a treaty provision, applies. Military tax return Contingent interest. Military tax return   Portfolio interest does not include contingent interest. Military tax return Contingent interest is either of the following: Interest that is determined by reference to: Any receipts, sales, or other cash flow of the debtor or related person, Income or profits of the debtor or related person, Any change in value of any property of the debtor or a related person, or Any dividend, partnership distributions, or similar payments made by the debtor or a related person. Military tax return For exceptions, see Internal Revenue Code section 871(h)(4)(C). Military tax return Any other type of contingent interest that is identified by the Secretary of the Treasury in regulations. Military tax return Related persons. Military tax return   Related persons include the following. Military tax return Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. Military tax return ), and lineal descendants (children, grandchildren, etc. Military tax return ). Military tax return Any person who is a party to any arrangement undertaken for the purpose of avoiding the contingent interest rules. Military tax return Certain corporations, partnerships, and other entities. Military tax return For details, see Nondeductible Loss in chapter 2 of Publication 544. Military tax return Exception for existing debt. Military tax return   Contingent interest does not include interest paid or accrued on any debt with a fixed term that was issued: On or before April 7, 1993, or After April 7, 1993, pursuant to a written binding contract in effect on that date and at all times thereafter before that debt was issued. Military tax return Dividend Income The following dividend income is exempt from the 30% tax. Military tax return Certain dividends paid by foreign corporations. Military tax return   There is no 30% tax on U. Military tax return S. Military tax return source dividends you receive from a foreign corporation. Military tax return See Second exception under Dividends in chapter 2 for how to figure the amount of U. Military tax return S. Military tax return source dividends. Military tax return Certain interest-related dividends. Military tax return   There is no 30% tax on interest-related dividends from sources within the United States that you receive from a mutual fund or other regulated investment company in 2013. Military tax return The mutual fund will designate in writing which dividends are interest-related dividends. Military tax return Certain short-term capital gain dividends. Military tax return   There may not be any 30% tax on certain short-term capital gain dividends from sources within the United States that you receive from a mutual fund or other regulated investment company. Military tax return The mutual fund will designate in writing which dividends are short-term capital gain dividends. Military tax return This tax relief will not apply to you if you are present in the United States for 183 days or more during your tax year. Military tax return Services Performed for Foreign Employer If you were paid by a foreign employer, your U. Military tax return S. Military tax return source income may be exempt from U. Military tax return S. Military tax return tax, but only if you meet one of the situations discussed next. Military tax return Employees of foreign persons, organizations, or offices. Military tax return   Income for personal services performed in the United States as a nonresident alien is not considered to be from U. Military tax return S. Military tax return sources and is tax exempt if you meet all three of the following conditions. Military tax return You perform personal services as an employee of or under a contract with a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in a trade or business in the United States; or you work for an office or place of business maintained in a foreign country or possession of the United States by a U. Military tax return S. Military tax return corporation, a U. Military tax return S. Military tax return partnership, or a U. Military tax return S. Military tax return citizen or resident. Military tax return You perform these services while you are a nonresident alien temporarily present in the United States for a period or periods of not more than a total of 90 days during the tax year. Military tax return Your pay for these services is not more than $3,000. Military tax return If you do not meet all three conditions, your income from personal services performed in the United States is U. Military tax return S. Military tax return source income and is taxed according to the rules in chapter 4. Military tax return   If your pay for these services is more than $3,000, the entire amount is income from a trade or business within the United States. Military tax return To find if your pay is more than $3,000, do not include any amounts you get from your employer for advances or reimbursements of business travel expenses, if you were required to and did account to your employer for those expenses. Military tax return If the advances or reimbursements are more than your expenses, include the excess in your pay for these services. Military tax return   A day means a calendar day during any part of which you are physically present in the United States. Military tax return Example 1. Military tax return During 2013, Henry Smythe, a nonresident alien from a nontreaty country, worked for an overseas office of a U. Military tax return S. Military tax return partnership. Military tax return Henry, who uses the calendar year as his tax year, was temporarily present in the United States for 60 days during 2013 performing personal services for the overseas office of the partnership. Military tax return That office paid him a total gross salary of $2,800 for those services. Military tax return During 2013, he was not engaged in a trade or business in the United States. Military tax return The salary is not considered U. Military tax return S. Military tax return source income and is exempt from U. Military tax return S. Military tax return tax. Military tax return Example 2. Military tax return The facts are the same as in Example 1, except that Henry's total gross salary for the services performed in the United States during 2013 was $4,500. Military tax return He received $2,875 in 2013, and $1,625 in 2014. Military tax return During 2013, he was engaged in a trade or business in the United States because the compensation for his personal services in the United States was more than $3,000. Military tax return Henry's salary is U. Military tax return S. Military tax return source income and is taxed under the rules in chapter 4. Military tax return Crew members. Military tax return   Compensation for services performed by a nonresident alien in connection with the individual's temporary presence in the United States as a regular crew member of a foreign vessel (for example, a boat or ship) engaged in transportation between the United States and a foreign country or U. Military tax return S. Military tax return possession is not U. Military tax return S. Military tax return source income and is exempt from U. Military tax return S. Military tax return tax. Military tax return This exemption does not apply to compensation for services performed on foreign aircraft. Military tax return Students and exchange visitors. Military tax return   Nonresident alien students and exchange visitors present in the United States under “F,” “J,” or “Q” visas can exclude from gross income pay received from a foreign employer. Military tax return   This group includes bona fide students, scholars, trainees, teachers, professors, research assistants, specialists, or leaders in a field of specialized knowledge or skill, or persons of similar description. Military tax return It also includes the alien's spouse and minor children if they come with the alien or come later to join the alien. Military tax return   A nonresident alien temporarily present in the United States under a “J” visa includes an alien individual entering the United States as an exchange visitor under the Mutual Educational and Cultural Exchange Act of 1961. Military tax return Foreign employer. Military tax return   A foreign employer is: A nonresident alien individual, foreign partnership, or foreign corporation, or An office or place of business maintained in a foreign country or in a U. Military tax return S. Military tax return possession by a U. Military tax return S. Military tax return corporation, a U. Military tax return S. Military tax return partnership, or an individual who is a U. Military tax return S. Military tax return citizen or resident. Military tax return   The term “foreign employer” does not include a foreign government. Military tax return Pay from a foreign government that is exempt from U. Military tax return S. Military tax return income tax is discussed in chapter 10. Military tax return Income from certain annuities. Military tax return   Do not include in income any annuity received under a qualified annuity plan or from a qualified trust exempt from U. Military tax return S. Military tax return income tax if you meet both of the following conditions. Military tax return You receive the annuity only because: You performed personal services outside the United States while you were a nonresident alien, or You performed personal services inside the United States while you were a nonresident alien and you met the three conditions, described earlier, under Employees of foreign persons, organizations, or offices . Military tax return At the time the first amount is paid as an annuity under the plan (or by the trust), 90% or more of the employees for whom contributions or benefits are provided under the annuity plan (or under the plan of which the trust is a part) are U. Military tax return S. Military tax return citizens or residents. Military tax return   If the annuity qualifies under condition (1) but not condition (2) above, you do not have to include the amount in income if: You are a resident of a country that gives a substantially equal exclusion to U. Military tax return S. Military tax return citizens and residents, or You are a resident of a beneficiary developing country under Title V of the Trade Act of 1974. Military tax return   If you are not sure whether the annuity is from a qualified annuity plan or qualified trust, ask the person who made the payment. Military tax return Income affected by treaties. Military tax return   Income of any kind that is exempt from U. Military tax return S. Military tax return tax under a treaty to which the United States is a party is excluded from your gross income. Military tax return Income on which the tax is only limited by treaty, however, is included in gross income. Military tax return See chapter 9. Military tax return Gambling Winnings From Dog or Horse Racing You can exclude from your gross income winnings from legal wagers initiated outside the United States in a parimutuel pool with respect to a live horse or dog race in the United States. Military tax return Gain From the Sale of Your Main Home If you sold your main home, you may be able to exclude up to $250,000 of the gain on the sale of your home. Military tax return If you are married and file a joint return, you may be able to exclude up to $500,000. Military tax return For information on the requirements for this exclusion, see Publication 523. Military tax return This exclusion does not apply to nonresident aliens who are subject to the expatriation tax rules discussed in chapter 4. Military tax return Scholarships and Fellowship Grants If you are a candidate for a degree, you may be able to exclude from your income part or all of the amounts you receive as a qualified scholarship. Military tax return The rules discussed here apply to both resident and nonresident aliens. Military tax return If a nonresident alien receives a grant that is not from U. Military tax return S. Military tax return sources, it is not subject to U. Military tax return S. Military tax return tax. Military tax return See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your grant is from U. Military tax return S. Military tax return sources. Military tax return A scholarship or fellowship is excludable from income only if: You are a candidate for a degree at an eligible educational institution, and You use the scholarship or fellowship to pay qualified education expenses. Military tax return Candidate for a degree. Military tax return   You are a candidate for a degree if you: Attend a primary or secondary school or are pursuing a degree at a college or university, or Attend an accredited educational institution that is authorized to provide: A program that is acceptable for full credit toward a bachelor's or higher degree, or A program of training to prepare students for gainful employment in a recognized occupation. Military tax return Eligible educational institution. Military tax return   An eligible educational institution is one that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. Military tax return Qualified education expenses. Military tax return   These are expenses for: Tuition and fees required to enroll at or attend an eligible educational institution, and Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. Military tax return These items must be required of all students in your course of instruction. Military tax return However, in order for these to be qualified education expenses, the terms of the scholarship or fellowship cannot require that it be used for other purposes, such as room and board, or specify that it cannot be used for tuition or course-related expenses. Military tax return Expenses that do not qualify. Military tax return   Qualified education expenses do not include the cost of: Room and board, Travel, Research, Clerical help, or Equipment and other expenses that are not required for enrollment in or attendance at an eligible educational institution. Military tax return This is true even if the fee must be paid to the institution as a condition of enrollment or attendance. Military tax return Scholarship or fellowship amounts used to pay these costs are taxable. Military tax return Amounts used to pay expenses that do not qualify. Military tax return   A scholarship amount used to pay any expense that does not qualify is taxable, even if the expense is a fee that must be paid to the institution as a condition of enrollment or attendance. Military tax return Payment for services. Military tax return   You cannot exclude from income the portion of any scholarship, fellowship, or tuition reduction that represents payment for past, present, or future teaching, research, or other services. Military tax return This is true even if all candidates for a degree are required to perform the services as a condition for receiving the degree. Military tax return Example. Military tax return On January 7, Maria Gomez is notified of a scholarship of $2,500 for the spring semester. Military tax return As a condition for receiving the scholarship, Maria must serve as a part-time teaching assistant. Military tax return Of the $2,500 scholarship, $1,000 represents payment for her services. Military tax return Assuming that Maria meets all other conditions, she can exclude no more than $1,500 from income as a qualified scholarship. Military tax return Prev  Up  Next   Home   More Online Publications
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The Military Tax Return

Military tax return 33. Military tax return   Credit for the Elderly or the Disabled Table of Contents Introduction Useful Items - You may want to see: Are You Eligible for the Credit?Qualified Individual Income Limits How to Claim the CreditCredit Figured for You Credit Figured by You Introduction If you qualify, you may be able to reduce the tax you owe by taking the credit for the elderly or the disabled which is figured on Schedule R (Form 1040A or 1040). Military tax return This chapter explains the following. Military tax return Who qualifies for the credit for the elderly or the disabled. Military tax return How to claim the credit. Military tax return You may be able to take the credit for the elderly or the disabled if: You are age 65 or older at the end of 2013, or You retired on permanent and total disability and have taxable disability income. Military tax return Useful Items - You may want to see: Publication 524 Credit for the Elderly or the Disabled 554 Tax Guide for Seniors Form (and Instruction) Schedule R (Form 1040A or 1040) Credit for the Elderly or the Disabled Are You Eligible for the Credit? You can take the credit for the elderly or the disabled if you meet both of the following requirements. Military tax return You are a qualified individual. Military tax return Your income is not more than certain limits. Military tax return You can use Figure 33-A and Table 33-1 as guides to see if you are eligible for the credit. Military tax return Use Figure 33-A first to see if you are a qualified individual. Military tax return If you are, go to Table 33-1 to make sure your income is not too high to take the credit. Military tax return You can take the credit only if you file Form 1040 or Form 1040A. Military tax return You cannot take the credit if you file Form 1040EZ. Military tax return Qualified Individual You are a qualified individual for this credit if you are a U. Military tax return S. Military tax return citizen or resident alien, and either of the following applies. Military tax return You were age 65 or older at the end of 2013. Military tax return You were under age 65 at the end of 2013 and all three of the following statements are true. Military tax return You retired on permanent and total disability (explained later). Military tax return You received taxable disability income for 2013. Military tax return On January 1, 2013, you had not reached mandatory retirement age (defined later under Disability income ). Military tax return Age 65. Military tax return   You are considered to be age 65 on the day before your 65th birthday. Military tax return Therefore, if you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. Military tax return U. Military tax return S. Military tax return Citizen or Resident Alien You must be a U. Military tax return S. Military tax return citizen or resident alien (or be treated as a resident alien) to take the credit. Military tax return Generally, you cannot take the credit if you were a nonresident alien at any time during the tax year. Military tax return Exceptions. Military tax return   You may be able to take the credit if you are a nonresident alien who is married to a U. Military tax return S. Military tax return citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U. Military tax return S. Military tax return resident alien. Military tax return If you make that choice, both you and your spouse are taxed on your worldwide incomes. Military tax return If you were a nonresident alien at the beginning of the year and a resident alien at the end of the year, and you were married to a U. Military tax return S. Military tax return citizen or resident alien at the end of the year, you may be able to choose to be treated as a U. Military tax return S. Military tax return resident alien for the entire year. Military tax return In that case, you may be allowed to take the credit. Military tax return For information on these choices, see chapter 1 of Publication 519, U. Military tax return S. Military tax return Tax Guide for Aliens. Military tax return Married Persons Generally, if you are married at the end of the tax year, you and your spouse must file a joint return to take the credit. Military tax return However, if you and your spouse did not live in the same household at any time during the tax year, you can file either a joint return or separate returns and still take the credit. Military tax return Head of household. Military tax return   You can file as head of household and qualify to take the credit, even if your spouse lived with you during the first 6 months of the year, if you meet certain tests. Military tax return See Head of Household in chapter 2 for the tests you must meet. Military tax return Under Age 65 If you are under age 65 at the end of 2013, you can qualify for the credit only if you are retired on permanent and total disability (discussed next) and have taxable disability income (discussed later under Disability income ). Military tax return You are retired on permanent and total disability if: You were permanently and totally disabled when you retired, and You retired on disability before the close of the tax year. Military tax return Even if you do not retire formally, you may be considered retired on disability when you have stopped working because of your disability. Military tax return If you retired on disability before 1977, and were not permanently and totally disabled at the time, you can qualify for the credit if you were permanently and totally disabled on January 1, 1976, or January 1, 1977. Military tax return Permanent and total disability. Military tax return    You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of your physical or mental condition. Military tax return A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. Military tax return See Physician's statement , later. Military tax return Substantial gainful activity. Military tax return   Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. Military tax return Full-time work (or part-time work done at your employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that you are able to engage in substantial gainful activity. Military tax return   Substantial gainful activity is not work you do to take care of yourself or your home. Military tax return It is not unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. Military tax return However, doing this kind of work may show that you are able to engage in substantial gainful activity. Military tax return    The fact that you have not worked for some time is not, of itself, conclusive evidence that you cannot engage in substantial gainful activity. Military tax return Sheltered employment. Military tax return   Certain work offered at qualified locations to physically or mentally impaired persons is considered sheltered employment. Military tax return These qualified locations are in sheltered workshops, hospitals, and similar institutions, homebound programs, and Department of Veterans Affairs (VA) sponsored homes. Military tax return   Compared to commercial employment, pay is lower for sheltered employment. Military tax return Therefore, one usually does not look for sheltered employment if he or she can get other employment. Military tax return The fact that one has accepted sheltered employment is not proof of the person's ability to engage in substantial gainful activity. Military tax return Physician's statement. Military tax return   If you are under age 65, you must have your physician complete a statement certifying that you were permanently and totally disabled on the date you retired. Military tax return You can use the statement in the Instructions for Schedule R. Military tax return    Figure 33-A. Military tax return Are You a Qualified Individual? This image is too large to be displayed in the current screen. Military tax return Please click the link to view the image. Military tax return Figure 33-A Are You a Qualified Individual?   You do not have to file this statement with your Form 1040 or Form 1040A, but you must keep it for your records. Military tax return Veterans. Military tax return   If the Department of Veterans Affairs (VA) certifies that you are permanently and totally disabled, you can substitute VA Form 21-0172, Certification of Permanent and Total Disability, for the physician's statement you are required to keep. Military tax return VA Form 21-0172 must be signed by a person authorized by the VA to do so. Military tax return You can get this form from your local VA regional office. Military tax return Physician's statement obtained in earlier year. Military tax return   If you got a physician's statement in an earlier year and, due to your continued disabled condition, you were unable to engage in any substantial gainful activity during 2013, you may not need to get another physician's statement for 2013. Military tax return For a detailed explanation of the conditions you must meet, see the instructions for Schedule R, Part II. Military tax return If you meet the required conditions, check the box on your Schedule R, Part II, line 2. Military tax return   If you checked box 4, 5, or 6 in Part I of Schedule R, enter in the space above the box on line 2 in Part II the first name(s) of the spouse(s) for whom the box is checked. Military tax return Table 33-1. Military tax return Income Limits IF your filing status is . Military tax return . Military tax return . Military tax return THEN, even if you qualify (see Figure 33-A ), you CANNOT take the credit if. Military tax return . Military tax return . Military tax return   Your adjusted gross income (AGI)* is equal to or more than. Military tax return . Military tax return . Military tax return     OR the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than. Military tax return . Military tax return . Military tax return   single, head of household, or qualifying widow(er) with dependent child   $17,500     $5,000   married filing jointly and only one spouse qualifies in Figure 33-A   $20,000     $5,000   married filing jointly and both spouses qualify in Figure 33-A   $25,000     $7,500   married filing separately and you lived apart from your spouse for all of 2013   $12,500     $3,750   * AGI is the amount on Form 1040A, line 22, or Form 1040, line 38. Military tax return Disability income. Military tax return   If you are under age 65, you must also have taxable disability income to qualify for the credit. Military tax return Disability income must meet both of the following requirements. Military tax return It must be paid under your employer's accident or health plan or pension plan. Military tax return It must be included in your income as wages (or payments instead of wages) for the time you are absent from work because of permanent and total disability. Military tax return Payments that are not disability income. Military tax return   Any payment you receive from a plan that does not provide for disability retirement is not disability income. Military tax return Any lump-sum payment for accrued annual leave that you receive when you retire on disability is a salary payment and is not disability income. Military tax return   For purposes of the credit for the elderly or the disabled, disability income does not include amounts you receive after you reach mandatory retirement age. Military tax return Mandatory retirement age is the age set by your employer at which you would have had to retire, had you not become disabled. Military tax return Income Limits To determine if you can claim the credit, you must consider two income limits. Military tax return The first limit is the amount of your adjusted gross income (AGI). Military tax return The second limit is the amount of nontaxable social security and other nontaxable pensions, annuities, or disability income you received. Military tax return The limits are shown in Table 33-1. Military tax return If your AGI and nontaxable pensions, annuities, or disability income are less than the income limits, you may be able to claim the credit. Military tax return See How to Claim the Credit , later. Military tax return If either your AGI or your nontaxable pensions, annuities, or disability income are equal to or more than the income limits, you cannot take the credit. Military tax return How to Claim the Credit You can figure the credit yourself or the Internal Revenue Service will figure it for you. Military tax return Credit Figured for You If you choose to have the IRS figure the credit for you, read the following discussion for the form you will file (Form 1040 or 1040A). Military tax return If you want the IRS to figure your tax, see chapter 30. Military tax return Form 1040. Military tax return   If you want the IRS to figure your credit, see Form 1040 Line Entries under Tax Figured by IRS in chapter 30. Military tax return Form 1040A. Military tax return   If you want the IRS to figure your credit, see Form 1040A Line Entries under Tax Figured by IRS in chapter 30. Military tax return Credit Figured by You If you choose to figure the credit yourself, fill out the front of Schedule R. Military tax return Next, fill out Schedule R, Part III. Military tax return If you file Form 1040A, enter the amount from Schedule R, line 22, on Form 1040A, line 30. Military tax return If you file Form 1040, include the amount from Schedule R, line 22, on line 53; check box c, and enter “Sch R” on the line next to that box. Military tax return For a step-by-step discussion about filling out Part III of Schedule R, see Figuring the Credit Yourself in Publication 524. Military tax return Limit on credit. Military tax return   The amount of the credit you can claim is generally limited to the amount of your tax. Military tax return Use the Credit Limit Worksheet in the Instructions for Schedule R to determine if your credit is limited. Military tax return Prev  Up  Next   Home   More Online Publications