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State Tax Forms And Instructions

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State Tax Forms And Instructions

State tax forms and instructions 6. State tax forms and instructions   Ingresos de Propinas Table of Contents Introduction Useful Items - You may want to see: Cómo Mantener un Registro Diario de PropinasRegistro electrónico de propinas. State tax forms and instructions Cómo Declarar las Propinas a su EmpleadorInforme electrónico de propinas. State tax forms and instructions Declaración final. State tax forms and instructions Cómo se Declaran las Propinas en la Declaración de Impuestos Asignación de Propinas Introduction Este capítulo es para empleados que reciben propinas. State tax forms and instructions Todas las propinas que usted reciba son ingresos y están sujetas al impuesto federal sobre los ingresos. State tax forms and instructions Tiene que incluir en el ingreso bruto todas las propinas que reciba directamente, propinas recibidas por medio de cargos a tarjetas de crédito o débito que le son entregadas por su empleador y su participación de todas las propinas recibidas de un fondo común u otro acuerdo de distribución de propinas. State tax forms and instructions El valor de las propinas que no son pagadas en efectivo, tales como boletos, pases u otros artículos de valor también son ingresos y están sujetos al impuesto. State tax forms and instructions La declaración correcta de los ingresos de propinas no es difícil. State tax forms and instructions Usted tiene que completar tres pasos: Mantener un registro diario de propinas. State tax forms and instructions Declarar sus propinas a su empleador. State tax forms and instructions Declarar todas sus propinas en su declaración de impuestos. State tax forms and instructions  Este capítulo le explicará estos tres pasos y le ayudará a determinar cómo completar su declaración de impuestos si no ha realizado los dos primeros pasos. State tax forms and instructions Este capítulo también le mostrará cómo tratar las propinas asignadas. State tax forms and instructions Para información sobre acuerdos y programas especiales relacionados con las propinas, vea la Publicación 531, en inglés. State tax forms and instructions Useful Items - You may want to see: Publicación 531 Reporting Tip Income (Cómo declarar los ingresos de propinas), en inglés 1244-PR Registro Diario de Propinas Recibidas por el(la) Empleado(a) e Informe al Patrono, en español 1244 Employee's Daily Record of Tips and Report to Employer (Registro Diario de Propinas Recibidas por el(la) Empleado(a) e Informe al Empleador), en inglés Formularios (e Instrucciones) 4137 Social Security and Medicare Tax on Unreported Tip Income (Impuestos del Seguro Social y Medicare sobre el ingreso de propinas no declaradas), en inglés 4070-PR Informe al Patrono de Propinas Recibidas por el(la) Empleado(a), disponible en español 4070 Employee's Report of Tips to Employer (Informe al Empleador de Propinas Recibidas por el(la) Empleado(a)), en inglés Cómo Mantener un Registro Diario de Propinas ¿Por qué mantener un registro diario de propinas?   Usted tiene que mantener un registro diario de propinas para que pueda: Declarar sus propinas correctamente a su empleador, Declarar sus propinas correctamente en su declaración de impuestos y Comprobar sus ingresos de propinas si se cuestiona su declaración. State tax forms and instructions Cómo mantener un registro diario de propinas. State tax forms and instructions   Hay dos maneras de mantener un registro diario de propinas. State tax forms and instructions Puede optar por: Anotar la información sobre sus propinas en un diario de propinas o Mantener copias de documentos que comprueben sus propinas, tales como cuentas de restaurantes y recibos de cargos hechos a tarjetas de crédito o de débito. State tax forms and instructions Usted debe mantener su registro diario de propinas junto con su documentación tributaria u otra documentación personal. State tax forms and instructions Tiene que guardar su documentación por el tiempo en que sea importante para la aplicación de la ley tributaria federal. State tax forms and instructions Para información sobre cuánto tiempo debe guardar esta documentación, vea el tema titulado Cuánto Tiempo Debe Mantener Los Documentos , en el capítulo 1. State tax forms and instructions    Si mantiene un registro de propinas, puede utilizar el Formulario 4070A-PR, Registro Diario de Propinas del(la) Empleado(a) (o el Formulario 4070-A, en inglés). State tax forms and instructions Para obtener el Formulario 4070A-PR (o el Formulario 4070-A), pídale al IRS o a su empleador la Publicación 1244-PR (o la Publicación 1244, en inglés). State tax forms and instructions Asimismo, la Publicación 1244-PR está disponible en el sitio web www. State tax forms and instructions irs. State tax forms and instructions gov/pub/irs-pdf/p1244pr. State tax forms and instructions pdf. State tax forms and instructions La Publicación 1244-PR (o la Publicación 1244, en inglés) contiene suficientes copias del Formulario 4070A-PR (o del Formulario 4070-A, en inglés) para un año. State tax forms and instructions Cada día, anote la información solicitada en el formulario. State tax forms and instructions   Además de la información solicitada en el Formulario 4070A-PR, también es necesario que mantenga un registro u otra documentación de la fecha y el valor de toda propina que reciba que no sea en efectivo, tales como boletos, pases u otros artículos de valor. State tax forms and instructions Aunque no declara estas propinas a su empleador, tiene que declararlas en su declaración de impuestos. State tax forms and instructions   Si no utiliza el Formulario 4070A-PR (o el Formulario 4070-A, en inglés), comience su registro escribiendo su nombre, el nombre de su empleador y el nombre del negocio o establecimiento donde trabaja si es distinto al nombre de su empleador. State tax forms and instructions Luego, cada día que trabaje, anote la fecha y la siguiente información: Propinas en efectivo que obtiene directamente de los clientes o de otros empleados. State tax forms and instructions Propinas de los clientes que pagan con tarjeta de crédito y de débito que su empleador le paga. State tax forms and instructions El valor de toda propina que haya recibido que no sea pagada en efectivo, tales como boletos, pases y otros artículos de valor. State tax forms and instructions La cantidad de propinas que usted le pagó a otros empleados a través de un fondo común u otro acuerdo de distribución de propinas y los nombres de los empleados a los cuales les pagó las propinas. State tax forms and instructions Registro electrónico de propinas. State tax forms and instructions   Usted puede utilizar un sistema electrónico provisto por su empleador para mantener un registro de propinas diarias. State tax forms and instructions En tal caso, tiene que recibir y guardar una copia en papel de este registro. State tax forms and instructions Cargos por servicios. State tax forms and instructions   No anote en su registro de propinas la cantidad de ningún cargo por servicios que su empleador añada a la cuenta de un cliente y que luego le pague a usted y que el empleador trate como salario de usted. State tax forms and instructions Los cargos de este tipo son parte de su salario, no son propinas. State tax forms and instructions Vea los ejemplos que se presentan a continuación. State tax forms and instructions Ejemplo 1. State tax forms and instructions El restaurante Buena Comida añade un cargo del 18% a la cuenta de grupos de 6 o más clientes. State tax forms and instructions Juanita forma parte de un grupo de 8 personas. State tax forms and instructions Además del costo de la comida y bebidas que se sirvieron a todos en el grupo de Juanita, la cuenta incluye un monto igual al 18% del costo de las mismas, el cual aparece en la línea para anotar propinas. State tax forms and instructions Dicho monto se incluye en el total de la cuenta. State tax forms and instructions Debido a que Juanita no tenía un derecho ilimitado de determinar el monto en la línea para anotar propinas, el cargo del 18% se considera un cargo por servicios. State tax forms and instructions No anote el cargo del 18% en su registro de propinas. State tax forms and instructions Los cargos por servicios que se le paguen son considerados salarios y no propinas. State tax forms and instructions Ejemplo 2. State tax forms and instructions El restaurante Buena Comida también incluye ejemplos de cálculos para las cantidades de propinas en la parte inferior de la cuenta para la comida y las bebidas servidas a los clientes. State tax forms and instructions En la parte inferior de la cuenta de David, debajo de la línea para la firma, se incluye una línea en blanco para anotar propinas, además de ejemplos de propinas calculadas en base al 15%, 18% y 20% de los costos de la comida y bebidas que le sirvieron. State tax forms and instructions Debido a que David tenía libertad para anotar cualquier cantidad en la línea para anotar propinas, o dejarla en blanco, cualquier cantidad que David anote se considera propina. State tax forms and instructions Cerciórese de incluir esta cantidad en su registro de propinas. State tax forms and instructions Cómo Declarar las Propinas a su Empleador ¿Por qué tiene que declarar sus propinas a su empleador?   Tiene que declarar sus propinas a su empleador para que: Éste pueda retenerle impuesto federal sobre el ingreso, impuestos del Seguro Social, impuestos de Medicare, Impuesto Adicional del Medicare o impuestos de la jubilación ferroviaria, Éste pueda declarar la cantidad correcta de sus ganancias a la Administración del Seguro Social o a la Junta de la Jubilación Ferroviaria (lo cual afecta sus beneficios cuando se jubile o si queda incapacitado, o los beneficios de su familia cuando usted fallezca) y Usted pueda evitar la Multa por no declarar las propinas a su empleador (tema explicado más adelante). State tax forms and instructions Propinas que tiene que declarar a su empleador. State tax forms and instructions   Declárele a su empleador solamente las propinas que reciba en efectivo, en cheques, tarjetas de débito y de crédito. State tax forms and instructions   Si el total de las propinas que reciba de un trabajo en un mes determinado es menos de $20, no declare las propinas de ese mes a ese empleador. State tax forms and instructions   Si recibe propinas conforme a un acuerdo para compartir propinas equitativamente, declare sólo las propinas que reciba y retenga. State tax forms and instructions No declare a su empleador ninguna parte de las propinas que reciba para luego entregárselas a otros empleados. State tax forms and instructions Sin embargo, tiene que declarar las propinas que reciba de otros empleados. State tax forms and instructions    No declare a su empleador el valor de las propinas que no reciba en efectivo, tales como boletos o pases. State tax forms and instructions No se pagan impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuestos de la jubilación ferroviaria sobre estas propinas. State tax forms and instructions Cómo se declaran las propinas. State tax forms and instructions    Si su empleador no le proporciona otro medio para declarar las propinas, puede usar el Formulario 4070-PR, en español (o el Formulario 4070, en inglés). State tax forms and instructions Escriba la información requerida en el formulario, incluya su firma y la fecha y entrégueselo a su empleador. State tax forms and instructions Si desea obtener copias del formulario para un año completo, comuníquese con el IRS o pídale a su empleador la Publicación 1244-PR (o la Publicación 1244, en inglés). State tax forms and instructions   Si no usa el Formulario 4070-PR (o el Formulario 4070, en inglés), entréguele a su empleador un informe con la información siguiente: Su nombre, dirección y número de Seguro Social. State tax forms and instructions El nombre de su empleador, la dirección y el nombre del establecimiento (si es diferente al nombre del empleador). State tax forms and instructions El mes (o las fechas de cualquier período más corto) en el cual usted recibió propinas. State tax forms and instructions El total de propinas que se tienen que declarar para ese período. State tax forms and instructions Usted tiene que firmar y fechar el informe. State tax forms and instructions Cerciórese de guardar una copia junto con sus documentos tributarios u otros documentos personales. State tax forms and instructions   Su empleador puede requerirle que declare sus propinas más de una vez al mes. State tax forms and instructions Sin embargo, el informe no puede abarcar un período mayor de un mes natural. State tax forms and instructions Informe electrónico de propinas. State tax forms and instructions   Su empleador puede exigir que facilite su informe de propinas por medios electrónicos. State tax forms and instructions Cuándo debe declarar las propinas. State tax forms and instructions   Entregue a su empleador el informe correspondiente a cada mes, a más tardar el día 10 del mes siguiente. State tax forms and instructions Si el día 10 cae en sábado, domingo o día feriado legal, entonces entréguele el informe a su empleador el próximo día siempre que no sea sábado, domingo o día feriado legal. State tax forms and instructions Ejemplo. State tax forms and instructions Tiene que declararle a su empleador la cantidad de propinas que recibió en septiembre del año 2014 a más tardar el día 10 de octubre de 2014. State tax forms and instructions Declaración final. State tax forms and instructions   Si deja de trabajar durante el mes, puede declarar las propinas recibidas cuando termine su empleo. State tax forms and instructions Multa por no declarar las propinas. State tax forms and instructions   Si no le declara a su empleador las propinas que recibió, tal como se requiere, puede estar sujeto a que se le imponga una multa equivalente al 50% de los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria que adeude sobre las propinas que no declaró. State tax forms and instructions (Para información sobre estos impuestos, vea Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos, más adelante). State tax forms and instructions La cantidad de la multa que se impone es adicional a los impuestos que adeude. State tax forms and instructions   Puede evitar que esta multa le sea impuesta si puede demostrar que existe causa razonable por la cual no le declaró las propinas a su empleador. State tax forms and instructions Para hacerlo, adjunte un documento escrito a su declaración de impuestos explicando la razón por la cual no declaró la cantidad de propinas que recibió. State tax forms and instructions Entrega de dinero al empleador para el pago de los impuestos. State tax forms and instructions   Es posible que lo que gana normalmente no sea suficiente para que su empleador le retenga todos los impuestos que adeude sobre su salario normal más las propinas que recibe. State tax forms and instructions Si esto ocurre, puede entregarle dinero a su empleador hasta el cierre del año natural para pagar el resto de los impuestos. State tax forms and instructions   Si no le entrega dinero suficiente a su empleador, el mismo aplicará su salario normal y todo dinero que usted le entregue para los impuestos, en el orden siguiente: Todos los impuestos sobre su salario normal. State tax forms and instructions Los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuestos de la jubilación ferroviaria sobre las propinas que declaró. State tax forms and instructions Los impuestos federales, estatales y locales sobre los ingresos sobre las propinas que declaró. State tax forms and instructions    Su empleador puede descontar de su próximo salario todo impuesto que quede pendiente. State tax forms and instructions Si al final del año aún no se le han retenido suficientes impuestos, usted puede estar sujeto a una multa por pago insuficiente de impuestos estimados. State tax forms and instructions Vea la Publicación 505, Tax Withholding and Estimated Tax (Retención de impuestos e impuesto estimado), en inglés, para más información. State tax forms and instructions    Impuestos no recaudados. State tax forms and instructions Usted tiene que informar en su declaración de impuestos todo impuesto del Seguro Social y Medicare o impuestos de la jubilación ferroviaria que no se recaudaron al final del año 2013. State tax forms and instructions Estos impuestos no recaudados aparecerán en su Formulario W-2 del año 2013. State tax forms and instructions Vea el tema titulado Cómo se declaran los impuestos no recaudados del Seguro Social, Medicare o impuesto de la jubilación ferroviaria sobre propinas declaradas a su empleador , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos, a continuación. State tax forms and instructions Cómo se Declaran las Propinas en la Declaración de Impuestos Cómo se declaran las propinas. State tax forms and instructions    Declare las propinas que recibió junto con su salario en la línea 7 del Formulario 1040, la línea 7 del Formulario 1040A o en la línea 1 del Formulario 1040EZ. State tax forms and instructions Qué propinas se tienen que declarar. State tax forms and instructions   Usted tiene que informar en su declaración de impuestos todas las propinas que recibió en 2013. State tax forms and instructions Incluya las que recibió en efectivo y las que no fueron en efectivo. State tax forms and instructions Toda propina que usted haya declarado en 2013 a su empleador está incluida en los salarios que aparecen en el recuadro 1 de su Formulario W-2. State tax forms and instructions Sume a la cantidad del recuadro 1 solamente las propinas que usted no le declaró a su empleador. State tax forms and instructions    Si recibió $20 o más en propinas en efectivo o cargadas a tarjetas de crédito o débito en un mes y no las declaró a su empleador, vea más adelante el tema titulado Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador . State tax forms and instructions    Si usted no llevó un registro diario de las propinas que recibió, tal como se requiere, y aparece una cantidad en el recuadro 8 del Formulario W-2, vea más adelante la sección titulada Asignación de Propinas . State tax forms and instructions   Si usted llevó un registro diario y declaró a su empleador todas las propinas que recibió, tal como se requiere conforme a las reglas explicadas anteriormente, añada a la cantidad que aparece en el recuadro 1 de su Formulario W-2 las siguientes propinas: Las propinas que recibió tanto en efectivo como cargadas a tarjetas de crédito o débito que fueron menos de $20 en un mes cualquiera. State tax forms and instructions El valor de las propinas que no recibió en efectivo, tales como boletos, pases u otros artículos de valor. State tax forms and instructions Ejemplo. State tax forms and instructions Mariano Almendares comenzó a trabajar en el Restaurante Océano Azul (su único empleador en el año 2013) el día 30 de junio y recibió $10,000 en salarios durante el año. State tax forms and instructions Mariano llevó un registro diario de las propinas que recibió durante el año, el cual muestra que en junio recibió $18 en propinas y en el resto del año recibió $7,000 en propinas. State tax forms and instructions Al Sr. State tax forms and instructions Almendares no se le requirió declararle a su empleador las propinas que recibió en junio, pero sí le declaró todas las propinas que recibió durante el resto del año, tal como se requiere. State tax forms and instructions El Formulario W-2 que el Sr. State tax forms and instructions Almendares recibió del Restaurante Océano Azul muestra $17,000 ($10,000 de salario más $7,000 de propinas declaradas) en el recuadro 1. State tax forms and instructions El Sr. State tax forms and instructions Almendares añade a esa cantidad los $18 de propinas que no le declaró al empleador y declara $17,018 como salario en su declaración de impuestos. State tax forms and instructions Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador. State tax forms and instructions    Si en un mes recibió $20 o más en propinas en efectivo o cargadas a tarjetas de crédito o débito en algún empleo y no declaró todas esas propinas a su empleador, tiene que declarar como impuesto adicional los impuestos del Seguro Social, Medicare e Impuesto Adicional del Medicare sobre las propinas que no declaró a su empleador. State tax forms and instructions Para declarar estos impuestos, tiene que presentar una declaración aunque de otro modo no tuviera que presentarla. State tax forms and instructions Para hacerlo, tiene que usar el Formulario 1040. State tax forms and instructions (No puede presentar el Formulario 1040EZ ni el Formulario 1040A). State tax forms and instructions    Use el Formulario 4137, Social Security and Medicare Tax on Unreported Tip Income (Impuestos del Seguro Social y de Medicare sobre el ingreso de propinas no declaradas), en inglés, para calcular los impuestos al Seguro Social y al Medicare. State tax forms and instructions Anote el impuesto en su declaración como se indica y adjunte el Formulario 4137 debidamente completado a la misma. State tax forms and instructions Use el Formulario 8959, en inglés, para calcular el Impuesto Adicional del Medicare. State tax forms and instructions    Si usted está sujeto a la Railroad Retirement Tax Act (Ley Tributaria para la Jubilación Ferroviaria), no puede utilizar el Formulario 4137 para pagar el impuesto para la jubilación ferroviaria sobre propinas no declaradas. State tax forms and instructions Para obtener crédito para la jubilación ferroviaria, tiene que declarar sus propinas a su empleador. State tax forms and instructions Cómo se declaran los impuestos no recaudados del Seguro Social, Medicare o impuesto de la jubilación ferroviaria sobre propinas declaradas a su empleador. State tax forms and instructions   Usted podría tener impuestos sin recaudar si su salario normal no es suficiente para que su empleador retenga todos los impuestos adeudados y si no le dio a su empleador dinero suficiente para pagar el resto de los impuestos. State tax forms and instructions Para más información, vea Entrega de dinero al empleador para el pago de los impuestos , bajo Cómo Declarar las Propinas a su Empleador, anteriormente. State tax forms and instructions   Si su empleador no pudo recaudar todos los impuestos al Seguro Social y al Medicare o impuesto de la jubilación ferroviaria que usted adeuda sobre propinas declaradas para 2013, los impuestos por recaudar se mostrarán en el recuadro 12 del Formulario W-2 (códigos A y B). State tax forms and instructions Tiene que declarar estas cantidades como impuesto adicional en su declaración. State tax forms and instructions A diferencia de la parte no recaudada del impuesto regular al Medicare (1. State tax forms and instructions 45%), el Impuesto Adicional del Medicare no recaudado no se declara en el recuadro 12 del Formulario W-2 con el código B. State tax forms and instructions    Para declarar estos impuestos no recaudados, tiene que presentar una declaración aunque no tuviera que presentarla de otro modo. State tax forms and instructions Tiene que declarar estos impuestos en la línea 60 del Formulario 1040. State tax forms and instructions Vea las instrucciones para la línea 60 del Formulario 1040, disponibles en inglés. State tax forms and instructions (No puede presentar el Formulario 1040EZ ni el Formulario 1040A). State tax forms and instructions Asignación de Propinas Si su empleador le asignó propinas, las mismas aparecen por separado en el recuadro 8 de su Formulario W-2. State tax forms and instructions Estas propinas no están incluidas en el recuadro 1 con sus salarios y propinas declaradas. State tax forms and instructions Si el recuadro 8 está en blanco, lo que se explica en esta sección no es aplicable en su caso. State tax forms and instructions ¿Qué son propinas asignadas?   Éstas son propinas que su empleador le asignó, además de las que usted le declaró para el año. State tax forms and instructions Su empleador habrá hecho esto únicamente si: Usted trabajó en un establecimiento (restaurante, bar o negocio similar) que tiene que asignar las propinas a los empleados y La cantidad de propinas que declaró a su empleador fue menos de su parte del 8% de las ventas de comidas y bebidas del establecimiento donde usted trabajó. State tax forms and instructions De las propinas asignadas, no se retienen impuestos sobre los ingresos, Seguro Social, Medicare, Impuesto Adicional del Medicare ni impuestos de la jubilación ferroviaria. State tax forms and instructions ¿Cómo se calcula su asignación de propinas?   Las propinas que se le asignan a usted son su parte de una cantidad calculada restando las propinas declaradas de todos los empleados del 8% (u otra tasa más baja aprobada) de las ventas de comida y bebida (que no sean ventas de comida para llevar por los clientes o ventas con un cargo por servicio del 10% o más). State tax forms and instructions Su parte de esa cantidad fue calculada utilizando un método provisto por un acuerdo laboral entre empleador y empleado o por un método provisto por los reglamentos del IRS basado en las ventas hechas o las horas trabajadas por los empleados. State tax forms and instructions Para más información sobre el método de asignación exacto utilizado, consulte a su empleador. State tax forms and instructions ¿Tiene que incluir en la declaración sus propinas asignadas?   Tiene que incluir en la declaración de impuestos todas las propinas que recibió en 2013, incluyendo las propinas pagadas en efectivo como las no pagadas en efectivo. State tax forms and instructions Todas las propinas que usted haya declarado en 2013 a su empleador están incluidas en los salarios que aparecen en el recuadro 1 de su Formulario W-2. State tax forms and instructions Sume a la cantidad del recuadro 1 solamente las propinas que usted no le declaró a su empleador. State tax forms and instructions Esto tiene que incluir toda propina asignada mostrada en el recuadro 8 de su(s) Formulario(s) W-2, a menos que tenga registros confiables que muestren que recibió menos propinas en el año que las cifras asignadas. State tax forms and instructions   Vea los temas titulados Qué propinas se tienen que declarar , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos y Cómo Mantener un Registro Diario de Propinas , anteriormente. State tax forms and instructions Cómo declarar las propinas asignadas. State tax forms and instructions   Declare la cantidad en el recuadro 1 y las propinas asignadas en el recuadro 8 de su(s) Formulario(s) W-2 como salario en la línea 7 del Formulario 1040, en la línea 8 del Formulario 1040NR o en la línea 3 del Formulario 1040NR-EZ. State tax forms and instructions (No puede presentar el Formulario 1040A ni el Formulario 1040EZ cuando se tienen propinas asignadas). State tax forms and instructions    Debido a que los impuestos del Seguro Social, Medicare o Impuesto Adicional del Medicare no fueron retenidos de las propinas asignadas, tiene que declararlos como impuestos adicionales en su declaración. State tax forms and instructions Complete el Formulario 4137 e incluya las propinas asignadas en la línea 1 del formulario. State tax forms and instructions Vea Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos. State tax forms and instructions Prev  Up  Next   Home   More Online Publications
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The State Tax Forms And Instructions

State tax forms and instructions Publication 1212 - Main Content Table of Contents Definitions Debt Instruments on the OID List Debt Instruments Not on the OID List Information for Brokers and Other MiddlemenShort-Term Obligations Redeemed at Maturity Long-Term Debt Instruments Certificates of Deposit Bearer Bonds and Coupons Backup Withholding Information for Owners of OID Debt InstrumentsExceptions. State tax forms and instructions Adjustment for premium. State tax forms and instructions Adjustment for acquisition premium. State tax forms and instructions Adjustment for market discount. State tax forms and instructions Form 1099-OID How To Report OID Figuring OID on Long-Term Debt Instruments Figuring OID on Stripped Bonds and Coupons How To Get Tax HelpLow Income Taxpayer Clinics Definitions The following terms are used throughout this publication. State tax forms and instructions “Original issue discount” is defined first. State tax forms and instructions The other terms are listed alphabetically. State tax forms and instructions Original issue discount (OID). State tax forms and instructions   OID is a form of interest. State tax forms and instructions It is the excess of a debt instrument's stated redemption price at maturity over its issue price (acquisition price for a stripped bond or coupon). State tax forms and instructions Zero coupon bonds and debt instruments that pay no stated interest until maturity are examples of debt instruments that have OID. State tax forms and instructions Accrual period. State tax forms and instructions   An accrual period is an interval of time used to measure OID. State tax forms and instructions The length of an accrual period can be 6 months, a year, or some other period, depending on when the debt instrument was issued. State tax forms and instructions Acquisition premium. State tax forms and instructions   Acquisition premium is the excess of a debt instrument's adjusted basis immediately after purchase, including purchase at original issue, over the debt instrument's adjusted issue price at that time. State tax forms and instructions A debt instrument does not have acquisition premium, however, if the debt instrument was purchased at a premium. State tax forms and instructions See Premium, later. State tax forms and instructions Adjusted issue price. State tax forms and instructions   The adjusted issue price of a debt instrument at the beginning of an accrual period is used to figure the OID allocable to that period. State tax forms and instructions In general, the adjusted issue price at the beginning of the debt instrument's first accrual period is its issue price. State tax forms and instructions The adjusted issue price at the beginning of any subsequent accrual period is the sum of the issue price and all the OID includible in income before that accrual period minus any payment previously made on the debt instrument, other than a payment of qualified stated interest. State tax forms and instructions Debt instrument. State tax forms and instructions   The term “debt instrument” means any instrument or contractual arrangement that constitutes indebtedness under general principles of federal income tax law (including, for example, a bond, debenture, note, certificate, or other evidence of indebtedness). State tax forms and instructions It generally does not include an annuity contract. State tax forms and instructions Issue price. State tax forms and instructions   For debt instruments listed in Section I-A and Section I-B, the issue price generally is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of these instruments was sold. State tax forms and instructions Market discount. State tax forms and instructions   Market discount arises when a debt instrument purchased in the secondary market has decreased in value since its issue date, generally because of an increase in interest rates. State tax forms and instructions An OID debt instrument has market discount if your adjusted basis in the debt instrument immediately after you acquired it (usually its purchase price) was less than the debt instrument's issue price plus the total OID that accrued before you acquired it. State tax forms and instructions The market discount is the difference between the issue price plus accrued OID and your adjusted basis. State tax forms and instructions Premium. State tax forms and instructions   A debt instrument is purchased at a premium if its adjusted basis immediately after purchase is greater than the total of all amounts payable on the debt instrument after the purchase date, other than qualified stated interest. State tax forms and instructions The premium is the excess of the adjusted basis over the payable amounts. State tax forms and instructions See Publication 550 for information on the tax treatment of bond premium. State tax forms and instructions Qualified stated interest. State tax forms and instructions   In general, qualified stated interest is stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually over the term of the debt instrument at a single fixed rate. State tax forms and instructions Stated redemption price at maturity. State tax forms and instructions   A debt instrument's stated redemption price at maturity is the sum of all amounts (principal and interest) payable on the debt instrument other than qualified stated interest. State tax forms and instructions Yield to maturity (YTM). State tax forms and instructions   In general, the YTM is the discount rate that, when used in figuring the present value of all principal and interest payments, produces an amount equal to the issue price of the debt instrument. State tax forms and instructions The YTM is generally shown on the face of the debt instrument or in the literature you receive from your broker. State tax forms and instructions If you do not have this information, consult your broker, tax advisor, or the issuer. State tax forms and instructions Debt Instruments on the OID List The OID list on the IRS website can be used by brokers and other middlemen to prepare information returns. State tax forms and instructions If you own a listed debt instrument, you generally should not rely on the information in the OID list to determine (or compare) the OID to be reported on your tax return. State tax forms and instructions The OID amounts listed are figured without reference to the price or date at which you acquired the debt instrument. State tax forms and instructions For information about determining the OID to be reported on your tax return, see the instructions for figuring OID under Information for Owners of OID Debt Instruments, later. State tax forms and instructions The following discussions explain what information is contained in each section of the list. State tax forms and instructions Section I. State tax forms and instructions   This section contains publicly offered, long-term debt instruments. State tax forms and instructions Section I-A: Corporate Debt Instruments Issued Before 1985. State tax forms and instructions Section I-B: Corporate Debt Instruments Issued After 1984. State tax forms and instructions Section I-C: Inflation-Indexed Debt Instruments. State tax forms and instructions For each publicly offered debt instrument in Section I, the list contains the following information. State tax forms and instructions The name of the issuer. State tax forms and instructions The Committee on Uniform Security Identification Procedures (CUSIP) number. State tax forms and instructions The issue date. State tax forms and instructions The maturity date. State tax forms and instructions The issue price expressed as a percent of principal or of stated redemption price at maturity. State tax forms and instructions The annual stated or coupon interest rate. State tax forms and instructions (This rate is shown as 0. State tax forms and instructions 00 if no annual interest payments are provided. State tax forms and instructions ) The yield to maturity will be added to Section I-B for bonds issued after December 31, 2006. State tax forms and instructions The total OID accrued up to January 1 of a calendar year. State tax forms and instructions (This information is not available for every instrument. State tax forms and instructions ) For long-term debt instruments issued after July 1, 1982, the daily OID for the accrual periods falling in a calendar year and a subsequent year. State tax forms and instructions The total OID per $1,000 of principal or maturity value for a calendar year and a subsequent year. State tax forms and instructions Section II. State tax forms and instructions   This section contains stripped coupons and principal components of U. State tax forms and instructions S. State tax forms and instructions Treasury and Government-Sponsored Enterprise debt instruments. State tax forms and instructions These stripped components are available through the Department of the Treasury's Separate Trading of Registered Interest and Principal of Securities (STRIPS) program and government-sponsored enterprises such as the Resolution Funding Corporation. State tax forms and instructions This section also includes debt instruments backed by U. State tax forms and instructions S. State tax forms and instructions Treasury securities that represent ownership interests in those securities. State tax forms and instructions   The obligations listed in Section II are arranged by maturity date. State tax forms and instructions The amounts listed are the total OID for a calendar year per $1,000 of redemption price. State tax forms and instructions Section III. State tax forms and instructions   This section contains short-term discount obligations. State tax forms and instructions Section III-A: Short-Term U. State tax forms and instructions S. State tax forms and instructions Treasury Bills. State tax forms and instructions Section III-B: Federal Home Loan Banks. State tax forms and instructions Section III-C: Federal National Mortgage Association. State tax forms and instructions Section III-D: Federal Farm Credit Banks. State tax forms and instructions Section III-E: Federal Home Loan Mortgage Corporation. State tax forms and instructions Section III-F: Federal Agricultural Mortgage Corporation. State tax forms and instructions    Information that supplements Section III-A is available on the Internet at http://www. State tax forms and instructions treasurydirect. State tax forms and instructions gov/tdhome. State tax forms and instructions htm. State tax forms and instructions   The short-term obligations listed in this section are arranged by maturity date. State tax forms and instructions For each obligation, the list contains the CUSIP number, maturity date, issue date, issue price (expressed as a percent of principal), and discount to be reported as interest for a calendar year per $1,000 of redemption price. State tax forms and instructions Brokers and other middlemen should rely on the issue price information in Section III only if they are unable to determine the price actually paid by the owner. State tax forms and instructions Debt Instruments Not on the OID List The list of debt instruments discussed earlier does not contain the following items. State tax forms and instructions U. State tax forms and instructions S. State tax forms and instructions savings bonds. State tax forms and instructions Certificates of deposit and other face-amount certificates issued at a discount, including syndicated certificates of deposit. State tax forms and instructions Obligations issued by tax-exempt organizations. State tax forms and instructions OID debt instruments that matured or were entirely called by the issuer before the tables were posted on the IRS website. State tax forms and instructions Mortgage-backed securities and mortgage participation certificates. State tax forms and instructions Long-term OID debt instruments issued before May 28, 1969. State tax forms and instructions Short-term obligations, other than the obligations listed in Section III. State tax forms and instructions Debt instruments issued at a discount by states or their political subdivisions. State tax forms and instructions REMIC regular interests and CDOs. State tax forms and instructions Commercial paper and banker's acceptances issued at a discount. State tax forms and instructions Obligations issued at a discount by individuals. State tax forms and instructions Foreign obligations not traded in the United States and obligations not issued in the United States. State tax forms and instructions Information for Brokers and Other Middlemen The following discussions contain specific instructions for brokers and middlemen who hold or redeem a debt instrument for the owner. State tax forms and instructions In general, you must file a Form 1099 for the debt instrument if the interest or OID to be included in the owner's income for a calendar year totals $10 or more. State tax forms and instructions You also must file a Form 1099 if you were required to deduct and withhold tax, even if the interest or OID is less than $10. State tax forms and instructions See Backup Withholding, later. State tax forms and instructions If you must file a Form 1099, furnish a copy to the owner of the debt instrument by January 31 in the year it is due. State tax forms and instructions File all your Forms 1099 with the IRS, accompanied by Form 1096, by February 28 in the year it is due (March 31 if you file electronically). State tax forms and instructions Electronic payee statements. State tax forms and instructions   You can issue Form 1099-OID electronically with the consent of the recipient. State tax forms and instructions More information. State tax forms and instructions   For more information, including penalties for failure to file (or furnish) required information returns or statements, see the General Instructions for Certain Information Returns (Forms 1098, 1099, 3921, 3922, 5498, and W-2G) for the appropriate calendar year. State tax forms and instructions Short-Term Obligations Redeemed at Maturity If you redeem a short-term discount obligation for the owner at maturity, you must report the discount as interest on Form 1099-INT. State tax forms and instructions To figure the discount, use the purchase price shown on the owner's copy of the purchase confirmation receipt or similar record, or the price shown in your transaction records. State tax forms and instructions If you sell the obligation for the owner before maturity, you must file Form 1099-B to reflect the gross proceeds to the seller. State tax forms and instructions Do not report the accrued discount to the date of sale on either Form 1099-INT or Form 1099-OID. State tax forms and instructions If the owner's purchase price cannot be determined, figure the discount as if the owner had purchased the obligation at its original issue price. State tax forms and instructions A special rule is used to determine the original issue price for information reporting on U. State tax forms and instructions S. State tax forms and instructions Treasury bills (T-bills) listed in Section III-A. State tax forms and instructions Under this rule, you treat as the original issue price of the T-bill the noncompetitive (weighted average of accepted auction bids) discount price for the longest-maturity T-bill maturing on the same date as the T-bill being redeemed. State tax forms and instructions This noncompetitive discount price is the issue price (expressed as a percent of principal) shown in Section III-A. State tax forms and instructions A similar rule is used to figure the discount on short-term discount obligations issued by the organizations listed in Section III-B through Section III-F. State tax forms and instructions Example 1. State tax forms and instructions There are 13-week and 26-week T-bills maturing on the same date as the T-bill being redeemed. State tax forms and instructions The price actually paid by the owner cannot be established by owner or middleman records. State tax forms and instructions You treat as the issue price of the T-bill the noncompetitive discount price (expressed as a percent of principal) shown in Section III-A for a 26-week bill maturing on the same date as the T-bill redeemed. State tax forms and instructions The interest you report on Form 1099-INT is the OID (per $1,000 of principal) shown in Section III-A for that obligation. State tax forms and instructions Long-Term Debt Instruments If you hold a long-term OID debt instrument as a nominee for the true owner, you generally must file Form 1099-OID. State tax forms and instructions For this purpose, you can rely on Section I of the OID list to determine the following information. State tax forms and instructions Whether a debt instrument has OID. State tax forms and instructions The OID to be reported on the Form 1099-OID. State tax forms and instructions In general, you must report OID on publicly offered, long-term debt instruments listed in Section I. State tax forms and instructions You also can report OID on other long-term debt instruments. State tax forms and instructions Form 1099-OID. State tax forms and instructions   On Form 1099-OID for a calendar year show the following information. State tax forms and instructions Box 1. State tax forms and instructions The OID for the actual dates the owner held the debt instruments during a calendar year. State tax forms and instructions To determine this amount, see Figuring OID, next. State tax forms and instructions Box 2. State tax forms and instructions The qualified stated interest paid or credited during the calendar year. State tax forms and instructions Interest reported here is not reported on Form 1099-INT. State tax forms and instructions The qualified stated interest on Treasury inflation-protected securities may be reported on Form 1099-INT in box 3 instead. State tax forms and instructions Box 3. State tax forms and instructions Any interest or principal forfeited because of an early withdrawal that the owner can deduct from gross income. State tax forms and instructions Do not reduce the amounts in boxes 1 and 2 by the forfeiture. State tax forms and instructions Box 4. State tax forms and instructions Any backup withholding for this debt instrument. State tax forms and instructions Box 7. State tax forms and instructions The CUSIP number, if any. State tax forms and instructions If there is no CUSIP number, give a description of the debt instrument, including the abbreviation for the stock exchange, the abbreviation used by the stock exchange for the issuer, the coupon rate, and the year of maturity (for example, NYSE XYZ 12. State tax forms and instructions 50 2006). State tax forms and instructions If the issuer of the debt instrument is other than the payer, show the name of the issuer in this box. State tax forms and instructions Box 8. State tax forms and instructions The OID on a U. State tax forms and instructions S. State tax forms and instructions Treasury obligation for the part of the year the owner held the debt instrument. State tax forms and instructions Box 9. State tax forms and instructions Investment expenses passed on to holders of a single-class REMIC. State tax forms and instructions Boxes 10-12. State tax forms and instructions Use to report any state income tax withheld for this debt instrument. State tax forms and instructions Figuring OID. State tax forms and instructions   You can determine the OID on a long-term debt instrument by using either of the following. State tax forms and instructions Section I of the OID list. State tax forms and instructions The income tax regulations. State tax forms and instructions Using Section I. State tax forms and instructions   If the owner held the debt instrument for the entire calendar year, report the OID shown in Section I for the calendar year. State tax forms and instructions Because OID is listed for each $1,000 of stated redemption price at maturity, you must adjust the listed amount to reflect the debt instrument's actual stated redemption price at maturity. State tax forms and instructions For example, if the debt instrument's stated redemption price at maturity is $500, report one-half the listed OID. State tax forms and instructions   If the owner held the debt instrument for less than the entire calendar year, figure the OID to report as follows. State tax forms and instructions Look up the daily OID for the first accrual period in the calendar year during which the owner held the debt instrument. State tax forms and instructions Multiply the daily OID by the number of days the owner held the debt instrument during that accrual period. State tax forms and instructions Repeat steps (1) and (2) for any remaining accrual periods for the year during which the owner held the debt instrument. State tax forms and instructions Add the results in steps (2) and (3) to determine the owner's OID per $1,000 of stated redemption price at maturity. State tax forms and instructions If necessary, adjust the OID in (4) to reflect the debt instrument's stated redemption price at maturity. State tax forms and instructions Report the result on Form 1099-OID in box 1. State tax forms and instructions Using the income tax regulations. State tax forms and instructions   Instead of using Section I to figure OID, you can use the regulations under sections 1272 through 1275 of the Internal Revenue Code. State tax forms and instructions For example, under the regulations, you can use monthly accrual periods in figuring OID for a debt instrument issued after April 3, 1994, that provides for monthly payments. State tax forms and instructions (If you use Section I-B, the OID is figured using 6-month accrual periods. State tax forms and instructions )   For a general explanation of the rules for figuring OID under the regulations, see Figuring OID on Long-Term Debt Instruments under Information for Owners of OID Debt Instruments, later. State tax forms and instructions Certificates of Deposit If you hold a bank certificate of deposit (CD) as a nominee, you must determine whether the CD has OID and any OID includible in the income of the owner. State tax forms and instructions You must file an information return showing the reportable interest and OID, if any, on the CD. State tax forms and instructions These rules apply whether or not you sold the CD to the owner. State tax forms and instructions Report OID on a CD in the same way as OID on other debt instruments. State tax forms and instructions See Short-Term Obligations Redeemed at Maturity and Long-Term Debt Instruments, earlier. State tax forms and instructions Bearer Bonds and Coupons If a coupon from a bearer bond is presented to you for collection before the bond matures, you generally must report the interest on Form 1099-INT. State tax forms and instructions However, do not report the interest if either of the following apply. State tax forms and instructions You hold the bond as a nominee for the true owner. State tax forms and instructions The payee is a foreign person. State tax forms and instructions See Payments to foreign person under Backup Withholding, later. State tax forms and instructions Because you cannot assume the presenter of the coupon also owns the bond, you should not report OID on the bond on Form 1099-OID. State tax forms and instructions The coupon may have been “stripped” (separated) from the bond and separately purchased. State tax forms and instructions However, if a long-term bearer bond on the OID list is presented to you for redemption upon call or maturity, you should prepare a Form 1099-OID showing the OID for that calendar year, as well as any coupon interest payments collected at the time of redemption. State tax forms and instructions Backup Withholding If you report OID on Form 1099-OID or interest on Form 1099-INT for a calendar year, you may be required to apply backup withholding to the reportable payment at a rate of 28%. State tax forms and instructions The backup withholding is deducted at the time a cash payment is made. State tax forms and instructions See Pub. State tax forms and instructions 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), for more information. State tax forms and instructions Backup withholding generally applies in the following situations. State tax forms and instructions The payee does not give you a taxpayer identification number (TIN). State tax forms and instructions The IRS notifies you that the payee gave an incorrect TIN. State tax forms and instructions The IRS notifies you that the payee is subject to backup withholding due to payee underreporting. State tax forms and instructions For debt instruments acquired after 1983: The payee does not certify, under penalties of perjury, that he or she is not subject to backup withholding under (3), or The payee does not certify, under penalties of perjury, that the TIN given is correct. State tax forms and instructions However, for short-term discount obligations (other than government obligations), bearer bonds and coupons, and U. State tax forms and instructions S. State tax forms and instructions savings bonds, backup withholding applies only if the payee does not give you a TIN or gives you an obviously incorrect number for a TIN. State tax forms and instructions Short-term obligations. State tax forms and instructions   Backup withholding applies to OID on a short-term obligation only when the OID is paid at maturity. State tax forms and instructions However, backup withholding applies to any interest payable before maturity when the interest is paid or credited. State tax forms and instructions   If the owner of a short-term obligation at maturity is not the original owner and can establish the purchase price of the obligation, the amount subject to backup withholding must be determined by treating the purchase price as the issue price. State tax forms and instructions However, you can choose to disregard that price if it would require significant manual intervention in the computer or recordkeeping system used for the obligation. State tax forms and instructions If the purchase price of a listed obligation is not established or is disregarded, you must use the issue price shown in Section III. State tax forms and instructions Long-term obligations. State tax forms and instructions   If no cash payments are made on a long-term obligation before maturity, backup withholding applies only at maturity. State tax forms and instructions The amount subject to backup withholding is the OID includible in the owner's gross income for the calendar year when the obligation matures. State tax forms and instructions The amount to be withheld is limited to the cash paid. State tax forms and instructions Registered long-term obligations with cash payments. State tax forms and instructions   If a registered long-term obligation has cash payments before maturity, backup withholding applies when a cash payment is made. State tax forms and instructions The amount subject to backup withholding is the total of the qualified stated interest (defined earlier under Definitions) and OID includible in the owner's gross income for the calendar year when the payment is made. State tax forms and instructions If more than one cash payment is made during the year, the OID subject to withholding for the year must be allocated among the expected cash payments in the ratio that each bears to the total of the expected cash payments. State tax forms and instructions For any payment, the required withholding is limited to the cash paid. State tax forms and instructions Payee not the original owner. State tax forms and instructions   If the payee is not the original owner of the obligation, the OID subject to backup withholding is the OID includible in the gross income of all owners during the calendar year (without regard to any amount paid by the new owner at the time of transfer). State tax forms and instructions The amount subject to backup withholding at maturity of a listed obligation must be determined using the issue price shown in Section I. State tax forms and instructions Bearer long-term obligations with cash payments. State tax forms and instructions   If a bearer long-term obligation has cash payments before maturity, backup withholding applies when the cash payments are made. State tax forms and instructions For payments before maturity, the amount subject to withholding is the qualified stated interest (defined earlier under Definitions) includible in the owner's gross income for the calendar year. State tax forms and instructions For a payment at maturity, the amount subject to withholding is only the total of any qualified stated interest paid at maturity and the OID includible in the owner's gross income for the calendar year when the obligation matures. State tax forms and instructions The required withholding at maturity is limited to the cash paid. State tax forms and instructions Sales and redemptions. State tax forms and instructions   If you report the gross proceeds from a sale, exchange, or redemption of a debt instrument on Form 1099-B for a calendar year, you may be required to withhold 28% of the amount reported. State tax forms and instructions Backup withholding applies in the following situations. State tax forms and instructions The payee does not give you a TIN. State tax forms and instructions The IRS notifies you that the payee gave an incorrect TIN. State tax forms and instructions For debt instruments held in an account opened after 1983, the payee does not certify, under penalties of perjury, that the TIN given is correct. State tax forms and instructions Payments outside the United States to U. State tax forms and instructions S. State tax forms and instructions person. State tax forms and instructions   The requirements for backup withholding and information reporting apply to payments of OID and interest made outside the United States to a U. State tax forms and instructions S. State tax forms and instructions person, a controlled foreign corporation, or a foreign person at least 50% of whose income for the preceding 3-year period is effectively connected with the conduct of a U. State tax forms and instructions S. State tax forms and instructions trade or business. State tax forms and instructions Payments to foreign person. State tax forms and instructions   The following discussions explain the rules for backup withholding and information reporting on payments to foreign persons. State tax forms and instructions U. State tax forms and instructions S. State tax forms and instructions -source amount. State tax forms and instructions   Backup withholding and information reporting are not required for payments of U. State tax forms and instructions S. State tax forms and instructions -source OID, interest, or proceeds from a sale or redemption of an OID instrument if the payee has given you proof (generally the appropriate Form W-8 or an acceptable substitute) that the payee is a foreign person. State tax forms and instructions A U. State tax forms and instructions S. State tax forms and instructions resident is not a foreign person. State tax forms and instructions For proof of the payee's foreign status, you can rely on the appropriate Form W-8 or on documentary evidence for payments made outside the United States to an offshore account or, in case of broker proceeds, a sale effected outside the United States. State tax forms and instructions Receipt of the appropriate Form W-8 does not relieve you from information reporting and backup withholding if you actually know the payee is a U. State tax forms and instructions S. State tax forms and instructions person. State tax forms and instructions   For information about the 28% withholding tax that may apply to payments of U. State tax forms and instructions S. State tax forms and instructions -source OID or interest to foreign persons, see Publication 515. State tax forms and instructions Foreign-source amount. State tax forms and instructions   Backup withholding and information reporting are not required for payments of foreign-source OID and interest made outside the United States. State tax forms and instructions However, if the payments are made inside the United States, the requirements for backup withholding and information reporting will apply unless the payee has given you the appropriate Form W-8 or acceptable substitute as proof that the payee is a foreign person. State tax forms and instructions More information. State tax forms and instructions   For more information about backup withholding and information reporting on foreign-source amounts or payments to foreign persons, see Regulations section 1. State tax forms and instructions 6049-5. State tax forms and instructions Information for Owners of OID Debt Instruments This section is for persons who prepare their own tax returns. State tax forms and instructions It discusses the income tax rules for figuring and reporting OID on long-term debt instruments. State tax forms and instructions It also includes a similar discussion for stripped bonds and coupons, such as zero coupon bonds available through the Department of the Treasury's STRIPS program and government-sponsored enterprises such as the Resolution Funding Corporation. State tax forms and instructions However, the information provided does not cover every situation. State tax forms and instructions More information can be found in the regulations under sections 1271 through 1275 of the Internal Revenue Code. State tax forms and instructions Including OID in income. State tax forms and instructions   Generally, you include OID in income as it accrues each year, whether or not you receive any payments from the debt instrument issuer. State tax forms and instructions Exceptions. State tax forms and instructions   The rules for including OID in income as it accrues generally do not apply to the following debt instruments. State tax forms and instructions U. State tax forms and instructions S. State tax forms and instructions savings bonds. State tax forms and instructions Tax-exempt obligations. State tax forms and instructions (However, see Tax-Exempt Bonds and Coupons, later. State tax forms and instructions ) Obligations issued by individuals before March 2, 1984. State tax forms and instructions Loans of $10,000 or less between individuals who are not in the business of lending money. State tax forms and instructions (The dollar limit includes outstanding prior loans by the lender to the borrower. State tax forms and instructions ) This exception does not apply if a principal purpose of the loan is to avoid any federal tax. State tax forms and instructions   See chapter 1 of Publication 550 for information about the rules for these and other types of discounted debt instruments, such as short-term and market discount obligations. State tax forms and instructions Publication 550 also discusses rules for holders of REMIC interests and CDOs. State tax forms and instructions De minimis rule. State tax forms and instructions   You can treat OID as zero if the total OID on a debt instrument is less than one-fourth of 1% (. State tax forms and instructions 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. State tax forms and instructions Debt instruments with de minimis OID are not listed in this publication. State tax forms and instructions There are special rules to determine the de minimis amount in the case of debt instruments that provide for more than one payment of principal. State tax forms and instructions Also, the de minimis rules generally do not apply to tax-exempt obligations. State tax forms and instructions Example 2. State tax forms and instructions You bought at issuance a 10-year debt instrument with a stated redemption price at maturity of $1,000, issued at $980 with OID of $20. State tax forms and instructions One-fourth of 1% of $1,000 (the stated redemption price) times 10 (the number of full years from the date of original issue to maturity) equals $25. State tax forms and instructions Under the de minimis rule, you can treat the OID as zero because the $20 discount is less than $25. State tax forms and instructions Example 3. State tax forms and instructions Assume the same facts as Example 2, except the debt instrument was issued at $950. State tax forms and instructions You must report part of the $50 OID each year because it is more than $25. State tax forms and instructions Choice to report all interest as OID. State tax forms and instructions   Generally, you can choose to treat all interest on a debt instrument acquired after April 3, 1994, as OID and include it in gross income by using the constant yield method. State tax forms and instructions See Constant yield method under Debt Instruments Issued After 1984, later, for more information. State tax forms and instructions   For this choice, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. State tax forms and instructions For more information, see Regulations section 1. State tax forms and instructions 1272-3. State tax forms and instructions Purchase after date of original issue. State tax forms and instructions   A debt instrument you purchased after the date of original issue may have premium, acquisition premium, or market discount. State tax forms and instructions If so, the OID reported to you on Form 1099-OID may have to be adjusted. State tax forms and instructions For more information, see Showing an OID adjustment under How To Report OID, later. State tax forms and instructions The following rules generally do not apply to contingent payment debt instruments. State tax forms and instructions Adjustment for premium. State tax forms and instructions   If your debt instrument (other than an inflation-indexed debt instrument) has premium, do not report any OID as ordinary income. State tax forms and instructions Your adjustment is the total OID shown on your Form 1099-OID. State tax forms and instructions Adjustment for acquisition premium. State tax forms and instructions   If your debt instrument has acquisition premium, reduce the OID you report. State tax forms and instructions Your adjustment is the difference between the OID shown on your Form 1099-OID and the reduced OID amount figured using the rules explained later under Figuring OID on Long-Term Debt Instruments. State tax forms and instructions Adjustment for market discount. State tax forms and instructions   If your debt instrument has market discount that you choose to include in income currently, increase the OID you report. State tax forms and instructions Your adjustment is the accrued market discount for the year. State tax forms and instructions See Market Discount Bonds in chapter 1 of Publication 550 for information on how to figure accrued market discount and include it in your income currently and for other information about market discount bonds. State tax forms and instructions If you choose to use the constant yield method to figure accrued market discount, also see Figuring OID on Long-Term Debt Instruments, later. State tax forms and instructions The constant yield method of figuring accrued OID, explained in those discussions under Constant yield method, is also used to figure accrued market discount. State tax forms and instructions For more information concerning premium or market discount on an inflation-indexed debt instrument, see Regulations section 1. State tax forms and instructions 1275-7. State tax forms and instructions Sale, exchange, or redemption. State tax forms and instructions   Generally, you treat your gain or loss from the sale, exchange, or redemption of a discounted debt instrument as a capital gain or loss if you held the debt instrument as a capital asset. State tax forms and instructions If you sold the debt instrument through a broker, you should receive Form 1099-B or an equivalent statement from the broker. State tax forms and instructions Use the Form 1099-B or other statement and your brokerage statements to complete Form 8949, and Schedule D (Form 1040). State tax forms and instructions   Your gain or loss is the difference between the amount you realized on the sale, exchange, or redemption and your basis in the debt instrument. State tax forms and instructions Your basis, generally, is your cost increased by the OID you have included in income each year you held it. State tax forms and instructions In general, to determine your gain or loss on a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. State tax forms and instructions   See chapter 4 of Publication 550 for more information about the tax treatment of the sale or redemption of discounted debt instruments. State tax forms and instructions Example 4. State tax forms and instructions Larry, a calendar year taxpayer, bought a corporate debt instrument at original issue for $86,235. State tax forms and instructions 00 on November 1 of Year 1. State tax forms and instructions The 15-year debt instrument matures on October 31 of Year 16 at a stated redemption price of $100,000. State tax forms and instructions The debt instrument provides for semiannual payments of interest at 10%. State tax forms and instructions Assume the debt instrument is a capital asset in Larry's hands. State tax forms and instructions The debt instrument has $13,765. State tax forms and instructions 00 of OID ($100,000 stated redemption price at maturity minus $86,235. State tax forms and instructions 00 issue price). State tax forms and instructions Larry sold the debt instrument for $90,000 on November 1 of Year 4. State tax forms and instructions Including the OID he will report for the period he held the debt instrument in Year 4, Larry has included $4,556. State tax forms and instructions 00 of OID in income and has increased his basis by that amount to $90,791. State tax forms and instructions 00. State tax forms and instructions Larry has realized a loss of $791. State tax forms and instructions 00. State tax forms and instructions All of Larry's loss is capital loss. State tax forms and instructions Form 1099-OID The issuer of the debt instrument (or your broker, if you purchased or held the debt instrument through a broker) should give you a copy of Form 1099-OID or a similar statement if the accrued OID for the calendar year is $10 or more and the term of the debt instrument is more than 1 year. State tax forms and instructions Form 1099-OID shows all OID income in box 1 except OID on a U. State tax forms and instructions S. State tax forms and instructions Treasury obligation, which is shown in box 8. State tax forms and instructions It also shows, in box 2, any qualified stated interest you must include in income. State tax forms and instructions (However, any qualified stated interest on Treasury inflation-protected securities can be reported on Form 1099-INT in box 3. State tax forms and instructions ) A copy of Form 1099-OID will be sent to the IRS. State tax forms and instructions Do not attach your copy to your tax return. State tax forms and instructions Keep it for your records. State tax forms and instructions If you are required to file a tax return and you receive Form 1099-OID showing taxable amounts, you must report these amounts on your return. State tax forms and instructions A 20% accuracy-related penalty may be charged for underpayment of tax due to either negligence or disregard of rules and regulations or substantial understatement of tax. State tax forms and instructions Form 1099-OID not received. State tax forms and instructions   If you held an OID debt instrument for a calendar year but did not receive a Form 1099-OID, refer to the discussions under Figuring OID on Long-Term Debt Instruments, later, for information on the OID you must report. State tax forms and instructions Refiguring OID. State tax forms and instructions   You must refigure the OID shown on Form 1099-OID, in box 1 or box 8, to determine the proper amount to include in income if one of the following applies. State tax forms and instructions You bought the debt instrument at a premium or at an acquisition premium. State tax forms and instructions The debt instrument is a stripped bond or coupon (including zero coupon bonds backed by U. State tax forms and instructions S. State tax forms and instructions Treasury securities). State tax forms and instructions The debt instrument is a contingent payment or inflation-indexed debt instrument. State tax forms and instructions See the discussions under Figuring OID on Long-Term Debt Instruments or Figuring OID on Stripped Bonds and Coupons, later, for the specific computations. State tax forms and instructions Refiguring interest. State tax forms and instructions   If you disposed of a debt instrument or acquired it from another holder between interest dates, see the discussion under Bonds Sold Between Interest Dates in chapter 1 of Publication 550 for information about refiguring the interest shown on Form 1099-OID in box 2. State tax forms and instructions Nominee. State tax forms and instructions   If you are the holder of an OID debt instrument and you receive a Form 1099-OID that shows your taxpayer identification number and includes amounts belonging to another person, you are considered a “nominee. State tax forms and instructions ” You must file another Form 1099-OID for each actual owner, showing the OID for the owner. State tax forms and instructions Show the owner of the debt instrument as the “recipient” and you as the “payer. State tax forms and instructions ”   Complete Form 1099-OID and Form 1096 and file the forms with the Internal Revenue Service Center for your area. State tax forms and instructions You must also give a copy of the Form 1099-OID to the actual owner. State tax forms and instructions However, you are not required to file a nominee return to show amounts belonging to your spouse. State tax forms and instructions See the Form 1099 instructions for more information. State tax forms and instructions   When preparing your tax return, follow the instructions under Showing an OID adjustment in the next discussion. State tax forms and instructions How To Report OID Generally, you report your taxable interest and OID income on the interest line of Form 1040EZ, Form 1040A, or Form 1040. State tax forms and instructions Form 1040 or Form 1040A required. State tax forms and instructions   You must use Form 1040 or Form 1040A (you cannot use Form 1040EZ) under either of the following conditions. State tax forms and instructions You received a Form 1099-OID as a nominee for the actual owner. State tax forms and instructions Your total interest and OID income for the year was more than $1,500. State tax forms and instructions Form 1040 required. State tax forms and instructions   You must use Form 1040 (you cannot use Form 1040A or Form 1040EZ) if you are reporting more or less OID than the amount shown on Form 1099-OID, other than because you are a nominee. State tax forms and instructions For example, if you paid a premium or an acquisition premium when you purchased the debt instrument, you must use Form 1040 because you will report less OID than shown on Form 1099-OID. State tax forms and instructions Also, you must use Form 1040 if you were charged an early withdrawal penalty. State tax forms and instructions Where to report. State tax forms and instructions   List each payer's name (if a brokerage firm gave you a Form 1099, list the brokerage firm as the payer) and the amount received from each payer on Form 1040A, Schedule B, Part I, line 1, or Form 1040, Schedule B, line 1. State tax forms and instructions Include all OID and periodic interest shown on any Form 1099-OID, boxes 1, 2, and 8, you received for the tax year. State tax forms and instructions Also include any other OID and interest income for which you did not receive a Form 1099. State tax forms and instructions Showing an OID adjustment. State tax forms and instructions   If you use Form 1040 to report more or less OID than shown on Form 1099-OID, list the full OID on Schedule B, Part I, line 1, and follow the instructions under 1 or 2, next. State tax forms and instructions   If you use Form 1040A to report the OID shown on a Form 1099-OID you received as a nominee for the actual owner, list the full OID on Schedule B, Part I, line 1 and follow the instructions under 1. State tax forms and instructions If the OID, as adjusted, is less than the amount shown on Form 1099-OID, show the adjustment as follows. State tax forms and instructions Under your last entry on line 1, subtotal all interest and OID income listed on line 1. State tax forms and instructions Below the subtotal, write “Nominee Distribution” or “OID Adjustment” and show the OID you are not required to report. State tax forms and instructions Subtract that OID from the subtotal and enter the result on line 2. State tax forms and instructions If the OID, as adjusted, is more than the amount shown on Form 1099-OID, show the adjustment as follows. State tax forms and instructions Under your last entry on line 1, subtotal all interest and OID income listed on line 1. State tax forms and instructions Below the subtotal, write “OID Adjustment” and show the additional OID. State tax forms and instructions Add that OID to the subtotal and enter the result on line 2. State tax forms and instructions Figuring OID on Long-Term Debt Instruments How you figure the OID on a long-term debt instrument depends on the date it was issued. State tax forms and instructions It also may depend on the type of the debt instrument. State tax forms and instructions There are different rules for each of the following debt instruments. State tax forms and instructions Corporate debt instruments issued after 1954 and before May 28, 1969, and government debt instruments issued after 1954 and before July 2, 1982. State tax forms and instructions Corporate debt instruments issued after May 27, 1969, and before July 2, 1982. State tax forms and instructions Debt instruments issued after July 1, 1982, and before 1985. State tax forms and instructions Debt instruments issued after 1984 (other than debt instruments described in (5) and (6)). State tax forms and instructions Contingent payment debt instruments issued after August 12, 1996. State tax forms and instructions Inflation-indexed debt instruments (including Treasury inflation-protected securities) issued after January 5, 1997. State tax forms and instructions Zero coupon bonds. State tax forms and instructions   The rules for figuring OID on zero coupon bonds backed by U. State tax forms and instructions S. State tax forms and instructions Treasury securities are discussed under Figuring OID on Stripped Bonds and Coupons, later. State tax forms and instructions Corporate Debt Instruments Issued After 1954 and Before May 28, 1969, and Government Debt Instruments Issued After 1954 and Before July 2, 1982 If you hold these debt instruments as capital assets, you include OID in income only in the year the debt instrument is sold, exchanged, or redeemed, and only if you have a gain. State tax forms and instructions The OID, which is taxed as ordinary income, generally equals the following amount. State tax forms and instructions   number of full months you held the debt instrument  number of full months from date of original issue to date of maturity X original issue discount The balance of the gain is capital gain. State tax forms and instructions If there is a loss on the sale of the debt instrument, the entire loss is a capital loss and no OID is reported. State tax forms and instructions Corporate Debt Instruments Issued After May 27, 1969, and Before July 2, 1982 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments. State tax forms and instructions For information about showing the correct OID on your tax return, see the discussion under How To Report OID, earlier. State tax forms and instructions Your basis in the debt instrument is increased by the OID you include in income. State tax forms and instructions Form 1099-OID. State tax forms and instructions   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. State tax forms and instructions However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. State tax forms and instructions See Reduction for acquisition premium, later. State tax forms and instructions If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. State tax forms and instructions irs. State tax forms and instructions gov/pub1212 by clicking the link under Recent Developments. State tax forms and instructions Form 1099-OID not received. State tax forms and instructions    The OID listed is for each $1,000 of redemption price. State tax forms and instructions You must adjust the listed amount if your debt instrument has a different principal amount. State tax forms and instructions For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. State tax forms and instructions   If you held the debt instrument the entire year, use the OID shown in Section I-A for a calendar year. State tax forms and instructions (If your debt instrument is not listed in Section I-A, consult the issuer for information about the issue price and the OID that accrued for that year. State tax forms and instructions ) If you did not hold the debt instrument the entire year, figure your OID using the following method. State tax forms and instructions Divide the OID shown by 12. State tax forms and instructions Multiply the result in (1) by the number of complete and partial months (for example, 6½ months) you held the debt instrument during a calendar year. State tax forms and instructions This is the OID to include in income unless you paid an acquisition premium. State tax forms and instructions The reduction for acquisition premium is discussed next. State tax forms and instructions Reduction for acquisition premium. State tax forms and instructions   If you bought the debt instrument at an acquisition premium, figure the OID to include in income as follows. State tax forms and instructions Divide the total OID on the debt instrument by the number of complete months, and any part of a month, from the date of original issue to the maturity date. State tax forms and instructions This is the monthly OID. State tax forms and instructions Subtract from your cost the issue price and the accumulated OID from the date of issue to the date of purchase. State tax forms and instructions (If the result is zero or less, stop here. State tax forms and instructions You did not pay an acquisition premium. State tax forms and instructions ) Divide the amount figured in (2) by the number of complete months, and any part of a month, from the date of your purchase to the maturity date. State tax forms and instructions Subtract the amount figured in (3) from the amount figured in (1). State tax forms and instructions This is the OID to include in income for each month you hold the debt instrument during the year. State tax forms and instructions Transfers during the month. State tax forms and instructions   If you buy or sell a debt instrument on any day other than the same day of the month as the date of original issue, the ratable monthly portion of OID for the month of sale is divided between the seller and the buyer according to the number of days each held the debt instrument. State tax forms and instructions Your holding period for this purpose begins the day you acquire the debt instrument and ends the day before you dispose of it. State tax forms and instructions Debt Instruments Issued After July 1, 1982, and Before 1985 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments and increase your basis by the amount included. State tax forms and instructions For information about showing the correct OID on your tax return, see How To Report OID, earlier. State tax forms and instructions Form 1099-OID. State tax forms and instructions   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. State tax forms and instructions However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. State tax forms and instructions See Constant yield method and the discussions on acquisition premium that follow, later. State tax forms and instructions If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. State tax forms and instructions irs. State tax forms and instructions gov/pub1212 by clicking the link under Recent Developments. State tax forms and instructions Form 1099-OID not received. State tax forms and instructions    The OID listed is for each $1,000 of redemption price. State tax forms and instructions You must adjust the listed amount if your debt instrument has a different principal amount. State tax forms and instructions For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. State tax forms and instructions   If you held the debt instrument the entire year, use the OID shown in Section I-A. State tax forms and instructions (If your instrument is not listed in Section I-A, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. State tax forms and instructions ) If you did not hold the debt instrument the entire year, figure your OID using either of the following methods. State tax forms and instructions Method 1. State tax forms and instructions    Divide the total OID for a calendar year by 365 (366 for leap years). State tax forms and instructions Multiply the result in (1) by the number of days you held the debt instrument during that particular year. State tax forms and instructions  This computation is an approximation and may result in a slightly higher OID than Method 2. State tax forms and instructions Method 2. State tax forms and instructions    Look up the daily OID for the first accrual period you held the debt instrument during a calendar year. State tax forms and instructions (See Accrual period under Constant yield method, next. State tax forms and instructions ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. State tax forms and instructions If you held the debt instrument for part of both accrual periods, repeat (1) and (2) for the second accrual period. State tax forms and instructions Add the results of (2) and (3). State tax forms and instructions This is the OID to include in income, unless you paid an acquisition premium. State tax forms and instructions (The reduction for acquisition premium is discussed later. State tax forms and instructions ) Constant yield method. State tax forms and instructions   This discussion shows how to figure OID on debt instruments issued after July 1, 1982, and before 1985, using a constant yield method. State tax forms and instructions OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. State tax forms and instructions   Figure the OID allocable to any accrual period as follows. State tax forms and instructions Multiply the adjusted issue price at the beginning of the accrual period by the debt instrument's yield to maturity. State tax forms and instructions Subtract from the result in (1) any qualified stated interest allocable to the accrual period. State tax forms and instructions Accrual period. State tax forms and instructions   An accrual period for any OID debt instrument issued after July 1, 1982, and before 1985 is each 1-year period beginning on the date of the issue of the obligation and each anniversary thereafter, or the shorter period to maturity for the last accrual period. State tax forms and instructions Your tax year will usually include parts of two accrual periods. State tax forms and instructions Daily OID. State tax forms and instructions   The OID for any accrual period is allocated equally to each day in the accrual period. State tax forms and instructions You must include in income the sum of the OID amounts for each day you hold the debt instrument during the year. State tax forms and instructions If your tax year includes parts of two or more accrual periods, you must include the proper daily OID amounts for each accrual period. State tax forms and instructions Figuring daily OID. State tax forms and instructions   The daily OID for the initial accrual period is figured using the following formula. State tax forms and instructions   (ip × ytm) − qsi     p   ip = issue price ytm = yield to maturity qsi = qualified stated interest p = number of days in accrual period         The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. State tax forms and instructions Reduction for acquisition premium on debt instruments purchased before July 19, 1984. State tax forms and instructions   If you bought the debt instrument at an acquisition premium before July 19, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. State tax forms and instructions Figure the daily acquisition premium by dividing the total acquisition premium by the number of days in the period beginning on your purchase date and ending on the day before the date of maturity. State tax forms and instructions Reduction for acquisition premium on debt instruments purchased after July 18, 1984. State tax forms and instructions   If you bought the debt instrument at an acquisition premium after July 18, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. State tax forms and instructions However, the method of figuring the daily acquisition premium is different from the method described in the preceding discussion. State tax forms and instructions To figure the daily acquisition premium under this method, multiply the daily OID by the following fraction. State tax forms and instructions The numerator is the acquisition premium. State tax forms and instructions The denominator is the total OID remaining for the debt instrument after your purchase date. State tax forms and instructions Section I-A is available at www. State tax forms and instructions irs. State tax forms and instructions gov/pub1212 and clicking the link under Recent Developments. State tax forms and instructions Using Section I-A to figure accumulated OID. State tax forms and instructions   If you bought your corporate debt instrument in a calendar year or the subsequent year, you can figure the accumulated OID to the date of purchase by adding the following amounts. State tax forms and instructions The amount from the “Total OID to January 1, YYYY” column for your debt instrument. State tax forms and instructions The OID from January 1 of a calendar year to the date of purchase, figured as follows. State tax forms and instructions Multiply the daily OID for the first accrual period in the calendar year by the number of days from January 1 to the date of purchase, or the end of the accrual period if the debt instrument was purchased in the second or third accrual period. State tax forms and instructions Multiply the daily OID for each subsequent accrual period by the number of days in the period to the date of purchase or the end of the accrual period, whichever applies. State tax forms and instructions Add the amounts figured in (2a) and (2b). State tax forms and instructions Debt Instruments Issued After 1984 If you hold debt instruments issued after 1984, you must report part of the OID in gross income each year that you own the debt instruments. State tax forms and instructions You must include the OID in gross income whether or not you hold the debt instrument as a capital asset. State tax forms and instructions Your basis in the debt instrument is increased by the OID you include in income. State tax forms and instructions For information about showing the correct OID on your tax return, see How To Report OID, earlier. State tax forms and instructions Form 1099-OID. State tax forms and instructions   You should receive a Form 1099-OID showing OID for the part of a calendar year you held the debt instrument. State tax forms and instructions However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. State tax forms and instructions See Constant yield method and Reduction for acquisition premium, later. State tax forms and instructions   You may also need to refigure the OID for a contingent payment or inflation-indexed debt instrument on which the amount reported on Form 1099-OID is inaccurate. State tax forms and instructions See Contingent Payment Debt Instruments or Inflation-Indexed Debt Instruments, later. State tax forms and instructions If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-B available at www. State tax forms and instructions irs. State tax forms and instructions gov/pub1212 by clicking the link under Recent Developments. State tax forms and instructions Form 1099-OID not received. State tax forms and instructions   The OID listed is for each $1,000 of redemption price. State tax forms and instructions You must adjust the listed amount if your debt instrument has a different principal amount. State tax forms and instructions For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. State tax forms and instructions   Use the OID shown in Section I-B for a calendar year if you held the debt instrument the entire year. State tax forms and instructions (If your debt instrument is not listed in Section I-B, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. State tax forms and instructions ) If you did not hold the debt instrument the entire year, figure your OID as follows. State tax forms and instructions Look up the daily OID for the first accrual period in which you held the debt instrument during a calendar year. State tax forms and instructions (See Accrual period under Constant yield method, later. State tax forms and instructions ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. State tax forms and instructions Repeat (1) and (2) for any remaining accrual periods in which you held the debt instrument. State tax forms and instructions Add the results of (2) and (3). State tax forms and instructions This is the OID to include in income for that year, unless you paid an acquisition premium. State tax forms and instructions (The reduction for acquisition premium is discussed later. State tax forms and instructions ) Tax-exempt bond. State tax forms and instructions   If you own a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. State tax forms and instructions You need to make this adjustment to determine if you have a gain or loss on a later disposition of the bond. State tax forms and instructions In general, use the rules that follow to determine your OID. State tax forms and instructions Constant yield method. State tax forms and instructions   This discussion shows how to figure OID on debt instruments issued after 1984 using a constant yield method. State tax forms and instructions (The special rules that apply to contingent payment debt instruments and inflation-indexed debt instruments are explained later. State tax forms and instructions ) OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. State tax forms and instructions   Figure the OID allocable to any accrual period as follows. State tax forms and instructions Multiply the adjusted issue price at the beginning of the accrual period by a fraction. State tax forms and instructions The numerator of the fraction is the debt instrument's yield to maturity and the denominator is the number of accrual periods per year. State tax forms and instructions The yield must be stated appropriately taking into account the length of the particular accrual period. State tax forms and instructions Subtract from the result in (1) any qualified stated interest allocable to the accrual period. State tax forms and instructions Accrual period. State tax forms and instructions   For debt instruments issued after 1984 and before April 4, 1994, an accrual period is each 6-month period that ends on the day that corresponds to the stated maturity date of the debt instrument or the date 6 months before that date. State tax forms and instructions For example, a debt instrument maturing on March 31 has accrual periods that end on September 30 and March 31 of each calendar year. State tax forms and instructions Any short period is included as the first accrual period. State tax forms and instructions   For debt instruments issued after April 3, 1994, accrual periods may be of any length and may vary in length over the term of the debt instrument, as long as each accrual period is no longer than 1 year and all payments are made on the first or last day of an accrual period. State tax forms and instructions However, the OID listed for these debt instruments in Section I-B has been figured using 6-month accrual periods. State tax forms and instructions Daily OID. State tax forms and instructions   The OID for any accrual period is allocated equally to each day in the accrual period. State tax forms and instructions Figure the amount to include in income by adding the OID for each day you hold the debt instrument during the year. State tax forms and instructions Since your tax year will usually include parts of two or more accrual periods, you must include the proper daily OID for each accrual period. State tax forms and instructions If your debt instrument has 6-month accrual periods, your tax year will usually include one full 6-month accrual period and parts of two other 6-month periods. State tax forms and instructions Figuring daily OID. State tax forms and instructions   The daily OID for the initial accrual period is figured using the following formula. State tax forms and instructions   (ip × ytm/n) − qsi     p   ip = issue price ytm = yield to maturity n = number of accrual periods in 1 year qsi = qualified stated interest p = number of days in accrual period       The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. State tax forms and instructions Example 5. State tax forms and instructions On January 1 of Year 1, you bought a 15-year, 10% debt instrument of A Corporation at original issue for $86,235. State tax forms and instructions 17. State tax forms and instructions According to the prospectus, the debt instrument matures on December 31 of Year 15 at a stated redemption price of $100,000. State tax forms and instructions The yield to maturity is 12%, compounded semiannually. State tax forms and instructions The debt instrument provides for qualified stated interest payments of $5,000 on June 30 and December 31 of each calendar year. State tax forms and instructions The accrual periods are the 6-month periods ending on each of these dates. State tax forms and instructions The number of days for the first accrual period (January 1 through June 30) is 181 days (182 for leap years). State tax forms and instructions The daily OID for the first accrual period is figured as follows. State tax forms and instructions   ($86,235. State tax forms and instructions 17 x . State tax forms and instructions 12/2) – $5,000     181 days     = $174. State tax forms and instructions 11020 = $. State tax forms and instructions 96193   181           The adjusted issue price at the beginning of the second accrual period is the issue price plus the OID previously includible in income ($86,235. State tax forms and instructions 17 + $174. State tax forms and instructions 11), or $86,409. State tax forms and instructions 28. State tax forms and instructions The number of days for the second accrual period (July 1 through December 31) is 184 days. State tax forms and instructions The daily OID for the second accrual period is figured as follows. State tax forms and instructions   ($86,409. State tax forms and instructions 28 x . State tax forms and instructions 12/2) – $5,000     184 days     = $184. State tax forms and instructions 55681 = $1. State tax forms and instructions 00303   184 Since the first and second accrual periods coincide exactly with your tax year, you include in income for Year 1 the OID allocable to the first two accrual periods, $174. State tax forms and instructions 11 ($. State tax forms and instructions 95665 × 182 days) plus $184. State tax forms and instructions 56 ($1. State tax forms and instructions 00303 × 184 days), or $358. State tax forms and instructions 67. State tax forms and instructions Add the OID to the $10,000 interest you report on your income tax return for Year 1. State tax forms and instructions Example 6. State tax forms and instructions Assume the same facts as in Example 5, except that you bought the debt instrument at original issue on May 1 of Year 1, with a maturity date of April 30, Year 16. State tax forms and instructions Also, the interest payment dates are October 31 and April 30 of each calendar year. State tax forms and instructions The accrual periods are the 6-month periods ending on each of these dates. State tax forms and instructions The number of days for the first accrual period (May 1 through October 31) is 184 days. State tax forms and instructions The daily OID for the first accrual period is figured as follows. State tax forms and instructions   ($86,235. State tax forms and instructions 17 x . State tax forms and instructions 12/2) – $5,000     184 days     = $174. State tax forms and instructions 11020 = $. State tax forms and instructions 94625   184           The number of days for the second accrual period (November 1 through April 30) is 181 days (182 for leap years). State tax forms and instructions The daily OID for the second accrual period is figured as follows. State tax forms and instructions   ($86,409. State tax forms and instructions 28 x . State tax forms and instructions 12/2) – $5,000     181 days     = $184. State tax forms and instructions 55681 = $1. State tax forms and instructions 01965   181 If you hold the debt instrument through the end of Year 1, you must include $236. State tax forms and instructions 31 of OID in income. State tax forms and instructions This is $174. State tax forms and instructions 11 ($. State tax forms and instructions 94625 × 184 days) for the period May 1 through October 31 plus $62. State tax forms and instructions 20 ($1. State tax forms and instructions 01965 × 61 days) for the period November 1 through December 31. State tax forms and instructions The OID is added to the $5,000 interest income paid on October 31 of Year 1. State tax forms and instructions Your basis in the debt instrument is increased by the OID you include in income. State tax forms and instructions On January 1 of Year 2, your basis in the A Corporation debt instrument is $86,471. State tax forms and instructions 48 ($86,235. State tax forms and instructions 17 + $236. State tax forms and instructions 31). State tax forms and instructions Short first accrual period. State tax forms and instructions   You may have to make adjustments if a debt instrument has a short first accrual period. State tax forms and instructions For example, a debt instrument with 6-month accrual periods that is issued on February 15 and matures on October 31 has a short first accrual period that ends April 30. State tax forms and instructions (The remaining accrual periods begin on May 1 and November 1. State tax forms and instructions ) For this short period, figure the daily OID as described earlier, but adjust the yield for the length of the short accrual period. State tax forms and instructions You may use any reasonable compounding method in determining OID for a short period. State tax forms and instructions Examples of reasonable compounding methods include continuous compounding and monthly compounding (that is, simple interest within a month). State tax forms and instructions Consult your tax advisor for more information about making this computation. State tax forms and instructions   The OID for the final accrual period is the difference between the amount payable at maturity (other than a payment of qualified stated interest) and the adjusted issue price at the beginning of the final accrual period. State tax forms and instructions Reduction for acquisition premium. State tax forms and instructions   If you bought the debt instrument at an acquisition premium, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. State tax forms and instructions To figure the daily acquisition premium, multiply the daily OID by the following fraction. State tax forms and instructions The numerator is the acquisition premium. State tax forms and instructions The denominator is the total OID remaining for the debt instrument after your purchase date. State tax forms and instructions Example 7. State tax forms and instructions Assume the same facts as in Example 6, except that you bought the debt instrument on November 1 of Year 1 for $87,000, after its original issue on May 1 of Year 1. State tax forms and instructions The adjusted issue price on November 1 of Year 1 is $86,409. State tax forms and instructions 28 ($86,235. State tax forms and instructions 17 + $174. State tax forms and instructions 11). State tax forms and instructions In this case, you paid an acquisition premium of $590. State tax forms and instructions 72 ($87,000 − $86,409. State tax forms and instructions 28). State tax forms and instructions The daily OID for the accrual period November 1 through April 30, reduced for the acquisition premium, is figured as follows. State tax forms and instructions 1) Daily OID on date of purchase (2nd accrual period) $1. State tax forms and instructions 01965*  2)  Acquisition premium $590. State tax forms and instructions 72    3)  Total OID remaining after purchase date ($13,764. State tax forms and instructions 83 − $174. State tax forms and instructions 11) 13,590. State tax forms and instructions 72   4) Line 2 ÷ line 3 . State tax forms and instructions 04346  5)  Line 1 × line 4 . State tax forms and instructions 04432  6)  Daily OID reduced for the acquisition premium. State tax forms and instructions Line 1 − line 5 $0. State tax forms and instructions 97533  * As shown in Example 6. State tax forms and instructions The total OID to include in income for Year 1 is $59. State tax forms and instructions 50 ($. State tax forms and instructions 97533 × 61 days). State tax forms and instructions Contingent Payment Debt Instruments This discussion shows how to figure OID on a contingent payment debt instrument issued after August 12, 1996, that was issued for cash or publicly traded property. State tax forms and instructions In general, a contingent payment debt instrument provides for one or more payments that are contingent as to timing or amount. State tax forms and instructions If you hold a contingent payment bond, you must report OID as it accrues each year. State tax forms and instructions Because the actual payments on a contingent payment debt instrument cannot be known in advance, issuers and holders cannot use the constant yield method (discussed earlier under Debt Instruments Issued After 1984) without making certain assumptions about the payments on the debt instrument. State tax forms and instructions To figure OID accruals on contingent payment debt instruments, holders and issuers must use the noncontingent bond method. State tax forms and instructions Noncontingent bond method. State tax forms and instructions    Under this method, the issuer must compute a comparable yield for the debt instrument and, based on this yield, construct a projected payment schedule for the instrument, which includes a projected fixed amount for each contingent payment. State tax forms and instructions In general, holders and issuers accrue OID on this projected payment schedule using the constant yield method that applies to fixed payment debt instruments. State tax forms and instructions When a contingent payment differs from the projected fixed amount, the holders and issuers make adjustments to their OID accruals. State tax forms and instructions If the actual contingent payment is larger than expected, both the issuer and the holder increase their OID accruals. State tax forms and instructions If the actual contingent payment is smaller than expected, holders and issuers generally decrease their OID accruals. State tax forms and instructions Form 1099-OID. State tax forms and instructions   The amount shown on Form 1099-OID in box 1 you receive for a contingent payment debt instrument may not be the correct amount to include in income. State tax forms and instructions For example, the amount may not be correct if the contingent payment was different from the projected amount. State tax forms and instructions If the amount in box 1 is not correct, you must figure the OID to report on your return under the following rules. State tax forms and instructions For information on showing an OID adjustment on your tax return, see How To Report OID, earlier. State tax forms and instructions Figuring OID. State tax forms and instructions   To figure OID on a contingent payment debt instrument, you need to know the “comparable yield” and “projected payment schedule” of the debt instrument. State tax forms and instructions The issuer must make these available to you. State tax forms and instructions Comparable yield. State tax forms and instructions   The comparable yield generally is the yield at which the issuer would issue a fixed rate debt instrument with terms and conditions similar to those of the contingent payment debt instrument. State tax forms and instructions The comparable yield is determined as of the debt instrument's issue date. State tax forms and instructions Projected payment schedule. State tax forms and instructions   The projected payment schedule for a contingent payment debt instrument includes all fixed payments due under the instrument and a projected fixed amount for each contingent payment. State tax forms and instructions The projected payment schedule is created by the issuer as of the debt instrument's issue date. State tax forms and instructions It is used to determine the issuer's and holder's interest accruals and adjustments. State tax forms and instructions Steps for figuring OID. State tax forms and instructions   Figure the OID on a contingent payment debt instrument in two steps. State tax forms and instructions Figure the OID using the constant yield method (discussed earlier under Debt Instruments Issued After 1984 ) that applies to fixed payment debt instruments. State tax forms and instructions Use the comparable yield as the yield to maturity. State tax forms and instructions In general, use the projected payment schedule to determine the instrument's adjusted issue price at the beginning of each accrual period (other than the initial period). State tax forms and instructions Do not treat any amount payable as qualified stated interest. State tax forms and instructions Adjust the OID in (1) to account for actual contingent payments. State tax forms and instructions If the contingent payment is greater than the projected fixed amount, you have a positive adjustment. State tax forms and instructions If the contingent payment is less than the projected fixed amount, you have a negative adjustment. State tax forms and instructions Net positive adjustment. State tax forms and instructions   A net positive adjustment exists for a tax year when the total of any positive adjustments described in (2) above for the tax year is more than the total of any negative adjustments for the tax year. State tax forms and instructions Treat a net positive adjustment as additional OID for the tax year. State tax forms and instructions Net negative adjustment. State tax forms and instructions   A net negative adjustment exists for a tax year when the total of any negative adjustments described in (2) above for the tax year is more than the total of any positive adjustments for the tax year. State tax forms and instructions Use a net negative adjustment to offset OID on the debt instrument for the tax year. State tax forms and instructions If the net negative adjustment is more than the OID on the debt instrument for the tax year, you can claim the difference as an ordinary loss. State tax forms and instructions However, the amount you can claim as an ordinary loss is limited to the OID on the debt instrument you included in income in prior tax years. State tax forms and instructions You must carry forward any net negative adjustment that is more than the total OID for the tax year and prior tax years and treat it as a negative adjustment in the next tax year. State tax forms and instructions Basis adjustments. State tax forms and instructions   In general, increase your basis in a contingent payment debt instrument by the OID included in income. State tax forms and instructions Your basis, however, is not affected by any negative or positive adjustments. State tax forms and instructions Decrease your basis by any noncontingent payment received and the projected contingent payment scheduled to be received. State tax forms and instructions Treatment of gain or loss on sale or exchange. State tax forms and instructions   If you sell a contingent payment debt instrument at a gain, your gain is ordinary income (interest income), even if you hold the debt instrument as a capital asset. State tax forms and instructions If you sell a contingent payment debt instrument at a loss, your loss is an ordinary loss to the extent of your prior OID accruals on the debt instrument. State tax forms and instructions If the debt instrument is a capital asset, treat any loss that is more than your prior OID accruals as a capital loss. State tax forms and instructions See Regulations section 1. State tax forms and instructions 1275-4 for exceptions to these rules. State tax forms and instructions Premium, acquisition premium, and market discount. State tax forms and instructions   The rules for accruing premium, acquisition premium, and market discount do not apply to a contingent payment debt instrument. State tax forms and instructions See Regulations section 1. State tax forms and instructions 1275-4 to determine how to account for these items. State tax forms and instructions Inflation-Indexed Debt Instruments This discussion shows how you figure OID on certain inflation-indexed debt instruments issued after January 5, 1997. State tax forms and instructions An inflation-indexed debt instrument is generally a debt instrument on which the payments are adjusted for inflation and d