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Tax Return For Students

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Tax Return For Students

Tax return for students 1. Tax return for students   Travel Table of Contents Traveling Away From HomeTax Home Tax Home Different From Family Home Temporary Assignment or Job What Travel Expenses Are Deductible?Employee. Tax return for students Business associate. Tax return for students Bona fide business purpose. Tax return for students Meals Travel in the United States Travel Outside the United States Luxury Water Travel Conventions If you temporarily travel away from your tax home, you can use this chapter to determine if you have deductible travel expenses. Tax return for students This chapter discusses: Traveling away from home, Temporary assignment or job, and What travel expenses are deductible. Tax return for students It also discusses the standard meal allowance, rules for travel inside and outside the United States, luxury water travel, and deductible convention expenses. Tax return for students Travel expenses defined. Tax return for students   For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Tax return for students   An ordinary expense is one that is common and accepted in your trade or business. Tax return for students A necessary expense is one that is helpful and appropriate for your business. Tax return for students An expense does not have to be required to be considered necessary. Tax return for students   You will find examples of deductible travel expenses in Table 1-1 , later. Tax return for students Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. Tax return for students This rest requirement is not satisfied by merely napping in your car. Tax return for students You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. Tax return for students Example 1. Tax return for students You are a railroad conductor. Tax return for students You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. Tax return for students During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. Tax return for students You are considered to be away from home. Tax return for students Example 2. Tax return for students You are a truck driver. Tax return for students You leave your terminal and return to it later the same day. Tax return for students You get an hour off at your turnaround point to eat. Tax return for students Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. Tax return for students Members of the Armed Forces. Tax return for students   If you are a member of the U. Tax return for students S. Tax return for students Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. Tax return for students You cannot deduct your expenses for meals and lodging. Tax return for students You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. Tax return for students If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. Tax return for students   A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home (explained next) aboard the ship for travel expense purposes. Tax return for students Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. Tax return for students Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. Tax return for students It includes the entire city or general area in which your business or work is located. Tax return for students If you have more than one regular place of business, your tax home is your main place of business. Tax return for students See Main place of business or work , later. Tax return for students If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. Tax return for students See No main place of business or work , later. Tax return for students If you do not have a regular or main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. Tax return for students As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. Tax return for students Main place of business or work. Tax return for students   If you have more than one place of work, consider the following when determining which one is your main place of business or work. Tax return for students The total time you ordinarily spend in each place. Tax return for students The level of your business activity in each place. Tax return for students Whether your income from each place is significant or insignificant. Tax return for students Example. Tax return for students You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. Tax return for students You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. Tax return for students Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. Tax return for students No main place of business or work. Tax return for students   You may have a tax home even if you do not have a regular or main place of work. Tax return for students Your tax home may be the home where you regularly live. Tax return for students Factors used to determine tax home. Tax return for students   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. Tax return for students You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. Tax return for students You have living expenses at your main home that you duplicate because your business requires you to be away from that home. Tax return for students You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. Tax return for students   If you satisfy all three factors, your tax home is the home where you regularly live. Tax return for students If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. Tax return for students If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. Tax return for students Example 1. Tax return for students You are single and live in Boston in an apartment you rent. Tax return for students You have worked for your employer in Boston for a number of years. Tax return for students Your employer enrolls you in a 12-month executive training program. Tax return for students You do not expect to return to work in Boston after you complete your training. Tax return for students During your training, you do not do any work in Boston. Tax return for students Instead, you receive classroom and on-the-job training throughout the United States. Tax return for students You keep your apartment in Boston and return to it frequently. Tax return for students You use your apartment to conduct your personal business. Tax return for students You also keep up your community contacts in Boston. Tax return for students When you complete your training, you are transferred to Los Angeles. Tax return for students You do not satisfy factor (1) because you did not work in Boston. Tax return for students You satisfy factor (2) because you had duplicate living expenses. Tax return for students You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. Tax return for students Therefore, you have a tax home in Boston. Tax return for students Example 2. Tax return for students You are an outside salesperson with a sales territory covering several states. Tax return for students Your employer's main office is in Newark, but you do not conduct any business there. Tax return for students Your work assignments are temporary, and you have no way of knowing where your future assignments will be located. Tax return for students You have a room in your married sister's house in Dayton. Tax return for students You stay there for one or two weekends a year, but you do no work in the area. Tax return for students You do not pay your sister for the use of the room. Tax return for students You do not satisfy any of the three factors listed earlier. Tax return for students You are an itinerant and have no tax home. Tax return for students Tax Home Different From Family Home If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. Tax return for students You also cannot deduct the cost of meals and lodging while at your tax home. Tax return for students See Example 1 , later. Tax return for students If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. Tax return for students See Example 2 , later. Tax return for students Example 1. Tax return for students You are a truck driver and you and your family live in Tucson. Tax return for students You are employed by a trucking firm that has its terminal in Phoenix. Tax return for students At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. Tax return for students You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. Tax return for students This is because Phoenix is your tax home. Tax return for students Example 2. Tax return for students Your family home is in Pittsburgh, where you work 12 weeks a year. Tax return for students The rest of the year you work for the same employer in Baltimore. Tax return for students In Baltimore, you eat in restaurants and sleep in a rooming house. Tax return for students Your salary is the same whether you are in Pittsburgh or Baltimore. Tax return for students Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. Tax return for students You cannot deduct any expenses you have for meals and lodging there. Tax return for students However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. Tax return for students You can deduct the cost of your round trip between Baltimore and Pittsburgh. Tax return for students You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. Tax return for students Temporary Assignment or Job You may regularly work at your tax home and also work at another location. Tax return for students It may not be practical to return to your tax home from this other location at the end of each work day. Tax return for students Temporary assignment vs. Tax return for students indefinite assignment. Tax return for students   If your assignment or job away from your main place of work is temporary, your tax home does not change. Tax return for students You are considered to be away from home for the whole period you are away from your main place of work. Tax return for students You can deduct your travel expenses if they otherwise qualify for deduction. Tax return for students Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. Tax return for students    However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. Tax return for students An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. Tax return for students   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. Tax return for students You may be able to deduct the cost of relocating to your new tax home as a moving expense. Tax return for students See Publication 521 for more information. Tax return for students Exception for federal crime investigations or prosecutions. Tax return for students   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. Tax return for students This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year provided you meet the other requirements for deductibility. Tax return for students   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Tax return for students Determining temporary or indefinite. Tax return for students   You must determine whether your assignment is temporary or indefinite when you start work. Tax return for students If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. Tax return for students An assignment or job that is initially temporary may become indefinite due to changed circumstances. Tax return for students A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. Tax return for students   The following examples illustrate whether an assignment or job is temporary or indefinite. Tax return for students Example 1. Tax return for students You are a construction worker. Tax return for students You live and regularly work in Los Angeles. Tax return for students You are a member of a trade union in Los Angeles that helps you get work in the Los Angeles area. Tax return for students Your tax home is Los Angeles. Tax return for students Because of a shortage of work, you took a job on a construction project in Fresno. Tax return for students Your job was scheduled to end in 8 months. Tax return for students The job actually lasted 10 months. Tax return for students You realistically expected the job in Fresno to last 8 months. Tax return for students The job actually did last less than 1 year. Tax return for students The job is temporary and your tax home is still in Los Angeles. Tax return for students Example 2. Tax return for students The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 18 months. Tax return for students The job actually was completed in 10 months. Tax return for students Your job in Fresno is indefinite because you realistically expected the work to last longer than 1 year, even though it actually lasted less than 1 year. Tax return for students You cannot deduct any travel expenses you had in Fresno because Fresno became your tax home. Tax return for students Example 3. Tax return for students The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 9 months. Tax return for students After 8 months, however, you were asked to remain for 7 more months (for a total actual stay of 15 months). Tax return for students Initially, you realistically expected the job in Fresno to last for only 9 months. Tax return for students However, due to changed circumstances occurring after 8 months, it was no longer realistic for you to expect that the job in Fresno would last for 1 year or less. Tax return for students You can only deduct your travel expenses for the first 8 months. Tax return for students You cannot deduct any travel expenses you had after that time because Fresno became your tax home when the job became indefinite. Tax return for students Going home on days off. Tax return for students   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. Tax return for students You cannot deduct the cost of your meals and lodging there. Tax return for students However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. Tax return for students You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. Tax return for students   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. Tax return for students In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. Tax return for students Probationary work period. Tax return for students   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. Tax return for students You cannot deduct any of your expenses for meals and lodging during the probationary period. Tax return for students What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. Tax return for students You can deduct ordinary and necessary expenses you have when you travel away from home on business. Tax return for students The type of expense you can deduct depends on the facts and your circumstances. Tax return for students Table 1-1 summarizes travel expenses you may be able to deduct. Tax return for students You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. Tax return for students When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. Tax return for students You can use a log, diary, notebook, or any other written record to keep track of your expenses. Tax return for students The types of expenses you need to record, along with supporting documentation, are described in Table 5-1 (see chapter 5). Tax return for students Separating costs. Tax return for students   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. Tax return for students You must have a reasonable basis for making this allocation. Tax return for students For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. Tax return for students Travel expenses for another individual. Tax return for students    If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. Tax return for students Employee. Tax return for students   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. Tax return for students Business associate. Tax return for students   If a business associate travels with you and meets the conditions in (2) and (3), earlier, you can deduct the travel expenses you have for that person. Tax return for students A business associate is someone with whom you could reasonably expect to actively conduct business. Tax return for students A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. Tax return for students Bona fide business purpose. Tax return for students   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. Tax return for students Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. Tax return for students Table 1-1. Tax return for students Travel Expenses You Can Deduct   This chart summarizes expenses you can deduct when you travel away from home for business purposes. Tax return for students IF you have expenses for. Tax return for students . Tax return for students . Tax return for students THEN you can deduct the cost of. Tax return for students . Tax return for students . Tax return for students transportation travel by airplane, train, bus, or car between your home and your business destination. Tax return for students If you were provided with a free ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. Tax return for students If you travel by ship, see Luxury Water Travel and Cruise Ships (under Conventions) for additional rules and limits. Tax return for students taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. Tax return for students baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. Tax return for students car operating and maintaining your car when traveling away from home on business. Tax return for students You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking. Tax return for students If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. Tax return for students lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Tax return for students Meals include amounts spent for food, beverages, taxes, and related tips. Tax return for students See Meals for additional rules and limits. Tax return for students cleaning dry cleaning and laundry. Tax return for students telephone business calls while on your business trip. Tax return for students This includes business communication by fax machine or other communication devices. Tax return for students tips tips you pay for any expenses in this chart. Tax return for students other other similar ordinary and necessary expenses related to your business travel. Tax return for students These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. Tax return for students Example. Tax return for students Jerry drives to Chicago on business and takes his wife, Linda, with him. Tax return for students Linda is not Jerry's employee. Tax return for students Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. Tax return for students The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. Tax return for students Her expenses are not deductible. Tax return for students Jerry pays $199 a day for a double room. Tax return for students A single room costs $149 a day. Tax return for students He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. Tax return for students If he uses public transportation, he can deduct only his fare. Tax return for students Meals You can deduct the cost of meals in either of the following situations. Tax return for students It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. Tax return for students The meal is business-related entertainment. Tax return for students Business-related entertainment is discussed in chapter 2 . Tax return for students The following discussion deals only with meals that are not business-related entertainment. Tax return for students Lavish or extravagant. Tax return for students   You cannot deduct expenses for meals that are lavish or extravagant. Tax return for students An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Tax return for students Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. Tax return for students 50% limit on meals. Tax return for students   You can figure your meals expense using either of the following methods. Tax return for students Actual cost. Tax return for students The standard meal allowance. Tax return for students Both of these methods are explained below. Tax return for students But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. Tax return for students   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. Tax return for students If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. Tax return for students Chapter 2 discusses the 50% Limit in more detail, and chapter 6 discusses accountable and nonaccountable plans. Tax return for students Actual Cost You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. Tax return for students If you use this method, you must keep records of your actual cost. Tax return for students Standard Meal Allowance Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. Tax return for students It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. Tax return for students The set amount varies depending on where and when you travel. Tax return for students In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . Tax return for students If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. Tax return for students See the recordkeeping rules for travel in chapter 5 . Tax return for students Incidental expenses. Tax return for students   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Tax return for students   Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. Tax return for students Incidental-expenses-only method. Tax return for students   You can use an optional method (instead of actual cost) for deducting incidental expenses only. Tax return for students The amount of the deduction is $5 a day. Tax return for students You can use this method only if you did not pay or incur any meal expenses. Tax return for students You cannot use this method on any day that you use the standard meal allowance. Tax return for students This method is subject to the proration rules for partial days. Tax return for students See Travel for days you depart and return , later in this chapter. Tax return for students Note. Tax return for students The incidental-expenses-only method is not subject to the 50% limit discussed below. Tax return for students Federal employees should refer to the Federal Travel Regulations at www. Tax return for students gsa. Tax return for students gov. Tax return for students Find the “Most Requested Links” on the upper left and click on “Regulations: FAR, FMR, FTR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. Tax return for students 50% limit may apply. Tax return for students   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. Tax return for students If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. Tax return for students The 50% limit is discussed in more detail in chapter 2, and accountable and nonaccountable plans are discussed in chapter 6. Tax return for students There is no optional standard lodging amount similar to the standard meal allowance. Tax return for students Your allowable lodging expense deduction is your actual cost. Tax return for students Who can use the standard meal allowance. Tax return for students   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. Tax return for students Use of the standard meal allowance for other travel. Tax return for students   You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. Tax return for students You can also use it to figure your meal expenses when you travel for qualifying educational purposes. Tax return for students You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. Tax return for students Amount of standard meal allowance. Tax return for students   The standard meal allowance is the federal M&IE rate. Tax return for students For travel in 2013, the rate for most small localities in the United States is $46 a day. Tax return for students    Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. Tax return for students    You can find this information (organized by state) on the Internet at www. Tax return for students gsa. Tax return for students gov/perdiem. Tax return for students Enter a zip code or select a city and state for the per diem rates for the current fiscal year. Tax return for students Per diem rates for prior fiscal years are available by using the drop down menu under “Search by State. Tax return for students ”   Per diem rates are listed by the Federal government's fiscal year which runs from October 1 to September 30. Tax return for students You can choose to use the rates from the 2013 fiscal year per diem tables or the rates from the 2014 fiscal year tables, but you must consistently use the same tables for all travel you are reporting on your income tax return for the year. Tax return for students   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. Tax return for students If you work in the transportation industry, however, see Special rate for transportation workers , later. Tax return for students Standard meal allowance for areas outside the continental United States. Tax return for students   The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. Tax return for students The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. Tax return for students S. Tax return for students Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. Tax return for students The Department of State establishes per diem rates for all other foreign areas. Tax return for students    You can access per diem rates for non-foreign areas outside the continental United States at: www. Tax return for students defensetravel. Tax return for students dod. Tax return for students mil/site/perdiemCalc. Tax return for students cfm. Tax return for students You can access all other foreign per diem rates at: www. Tax return for students state. Tax return for students gov/travel/. Tax return for students Click on “Travel Per Diem Allowances for Foreign Areas,” under “Foreign Per Diem Rates” to obtain the latest foreign per diem rates. Tax return for students Special rate for transportation workers. Tax return for students   You can use a special standard meal allowance if you work in the transportation industry. Tax return for students You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. Tax return for students If this applies to you, you can claim a standard meal allowance of $59 a day ($65 for travel outside the continental United States). Tax return for students   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. Tax return for students If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. Tax return for students Travel for days you depart and return. Tax return for students   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). Tax return for students You can do so by one of two methods. Tax return for students Method 1: You can claim 3/4 of the standard meal allowance. Tax return for students Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. Tax return for students Example. Tax return for students Jen is employed in New Orleans as a convention planner. Tax return for students In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. Tax return for students She left her home in New Orleans at 10 a. Tax return for students m. Tax return for students on Wednesday and arrived in Washington, DC, at 5:30 p. Tax return for students m. Tax return for students After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. Tax return for students m. Tax return for students Jen's employer gave her a flat amount to cover her expenses and included it with her wages. Tax return for students Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. Tax return for students Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. Tax return for students For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. Tax return for students Travel in the United States The following discussion applies to travel in the United States. Tax return for students For this purpose, the United States includes the 50 states and the District of Columbia. Tax return for students The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. Tax return for students See Part of Trip Outside the United States , later. Tax return for students Trip Primarily for Business You can deduct all of your travel expenses if your trip was entirely business related. Tax return for students If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct only your business-related travel expenses. Tax return for students These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. Tax return for students Example. Tax return for students You work in Atlanta and take a business trip to New Orleans in May. Tax return for students Your business travel totals 850 miles round trip. Tax return for students On your way, you stop in Mobile to visit your parents. Tax return for students You spend $2,120 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. Tax return for students If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,820. Tax return for students You can deduct $1,820 for your trip, including the cost of round-trip transportation to and from New Orleans. Tax return for students The deduction for your meals is subject to the 50% limit on meals mentioned earlier. Tax return for students Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. Tax return for students However, you can deduct any expenses you have while at your destination that are directly related to your business. Tax return for students A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. Tax return for students The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. Tax return for students Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later in this chapter under Travel Outside the United States for that part of the trip. Tax return for students For the part of your trip that is inside the United States, use the rules for travel in the United States. Tax return for students Travel outside the United States does not include travel from one point in the United States to another point in the United States. Tax return for students The following discussion can help you determine whether your trip was entirely within the United States. Tax return for students Public transportation. Tax return for students   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. Tax return for students Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . Tax return for students Example. Tax return for students You fly from New York to Puerto Rico with a scheduled stop in Miami. Tax return for students You return to New York nonstop. Tax return for students The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. Tax return for students Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. Tax return for students Private car. Tax return for students   Travel by private car in the United States is travel between points in the United States, even though you are on your way to a destination outside the United States. Tax return for students Example. Tax return for students You travel by car from Denver to Mexico City and return. Tax return for students Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. Tax return for students The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. Tax return for students Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. Tax return for students For this purpose, the United States includes the 50 states and the District of Columbia. Tax return for students How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. Tax return for students Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. Tax return for students Travel entirely for business. Tax return for students   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. Tax return for students Travel considered entirely for business. Tax return for students   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. Tax return for students Exception 1 - No substantial control. Tax return for students   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. Tax return for students The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. Tax return for students   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, and Are not related to your employer, or Are not a managing executive. Tax return for students    “Related to your employer” is defined later in chapter 6 under Per Diem and Car Allowances . Tax return for students   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. Tax return for students   A self-employed person generally has substantial control over arranging business trips. Tax return for students Exception 2 - Outside United States no more than a week. Tax return for students   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. Tax return for students One week means 7 consecutive days. Tax return for students In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. Tax return for students Example. Tax return for students You traveled to Brussels primarily for business. Tax return for students You left Denver on Tuesday and flew to New York. Tax return for students On Wednesday, you flew from New York to Brussels, arriving the next morning. Tax return for students On Thursday and Friday, you had business discussions, and from Saturday until Tuesday, you were sightseeing. Tax return for students You flew back to New York, arriving Wednesday afternoon. Tax return for students On Thursday, you flew back to Denver. Tax return for students Although you were away from your home in Denver for more than a week, you were not outside the United States for more than a week. Tax return for students This is because the day you depart does not count as a day outside the United States. Tax return for students You can deduct your cost of the round-trip flight between Denver and Brussels. Tax return for students You can also deduct the cost of your stay in Brussels for Thursday and Friday while you conducted business. Tax return for students However, you cannot deduct the cost of your stay in Brussels from Saturday through Tuesday because those days were spent on nonbusiness activities. Tax return for students Exception 3 - Less than 25% of time on personal activities. Tax return for students   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. Tax return for students For this purpose, count both the day your trip began and the day it ended. Tax return for students Example. Tax return for students You flew from Seattle to Tokyo, where you spent 14 days on business and 5 days on personal matters. Tax return for students You then flew back to Seattle. Tax return for students You spent 1 day flying in each direction. Tax return for students Because only 5/21 (less than 25%) of your total time abroad was for nonbusiness activities, you can deduct as travel expenses what it would have cost you to make the trip if you had not engaged in any nonbusiness activity. Tax return for students The amount you can deduct is the cost of the round-trip plane fare and 16 days of meals (subject to the 50% limit), lodging, and other related expenses. Tax return for students Exception 4 - Vacation not a major consideration. Tax return for students   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. Tax return for students Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on other activities, you generally cannot deduct all of your travel expenses. Tax return for students You can only deduct the business portion of your cost of getting to and from your destination. Tax return for students You must allocate the costs between your business and other activities to determine your deductible amount. Tax return for students See Travel allocation rules , later. Tax return for students You do not have to allocate your travel expenses if you meet one of the four exceptions listed earlier under Travel considered entirely for business . Tax return for students In those cases, you can deduct the total cost of getting to and from your destination. Tax return for students Travel allocation rules. Tax return for students   If your trip outside the United States was primarily for business, you must allocate your travel time on a day-to-day basis between business days and nonbusiness days. Tax return for students The days you depart from and return to the United States are both counted as days outside the United States. Tax return for students   To figure the deductible amount of your round-trip travel expenses, use the following fraction. Tax return for students The numerator (top number) is the total number of business days outside the United States. Tax return for students The denominator (bottom number) is the total number of business and nonbusiness days of travel. Tax return for students Counting business days. Tax return for students   Your business days include transportation days, days your presence was required, days you spent on business, and certain weekends and holidays. Tax return for students Transportation day. Tax return for students   Count as a business day any day you spend traveling to or from a business destination. Tax return for students However, if because of a nonbusiness activity you do not travel by a direct route, your business days are the days it would take you to travel a reasonably direct route to your business destination. Tax return for students Extra days for side trips or nonbusiness activities cannot be counted as business days. Tax return for students Presence required. Tax return for students   Count as a business day any day your presence is required at a particular place for a specific business purpose. Tax return for students Count it as a business day even if you spend most of the day on nonbusiness activities. Tax return for students Day spent on business. Tax return for students   If your principal activity during working hours is the pursuit of your trade or business, count the day as a business day. Tax return for students Also, count as a business day any day you are prevented from working because of circumstances beyond your control. Tax return for students Certain weekends and holidays. Tax return for students   Count weekends, holidays, and other necessary standby days as business days if they fall between business days. Tax return for students But if they follow your business meetings or activity and you remain at your business destination for nonbusiness or personal reasons, do not count them as business days. Tax return for students Example 1. Tax return for students Your tax home is New York City. Tax return for students You travel to Quebec, where you have a business appointment on Friday. Tax return for students You have another appointment on the following Monday. Tax return for students Because your presence was required on both Friday and Monday, they are business days. Tax return for students Because the weekend is between business days, Saturday and Sunday are counted as business days. Tax return for students This is true even though you use the weekend for sightseeing, visiting friends, or other nonbusiness activity. Tax return for students Example 2. Tax return for students If, in Example 1, you had no business in Quebec after Friday, but stayed until Monday before starting home, Saturday and Sunday would be nonbusiness days. Tax return for students Nonbusiness activity on the way to or from your business destination. Tax return for students   If you stopped for a vacation or other nonbusiness activity either on the way from the United States to your business destination, or on the way back to the United States from your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Tax return for students   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your nonbusiness destination and a return to the point where travel outside the United States ends. Tax return for students   You determine the nonbusiness portion of that expense by multiplying it by a fraction. Tax return for students The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Tax return for students Example. Tax return for students You live in New York. Tax return for students On May 4 you flew to Paris to attend a business conference that began on May 5. Tax return for students The conference ended at noon on May 14. Tax return for students That evening you flew to Dublin where you visited with friends until the afternoon of May 21, when you flew directly home to New York. Tax return for students The primary purpose for the trip was to attend the conference. Tax return for students If you had not stopped in Dublin, you would have arrived home the evening of May 14. Tax return for students You do not meet any of the exceptions that would allow you to consider your travel entirely for business. Tax return for students May 4 through May 14 (11 days) are business days and May 15 through May 21 (7 days) are nonbusiness days. Tax return for students You can deduct the cost of your meals (subject to the 50% limit), lodging, and other business-related travel expenses while in Paris. Tax return for students You cannot deduct your expenses while in Dublin. Tax return for students You also cannot deduct 7/18 of what it would have cost you to travel round-trip between New York and Dublin. Tax return for students You paid $750 to fly from New York to Paris, $400 to fly from Paris to Dublin, and $700 to fly from Dublin back to New York. Tax return for students Round-trip airfare from New York to Dublin would have been $1,250. Tax return for students You figure the deductible part of your air travel expenses by subtracting 7/18 of the round-trip fare and other expenses you would have had in traveling directly between New York and Dublin ($1,250 × 7/18 = $486) from your total expenses in traveling from New York to Paris to Dublin and back to New York ($750 + $400 + $700 = $1,850). Tax return for students Your deductible air travel expense is $1,364 ($1,850 − $486). Tax return for students Nonbusiness activity at, near, or beyond business destination. Tax return for students   If you had a vacation or other nonbusiness activity at, near, or beyond your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Tax return for students   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your business destination and a return to the point where travel outside the United States ends. Tax return for students   You determine the nonbusiness portion of that expense by multiplying it by a fraction. Tax return for students The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Tax return for students   None of your travel expenses for nonbusiness activities at, near, or beyond your business destination are deductible. Tax return for students Example. Tax return for students Assume that the dates are the same as in the previous example but that instead of going to Dublin for your vacation, you fly to Venice, Italy, for a vacation. Tax return for students You cannot deduct any part of the cost of your trip from Paris to Venice and return to Paris. Tax return for students In addition, you cannot deduct 7/18 of the airfare and other expenses from New York to Paris and back to New York. Tax return for students You can deduct 11/18 of the round-trip plane fare and other travel expenses from New York to Paris, plus your meals (subject to the 50% limit), lodging, and any other business expenses you had in Paris. Tax return for students (Assume these expenses total $4,939. Tax return for students ) If the round-trip plane fare and other travel-related expenses (such as food during the trip) are $1,750, you can deduct travel costs of $1,069 (11/18 × $1,750), plus the full $4,939 for the expenses you had in Paris. Tax return for students Other methods. Tax return for students   You can use another method of counting business days if you establish that it more clearly reflects the time spent on other than business activities outside the United States. Tax return for students Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. Tax return for students However, if you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. Tax return for students Example. Tax return for students The university from which you graduated has a continuing education program for members of its alumni association. Tax return for students This program consists of trips to various foreign countries where academic exercises and conferences are set up to acquaint individuals in most occupations with selected facilities in several regions of the world. Tax return for students However, none of the conferences are directed toward specific occupations or professions. Tax return for students It is up to each participant to seek out specialists and organizational settings appropriate to his or her occupational interests. Tax return for students Three-hour sessions are held each day over a 5-day period at each of the selected overseas facilities where participants can meet with individual practitioners. Tax return for students These sessions are composed of a variety of activities including workshops, mini-lectures, role playing, skill development, and exercises. Tax return for students Professional conference directors schedule and conduct the sessions. Tax return for students Participants can choose those sessions they wish to attend. Tax return for students You can participate in this program since you are a member of the alumni association. Tax return for students You and your family take one of the trips. Tax return for students You spend about 2 hours at each of the planned sessions. Tax return for students The rest of the time you go touring and sightseeing with your family. Tax return for students The trip lasts less than 1 week. Tax return for students Your travel expenses for the trip are not deductible since the trip was primarily a vacation. Tax return for students However, registration fees and any other incidental expenses you have for the five planned sessions you attended that are directly related and beneficial to your business are deductible business expenses. Tax return for students These expenses should be specifically stated in your records to ensure proper allocation of your deductible business expenses. Tax return for students Luxury Water Travel If you travel by ocean liner, cruise ship, or other form of luxury water transportation for business purposes, there is a daily limit on the amount you can deduct. Tax return for students The limit is twice the highest federal per diem rate allowable at the time of your travel. Tax return for students (Generally, the federal per diem is the amount paid to federal government employees for daily living expenses when they travel away from home, but in the United States, for business purposes. Tax return for students ) Daily limit on luxury water travel. Tax return for students   The highest federal per diem rate allowed and the daily limit for luxury water travel in 2013 is shown in the following table. Tax return for students   2013 Dates Highest Federal Per Diem Daily Limit on Luxury Water Travel   Jan. Tax return for students 1 – Mar. Tax return for students 31 $367 $734   Apr. Tax return for students 1 – June 30 312 624   July 1 – Aug. Tax return for students 31 310 620   Sept. Tax return for students 1 – Sept. Tax return for students 30 366 732   Oct. Tax return for students 1 – Dec. Tax return for students 31 374 748 Example. Tax return for students Caroline, a travel agent, traveled by ocean liner from New York to London, England, on business in May. Tax return for students Her expense for the 6-day cruise was $5,200. Tax return for students Caroline's deduction for the cruise cannot exceed $3,744 (6 days × $624 daily limit). Tax return for students Meals and entertainment. Tax return for students   If your expenses for luxury water travel include separately stated amounts for meals or entertainment, those amounts are subject to the 50% limit on meals and entertainment before you apply the daily limit. Tax return for students For a discussion of the 50% Limit , see chapter 2. Tax return for students Example. Tax return for students In the previous example, Caroline's luxury water travel had a total cost of $5,200. Tax return for students Of that amount, $3,700 was separately stated as meals and entertainment. Tax return for students Caroline, who is self-employed, is not reimbursed for any of her travel expenses. Tax return for students Caroline figures her deductible travel expenses as follows. Tax return for students Meals and entertainment $3,700   50% limit × . Tax return for students 50   Allowable meals &     entertainment $1,850   Other travel expenses + 1,800   Allowable cost before the daily limit $3,650 Daily limit for May 2013 $624   Times number of days × 6   Maximum luxury water travel     deduction $3,744 Amount of allowable deduction $3,650 Caroline's deduction for her cruise is limited to $3,650, even though the limit on luxury water travel is slightly higher. Tax return for students Not separately stated. Tax return for students   If your meal or entertainment charges are not separately stated or are not clearly identifiable, you do not have to allocate any portion of the total charge to meals or entertainment. Tax return for students Exceptions The daily limit on luxury water travel (discussed earlier) does not apply to expenses you have to attend a convention, seminar, or meeting on board a cruise ship. Tax return for students See Cruise Ships under Conventions. Tax return for students Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. Tax return for students You cannot deduct the travel expenses for your family. Tax return for students If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. Tax return for students Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. Tax return for students You can deduct your travel expenses only if your attendance is connected to your own trade or business. Tax return for students Convention agenda. Tax return for students   The convention agenda or program generally shows the purpose of the convention. Tax return for students You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. Tax return for students The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. Tax return for students Conventions Held Outside the North American Area You cannot deduct expenses for attending a convention, seminar, or similar meeting held outside the North American area unless: The meeting is directly related to your trade or business, and It is reasonable to hold the meeting outside the North American area. Tax return for students See Reasonableness test , later. Tax return for students If the meeting meets these requirements, you also must satisfy the rules for deducting expenses for business trips in general, discussed earlier under Travel Outside the United States . Tax return for students North American area. Tax return for students   The North American area includes the following locations. Tax return for students American Samoa Johnston Island Antigua and Barbuda Kingman Reef Aruba Marshall Islands Bahamas Mexico Baker Island Micronesia Barbados Midway Islands Bermuda Netherlands Antilles Canada Northern Mariana Costa Rica Islands Dominica Palau Dominican Republic Palmyra Atoll Grenada Panama Guam Puerto Rico Guyana Trinidad and Tobago Honduras USA Howland Island U. Tax return for students S. Tax return for students Virgin Islands Jamaica Wake Island Jarvis Island   The North American area also includes U. Tax return for students S. Tax return for students islands, cays, and reefs that are possessions of the United States and not part of the fifty states or the District of Columbia. Tax return for students Reasonableness test. Tax return for students   The following factors are taken into account to determine if it was reasonable to hold the meeting outside the North American area. Tax return for students The purpose of the meeting and the activities taking place at the meeting. Tax return for students The purposes and activities of the sponsoring organizations or groups. Tax return for students The homes of the active members of the sponsoring organizations and the places at which other meetings of the sponsoring organizations or groups have been or will be held. Tax return for students Other relevant factors you may present. Tax return for students Cruise Ships You can deduct up to $2,000 per year of your expenses of attending conventions, seminars, or similar meetings held on cruise ships. Tax return for students All ships that sail are considered cruise ships. Tax return for students You can deduct these expenses only if all of the following requirements are met. Tax return for students The convention, seminar, or meeting is directly related to your trade or business. Tax return for students The cruise ship is a vessel registered in the United States. Tax return for students All of the cruise ship's ports of call are in the United States or in possessions of the United States. Tax return for students You attach to your return a written statement signed by you that includes information about: The total days of the trip (not including the days of transportation to and from the cruise ship port), The number of hours each day that you devoted to scheduled business activities, and A program of the scheduled business activities of the meeting. Tax return for students You attach to your return a written statement signed by an officer of the organization or group sponsoring the meeting that includes: A schedule of the business activities of each day of the meeting, and The number of hours you attended the scheduled business activities. Tax return for students Prev  Up  Next   Home   More Online Publications
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The Tax Return For Students

Tax return for students Publication 596 - Main Content Table of Contents Chapter 1—Rules for EveryoneRule 1—Adjusted Gross Income (AGI) Limits Rule 2—You Must Have a Valid Social Security Number (SSN) Rule 3—Your Filing Status Cannot Be Married Filing Separately Rule 4—You Must Be a U. Tax return for students S. Tax return for students Citizen or Resident Alien All Year Rule 5—You Cannot File Form 2555 or Form 2555-EZ Rule 6—Your Investment Income Must Be $3,300 or Less Rule 7—You Must Have Earned Income Chapter 2—Rules If You Have a Qualifying ChildRule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9—Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer Chapter 3—Rules If You Do Not Have a Qualifying ChildRule 11—You Must Be at Least Age 25 but Under Age 65 Rule 12—You Cannot Be the Dependent of Another Person Rule 13—You Cannot Be a Qualifying Child of Another Taxpayer Rule 14—You Must Have Lived in the United States More Than Half of the Year Chapter 4—Figuring and Claiming the EICRule 15—Earned Income Limits IRS Will Figure the EIC for You How To Figure the EIC Yourself Schedule EIC Chapter 5—Disallowance of the EICForm 8862 Are You Prohibited From Claiming the EIC for a Period of Years? Chapter 6—Detailed ExamplesExample 1—Sharon Rose Example 2—Cynthia and Jerry Grey Chapter 1—Rules for Everyone This chapter discusses Rules 1 through 7. Tax return for students You must meet all seven rules to qualify for the earned income credit. Tax return for students If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the publication. Tax return for students If you meet all seven rules in this chapter, then read either chapter 2 or chapter 3 (whichever applies) for more rules you must meet. Tax return for students Rule 1—Adjusted Gross Income (AGI) Limits Your adjusted gross income (AGI) must be less than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Tax return for students Adjusted gross income (AGI). Tax return for students   AGI is the amount on line 4 of Form 1040EZ, line 22 of Form 1040A, or line 38 of Form 1040. Tax return for students   If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. Tax return for students You do not need to read the rest of this publication. Tax return for students Example—AGI is more than limit. Tax return for students Your AGI is $38,550, you are single, and you have one qualifying child. Tax return for students You cannot claim the EIC because your AGI is not less than $37,870. Tax return for students However, if your filing status was married filing jointly, you might be able to claim the EIC because your AGI is less than $43,210. Tax return for students Community property. Tax return for students   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3), and live in a state that has community property laws, your AGI includes that portion of both your and your spouse's wages that you are required to include in gross income. Tax return for students This is different from the community property rules that apply under Rule 7. Tax return for students Rule 2—You Must Have a Valid Social Security Number (SSN) To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). Tax return for students Any qualifying child listed on Schedule EIC also must have a valid SSN. Tax return for students (See Rule 8 if you have a qualifying child. Tax return for students ) If your social security card (or your spouse's, if filing a joint return) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. Tax return for students An example of a federally funded benefit is Medicaid. Tax return for students If you have a card with the legend “Not valid for employment” and your immigration status has changed so that you are now a U. Tax return for students S. Tax return for students citizen or permanent resident, ask the SSA for a new social security card without the legend. Tax return for students If you get the new card after you have already filed your return, you can file an amended return on Form 1040X, Amended U. Tax return for students S. Tax return for students Individual Income Tax Return, to claim the EIC. Tax return for students U. Tax return for students S. Tax return for students citizen. Tax return for students   If you were a U. Tax return for students S. Tax return for students citizen when you received your SSN, you have a valid SSN. Tax return for students Valid for work only with INS authorization or DHS authorization. Tax return for students   If your social security card reads “Valid for work only with INS authorization” or “Valid for work only with DHS authorization,” you have a valid SSN, but only if that authorization is still valid. Tax return for students SSN missing or incorrect. Tax return for students   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. Tax return for students Other taxpayer identification number. Tax return for students   You cannot get the EIC if, instead of an SSN, you (or your spouse, if filing a joint return) have an individual taxpayer identification number (ITIN). Tax return for students ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. Tax return for students No SSN. Tax return for students   If you do not have a valid SSN, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Tax return for students You cannot claim the EIC. Tax return for students Getting an SSN. Tax return for students   If you (or your spouse, if filing a joint return) do not have an SSN, you can apply for one by filing Form SS-5 with the SSA. Tax return for students You can get Form SS-5 online at www. Tax return for students socialsecurity. Tax return for students gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. Tax return for students Filing deadline approaching and still no SSN. Tax return for students   If the filing deadline is approaching and you still do not have an SSN, you have two choices. Tax return for students Request an automatic 6-month extension of time to file your return. Tax return for students You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Tax return for students S. Tax return for students Individual Income Tax Return. Tax return for students For more information, see the instructions for Form 4868. Tax return for students File the return on time without claiming the EIC. Tax return for students After receiving the SSN, file an amended return, Form 1040X, claiming the EIC. Tax return for students Attach a filled-in Schedule EIC, Earned Income Credit, if you have a qualifying child. Tax return for students Rule 3—Your Filing Status Cannot Be “Married Filing Separately” If you are married, you usually must file a joint return to claim the EIC. Tax return for students Your filing status cannot be “Married filing separately. Tax return for students ” Spouse did not live with you. Tax return for students   If you are married and your spouse did not live in your home at any time during the last 6 months of the year, you may be able to file as head of household, instead of married filing separately. Tax return for students In that case, you may be able to claim the EIC. Tax return for students For detailed information about filing as head of household, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Tax return for students Rule 4—You Must Be a U. Tax return for students S. Tax return for students Citizen or Resident Alien All Year If you (or your spouse, if married) were a nonresident alien for any part of the year, you cannot claim the earned income credit unless your filing status is married filing jointly. Tax return for students You can use that filing status only if one spouse is a U. Tax return for students S. Tax return for students citizen or resident alien and you choose to treat the nonresident spouse as a U. Tax return for students S. Tax return for students resident. Tax return for students If you make this choice, you and your spouse are taxed on your worldwide income. Tax return for students If you need more information on making this choice, get Publication 519, U. Tax return for students S. Tax return for students Tax Guide for Aliens. Tax return for students If you (or your spouse, if married) were a nonresident alien for any part of the year and your filing status is not married filing jointly, enter “No” on the dotted line next to line 64a (Form 1040) or in the space to the left of line 38a (Form 1040A). Tax return for students Rule 5—You Cannot File Form 2555 or Form 2555-EZ You cannot claim the earned income credit if you file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. Tax return for students You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. Tax return for students U. Tax return for students S. Tax return for students possessions are not foreign countries. Tax return for students See Publication 54, Tax Guide for U. Tax return for students S. Tax return for students Citizens and Resident Aliens Abroad, for more detailed information. Tax return for students Rule 6—Your Investment Income Must Be $3,300 or Less You cannot claim the earned income credit unless your investment income is $3,300 or less. Tax return for students If your investment income is more than $3,300, you cannot claim the credit. Tax return for students Form 1040EZ. Tax return for students   If you file Form 1040EZ, your investment income is the total of the amount on line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. Tax return for students Form 1040A. Tax return for students   If you file Form 1040A, your investment income is the total of the amounts on lines 8a (taxable interest), 8b (tax-exempt interest), 9a (ordinary dividends), and 10 (capital gain distributions) on that form. Tax return for students Form 1040. Tax return for students   If you file Form 1040, use Worksheet 1 in this chapter to figure your investment income. Tax return for students    Worksheet 1. Tax return for students Investment Income If You Are Filing Form 1040 Use this worksheet to figure investment income for the earned income credit when you file Form 1040. Tax return for students Interest and Dividends         1. Tax return for students Enter any amount from Form 1040, line 8a 1. Tax return for students   2. Tax return for students Enter any amount from Form 1040, line 8b, plus any amount on Form 8814, line 1b 2. Tax return for students   3. Tax return for students Enter any amount from Form 1040, line 9a 3. Tax return for students   4. Tax return for students Enter the amount from Form 1040, line 21, that is from Form 8814 if you are filing that form to report your child's interest and dividend income on your return. Tax return for students (If your child received an Alaska Permanent Fund dividend, use Worksheet 2 in this chapter to figure the amount to enter on this line. Tax return for students ) 4. Tax return for students   Capital Gain Net Income         5. Tax return for students Enter the amount from Form 1040, line 13. Tax return for students If the amount on that line is a loss, enter -0- 5. Tax return for students       6. Tax return for students Enter any gain from Form 4797, Sales of Business Property, line 7. Tax return for students If the amount on that line is a loss, enter -0-. Tax return for students (But, if you completed lines 8 and 9 of Form 4797, enter the amount from line 9 instead. Tax return for students ) 6. Tax return for students       7. Tax return for students Substract line 6 of this worksheet from line 5 of this worksheet. Tax return for students (If the result is less than zero, enter -0-. Tax return for students ) 7. Tax return for students   Royalties and Rental Income From Personal Property         8. Tax return for students Enter any royalty income from Schedule E, line 23b, plus any income from the rental of personal property shown on Form 1040, line 21 8. Tax return for students       9. Tax return for students Enter any expenses from Schedule E, line 20, related to royalty income, plus any expenses from the rental of personal property deducted on Form 1040, line 36 9. Tax return for students       10. Tax return for students Subtract the amount on line 9 of this worksheet from the amount on line 8. Tax return for students (If the result is less than zero, enter -0-. Tax return for students ) 10. Tax return for students   Passive Activities         11. Tax return for students Enter the total of any net income from passive activities (such as income included on Schedule E, line 26, 29a (col. Tax return for students (g)), 34a (col. Tax return for students (d)), or 40). Tax return for students (See instructions below for lines 11 and 12. Tax return for students ) 11. Tax return for students       12. Tax return for students Enter the total of any losses from passive activities (such as losses included on Schedule E, line 26, 29b (col. Tax return for students (f)), 34b (col. Tax return for students (c)), or 40). Tax return for students (See instructions below for lines 11 and 12. Tax return for students ) 12. Tax return for students       13. Tax return for students Combine the amounts on lines 11 and 12 of this worksheet. Tax return for students (If the result is less than zero, enter -0-. Tax return for students ) 13. Tax return for students   14. Tax return for students Add the amounts on lines 1, 2, 3, 4, 7, 10, and 13. Tax return for students Enter the total. Tax return for students This is your investment income 14. Tax return for students   15. Tax return for students Is the amount on line 14 more than $3,300? ❑ Yes. Tax return for students You cannot take the credit. Tax return for students  ❑ No. Tax return for students Go to Step 3 of the Form 1040 instructions for lines 64a and 64b to find out if you can take the credit (unless you are using this publication to find out if you can take the credit; in that case, go to Rule 7, next). Tax return for students       Instructions for lines 11 and 12. Tax return for students In figuring the amount to enter on lines 11 and 12, do not take into account any royalty income (or loss) included on line 26 of Schedule E or any amount included in your earned income. Tax return for students To find out if the income on line 26 or line 40 of Schedule E is from a passive activity, see the Schedule E instructions. Tax return for students If any of the rental real estate income (or loss) included on Schedule E, line 26, is not from a passive activity, print “NPA” and the amount of that income (or loss) on the dotted line next to line 26. Tax return for students Worksheet 2. Tax return for students Worksheet for Line 4 of Worksheet 1 Complete this worksheet only if Form 8814 includes an Alaska Permanent Fund dividend. Tax return for students Note. Tax return for students Fill out a separate Worksheet 2 for each Form 8814. Tax return for students     1. Tax return for students Enter the amount from Form 8814, line 2a 1. Tax return for students   2. Tax return for students Enter the amount from Form 8814, line 2b 2. Tax return for students   3. Tax return for students Subtract line 2 from line 1 3. Tax return for students   4. Tax return for students Enter the amount from Form 8814, line 1a 4. Tax return for students   5. Tax return for students Add lines 3 and 4 5. Tax return for students   6. Tax return for students Enter the amount of the child's Alaska Permanent Fund dividend 6. Tax return for students   7. Tax return for students Divide line 6 by line 5. Tax return for students Enter the result as a decimal (rounded to at least three places) 7. Tax return for students   8. Tax return for students Enter the amount from Form 8814, line 12 8. Tax return for students   9. Tax return for students Multiply line 7 by line 8 9. Tax return for students   10. Tax return for students Subtract line 9 from line 8. Tax return for students Enter the result on line 4 of Worksheet 1 10. Tax return for students     (If filing more than one Form 8814, enter on line 4 of Worksheet 1 the total of the amounts on line 10 of all Worksheets 2. Tax return for students )     Example—completing Worksheet 2. Tax return for students Your 10-year-old child has taxable interest income of $400, an Alaska Permanent Fund dividend of $1,000, and ordinary dividends of $1,100, of which $500 are qualified dividends. Tax return for students You choose to report this income on your return. Tax return for students You enter $400 on line 1a of Form 8814, $2,100 ($1,000 + $1,100) on line 2a, and $500 on line 2b. Tax return for students After completing lines 4 through 11, you enter $400 on line 12 of Form 8814 and line 21 of Form 1040. Tax return for students On Worksheet 2, you enter $2,100 on line 1, $500 on line 2, $1,600 on line 3, $400 on line 4, $2,000 on line 5, $1,000 on line 6, 0. Tax return for students 500 on line 7, $400 on line 8, $200 on line 9, and $200 on line 10. Tax return for students You then enter $200 on line 4 of Worksheet 1. Tax return for students Rule 7—You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. Tax return for students If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. Tax return for students If you are an employee, earned income includes all the taxable income you get from your employer. Tax return for students Rule 15 has information that will help you figure the amount of your earned income. Tax return for students If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the Form 1040 instructions. Tax return for students Earned Income Earned income includes all of the following types of income. Tax return for students Wages, salaries, tips, and other taxable employee pay. Tax return for students Employee pay is earned income only if it is taxable. Tax return for students Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Tax return for students But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained later in this chapter. Tax return for students Net earnings from self-employment. Tax return for students Gross income received as a statutory employee. Tax return for students Wages, salaries, and tips. Tax return for students    Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. Tax return for students You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). Tax return for students Nontaxable combat pay election. Tax return for students   You can elect to include your nontaxable combat pay in earned income for the earned income credit. Tax return for students The amount of your nontaxable combat pay should be shown on your Form W-2, in box 12, with code Q. Tax return for students Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. Tax return for students For details, see Nontaxable combat pay in chapter 4. Tax return for students Net earnings from self-employment. Tax return for students   You may have net earnings from self-employment if: You own your own business, or You are a minister or member of a religious order. Tax return for students Minister's housing. Tax return for students   The rental value of a home or a housing allowance provided to a minister as part of the minister's pay generally is not subject to income tax but is included in net earnings from self-employment. Tax return for students For that reason, it is included in earned income for the EIC (except in the cases described in Approved Form 4361 or Form 4029 , below). Tax return for students Statutory employee. Tax return for students   You are a statutory employee if you receive a Form W-2 on which the “Statutory employee” box (box 13) is checked. Tax return for students You report your income and expenses as a statutory employee on Schedule C or C-EZ (Form 1040). Tax return for students Strike benefits. Tax return for students   Strike benefits paid by a union to its members are earned income. Tax return for students Approved Form 4361 or Form 4029 This section is for persons who have an approved: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, or Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. Tax return for students Each approved form exempts certain income from social security taxes. Tax return for students Each form is discussed here in terms of what is or is not earned income for the EIC. Tax return for students Form 4361. Tax return for students   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. Tax return for students This includes wages, salaries, tips, and other taxable employee compensation. Tax return for students A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. Tax return for students Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. Tax return for students Examples include fees for performing marriages and honoraria for delivering speeches. Tax return for students Form 4029. Tax return for students   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. Tax return for students However, amounts you received as a self-employed individual do not count as earned income. Tax return for students Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. Tax return for students Disability Benefits If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Tax return for students Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. Tax return for students You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. Tax return for students Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Tax return for students Report taxable pension payments on Form 1040, lines 16a and 16b, or Form 1040A, lines 12a and 12b. Tax return for students Disability insurance payments. Tax return for students   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. Tax return for students It does not matter whether you have reached minimum retirement age. Tax return for students If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. Tax return for students ” Income That Is Not Earned Income Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. Tax return for students Do not include any of these items in your earned income. Tax return for students Earnings while an inmate. Tax return for students   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. Tax return for students This includes amounts for work performed while in a work release program or while in a halfway house. Tax return for students Workfare payments. Tax return for students   Nontaxable workfare payments are not earned income for the EIC. Tax return for students These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if sufficient private sector employment is not available, or (2) community service program activities. Tax return for students Community property. Tax return for students   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under those laws. Tax return for students That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. Tax return for students Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. Tax return for students Nevada, Washington, and California domestic partners. Tax return for students   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. Tax return for students Your earned income for the EIC does not include any amount earned by your partner. Tax return for students Your earned income includes the entire amount you earned. Tax return for students For details, see Publication 555. Tax return for students Conservation Reserve Program (CRP) payments. Tax return for students   If you were receiving social security retirement benefits or social security disability benefits at the time you received any CRP payments, your CRP payments are not earned income for the EIC. Tax return for students Nontaxable military pay. Tax return for students   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. Tax return for students Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). Tax return for students See Publication 3, Armed Forces' Tax Guide, for more information. Tax return for students    Combat pay. Tax return for students You can elect to include your nontaxable combat pay in earned income for the EIC. Tax return for students See Nontaxable combat pay in chapter 4. Tax return for students Chapter 2—Rules If You Have a Qualifying Child If you have met all the rules in chapter 1, use this chapter to see if you have a qualifying child. Tax return for students This chapter discusses Rules 8 through 10. Tax return for students You must meet all three of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned income credit with a qualifying child. Tax return for students You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. Tax return for students (You cannot file Form 1040EZ. Tax return for students ) You also must complete Schedule EIC and attach it to your return. Tax return for students If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find out what to do next. Tax return for students No qualifying child. Tax return for students   If you do not meet Rule 8, you do not have a qualifying child. Tax return for students Read chapter 3 to find out if you can get the earned income credit without a qualifying child. Tax return for students Rule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. Tax return for students The fours tests are: Relationship, Age, Residency, and Joint return. Tax return for students The four tests are illustrated in Figure 1. Tax return for students The paragraphs that follow contain more information about each test. Tax return for students Relationship Test To be your qualifying child, a child must be your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), or Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew). Tax return for students The following definitions clarify the relationship test. Tax return for students Adopted child. Tax return for students   An adopted child is always treated as your own child. Tax return for students The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Tax return for students Foster child. Tax return for students   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Tax return for students (An authorized placement agency includes a state or local government agency. Tax return for students It also includes a tax-exempt organization licensed by a state. Tax return for students In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. Tax return for students ) Example. Tax return for students Debbie, who is 12 years old, was placed in your care 2 years ago by an authorized agency responsible for placing children in foster homes. Tax return for students Debbie is your foster child. Tax return for students Figure 1. Tax return for students Tests for Qualifying Child Please click here for the text description of the image. Tax return for students Conditions for Qualifying Child Age Test Your child must be: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a student, and younger than you (or your spouse, if filing jointly, or Permanently and totally disabled at any time during 2013, regardless of age. Tax return for students The following examples and definitions clarify the age test. Tax return for students Example 1—child not under age 19. Tax return for students Your son turned 19 on December 10. Tax return for students Unless he was permanently and totally disabled or a student, he is not a qualifying child because, at the end of the year, he was not under age 19. Tax return for students Example 2—child not younger than you or your spouse. Tax return for students Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. Tax return for students He is not disabled. Tax return for students Both you and your spouse are 21 years old, and you file a joint return. Tax return for students Your brother is not your qualifying child because he is not younger than you or your spouse. Tax return for students Example 3—child younger than your spouse but not younger than you. Tax return for students The facts are the same as in Example 2 except that your spouse is 25 years old. Tax return for students Because your brother is younger than your spouse, he is your qualifying child, even though he is not younger than you. Tax return for students Student defined. Tax return for students   To qualify as a student, your child must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regular student body at the school, or A student taking a full-time, on-farm training course given by a school described in (1), or a state, county, or local government. Tax return for students   The 5 calendar months need not be consecutive. Tax return for students   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. Tax return for students School defined. Tax return for students   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Tax return for students However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. Tax return for students Vocational high school students. Tax return for students   Students who work in co-op jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. Tax return for students Permanently and totally disabled. Tax return for students   Your child is permanently and totally disabled if both of the following apply. Tax return for students He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Tax return for students A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Tax return for students Residency Test Your child must have lived with you in the United States for more than half of 2013. Tax return for students The following definitions clarify the residency test. Tax return for students United States. Tax return for students   This means the 50 states and the District of Columbia. Tax return for students It does not include Puerto Rico or U. Tax return for students S. Tax return for students possessions such as Guam. Tax return for students Homeless shelter. Tax return for students   Your home can be any location where you regularly live. Tax return for students You do not need a traditional home. Tax return for students For example, if your child lived with you for more than half the year in one or more homeless shelters, your child meets the residency test. Tax return for students Military personnel stationed outside the United States. Tax return for students   U. Tax return for students S. Tax return for students military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. Tax return for students Extended active duty. Tax return for students   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Tax return for students Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. Tax return for students Birth or death of child. Tax return for students    child who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the child's home for more than half the time he or she was alive in 2013. Tax return for students Temporary absences. Tax return for students   Count time that you or your child is away from home on a temporary absence due to a special circumstance as time the child lived with you. Tax return for students Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. Tax return for students Kidnapped child. Tax return for students   A kidnapped child is treated as living with you for more than half of the year if the child lived with you for more than half the part of the year before the date of the kidnapping. Tax return for students The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family. Tax return for students This treatment applies for all years until the child is returned. Tax return for students However, the last year this treatment can apply is the earlier of: The year there is a determination that the child is dead, or The year the child would have reached age 18. Tax return for students   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. Tax return for students Joint Return Test To meet this test, the child cannot file a joint return for the year. Tax return for students Exception. Tax return for students   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. Tax return for students Example 1—child files joint return. Tax return for students You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Tax return for students He earned $25,000 for the year. Tax return for students The couple files a joint return. Tax return for students Because your daughter and her husband file a joint return, she is not your qualifying child. Tax return for students Example 2—child files joint return to get refund of tax withheld. Tax return for students Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Tax return for students They do not have a child. Tax return for students Neither is required to file a tax return. Tax return for students Taxes were taken out of their pay, so they file a joint return only to get a refund of the withheld taxes. Tax return for students The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Tax return for students Example 3—child files joint return to claim American opportunity credit. Tax return for students The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Tax return for students He and his wife are not required to file a tax return, but they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Tax return for students Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to claim a refund of income tax withheld or estimated tax paid. Tax return for students The exception to the joint return test does not apply, so your son is not your qualifying child. Tax return for students Married child. Tax return for students   Even if your child does not file a joint return, if your child was married at the end of the year, he or she cannot be your qualifying child unless: You can claim an exemption for the child, or The reason you cannot claim an exemption for the child is that you let the child's other parent claim the exemption under the Special rule for divorced or separated parents (or parents who live apart) described later. Tax return for students    Social security number. Tax return for students Your qualifying child must have a valid social security number (SSN), unless the child was born and died in 2013 and you attach to your return a copy of the child's birth certificate, death certificate, or hospital records showing a live birth. Tax return for students You cannot claim the EIC on the basis of a qualifying child if: The qualifying child's SSN is missing from your tax return or is incorrect, The qualifying child's social security card says “Not valid for employment” and was issued for use in getting a federally funded benefit, or Instead of an SSN, the qualifying child has: An individual taxpayer identification number (ITIN), which is issued to a noncitizen who cannot get an SSN, or An adoption taxpayer identification number (ATIN), issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. Tax return for students   If you have more than one qualifying child and only one has a valid SSN, you can use only that child to claim the EIC. Tax return for students For more information about SSNs, see Rule 2. Tax return for students Rule 9—Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC Sometimes a child meets the tests to be a qualifying child of more than one person. Tax return for students However, only one of these persons can actually treat the child as a qualifying child. Tax return for students Only that person can use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). Tax return for students The exemption for the child. Tax return for students The child tax credit. Tax return for students Head of household filing status. Tax return for students The credit for child and dependent care expenses. Tax return for students The exclusion for dependent care benefits. Tax return for students The EIC. Tax return for students The other person cannot take any of these benefits based on this qualifying child. Tax return for students In other words, you and the other person cannot agree to divide these tax benefits between you. Tax return for students The other person cannot take any of these tax benefits unless he or she has a different qualifying child. Tax return for students The tiebreaker rules, which follow, explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. Tax return for students However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. Tax return for students Tiebreaker rules. Tax return for students   To determine which person can treat the child as a qualifying child to claim the six tax benefits just listed, the following tiebreaker rules apply. Tax return for students If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Tax return for students If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. Tax return for students If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. Tax return for students If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. Tax return for students If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. Tax return for students If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. Tax return for students If the child's parents file a joint return with each other, this rule can be applied by treating the parents' total AGI as divided evenly between them. Tax return for students See Example 8. Tax return for students   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. Tax return for students See Examples 1 through 13. Tax return for students   If you cannot claim the EIC because your qualifying child is treated under the tiebreaker rules as the qualifying child of another person for 2013, you may be able to take the EIC using a different qualifying child, but you cannot take the EIC using the rules in chapter 3 for people who do not have a qualifying child. Tax return for students If the other person cannot claim the EIC. Tax return for students   If you and someone else have the same qualifying child but the other person cannot claim the EIC because he or she is not eligible or his or her earned income or AGI is too high, you may be able to treat the child as a qualifying child. Tax return for students See Examples 6 and 7. Tax return for students But you cannot treat the child as a qualifying child to claim the EIC if the other person uses the child to claim any of the other six tax benefits listed earlier in this chapter. Tax return for students Examples. Tax return for students    The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. Tax return for students Example 1—child lived with parent and grandparent. Tax return for students You and your 2-year-old son Jimmy lived with your mother all year. Tax return for students You are 25 years old, unmarried, and your AGI is $9,000. Tax return for students Your only income was $9,000 from a part-time job. Tax return for students Your mother's only income was $20,000 from her job, and her AGI is $20,000. Tax return for students Jimmy's father did not live with you or Jimmy. Tax return for students The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. Tax return for students Jimmy is a qualifying child of both you and your mother because he meets the relationship, age, residency, and joint return tests for both you and your mother. Tax return for students However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier in this chapter for which that person qualifies). Tax return for students He is not a qualifying child of anyone else, including his father. Tax return for students If you do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can treat him as a qualifying child to claim the EIC (and any of the other tax benefits listed earlier for which she qualifies). Tax return for students Example 2—parent has higher AGI than grandparent. Tax return for students The facts are the same as in Example 1 except your AGI is $25,000. Tax return for students Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. Tax return for students Only you can claim him. Tax return for students Example 3—two persons claim same child. Tax return for students The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. Tax return for students In this case, you as the child's parent will be the only one allowed to claim Jimmy as a qualifying child for the EIC and the other tax benefits listed earlier for which you qualify. Tax return for students The IRS will disallow your mother's claim to the EIC and any of the other tax benefits listed earlier unless she has another qualifying child. Tax return for students Example 4—qualifying children split between two persons. Tax return for students The facts are the same as in Example 1 except that you also have two other young children who are qualifying children of both you and your mother. Tax return for students Only one of you can claim each child. Tax return for students However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Tax return for students For example, if you claim one child, your mother can claim the other two. Tax return for students Example 5—taxpayer who is a qualifying child. Tax return for students The facts are the same as in Example 1 except that you are only 18 years old. Tax return for students This means you are a qualifying child of your mother. Tax return for students Because of Rule 10, discussed next, you cannot claim the EIC and cannot claim your son as a qualifying child. Tax return for students Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. Tax return for students If your mother meets all the other requirements for claiming the EIC and you do not claim Jimmy as a qualifying child for any of the other tax benefits listed earlier, your mother can claim both you and Jimmy as qualifying children for the EIC. Tax return for students Example 6—grandparent with too much earned income to claim EIC. Tax return for students The facts are the same as in Example 1 except that your mother earned $50,000 from her job. Tax return for students Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. Tax return for students Example 7—parent with too much earned income to claim EIC. Tax return for students The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. Tax return for students Your earned income is too high for you to claim the EIC. Tax return for students But your mother cannot claim the EIC either, because her AGI is not higher than yours. Tax return for students Example 8—child lived with both parents and grandparent. Tax return for students The facts are the same as in Example 1 except that you and Jimmy's father are married to each other, live with Jimmy and your mother, and have AGI of $30,000 on a joint return. Tax return for students If you and your husband do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can claim him instead. Tax return for students Even though the AGI on your joint return, $30,000, is more than your mother's AGI of $20,000, for this purpose half of the joint AGI can be treated as yours and half as your husband's. Tax return for students In other words, each parent's AGI can be treated as $15,000. Tax return for students Example 9—separated parents. Tax return for students You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. Tax return for students In August and September, Joey lived with you. Tax return for students For the rest of the year, Joey lived with your husband, who is Joey's father. Tax return for students Joey is a qualifying child of both you and your husband because he lived with each of you for more than half the year and because he met the relationship, age, and joint return tests for both of you. Tax return for students At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the Special rule for divorced or separated parents (or parents who live apart) does not apply. Tax return for students You and your husband will file separate returns. Tax return for students Your husband agrees to let you treat Joey as a qualifying child. Tax return for students This means, if your husband does not claim Joey as a qualifying child for any of the tax benefits listed earlier, you can claim him as a qualifying child for any tax benefit listed earlier for which you qualify. Tax return for students However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. Tax return for students See Rule 3. Tax return for students Example 10—separated parents claim same child. Tax return for students The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. Tax return for students In this case, only your husband will be allowed to treat Joey as a qualifying child. Tax return for students This is because, during 2013, the boy lived with him longer than with you. Tax return for students You cannot claim the EIC (either with or without a qualifying child). Tax return for students However, your husband's filing status is married filing separately, so he cannot claim the EIC or the credit for child and dependent care expenses. Tax return for students See Rule 3. Tax return for students Example 11—unmarried parents. Tax return for students You, your 5-year-old son, and your son's father lived together all year. Tax return for students You and your son's father are not married. Tax return for students Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, and joint return tests for both you and his father. Tax return for students Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. Tax return for students Neither of you had any other income. Tax return for students Your son's father agrees to let you treat the child as a qualifying child. Tax return for students This means, if your son's father does not claim your son as a qualifying child for the EIC or any of the other tax benefits listed earlier, you can claim him as a qualifying child for the EIC and any of the other tax benefits listed earlier for which you qualify. Tax return for students Example 12—unmarried parents claim same child. Tax return for students The facts are the same as in Example 11 except that you and your son's father both claim your son as a qualifying child. Tax return for students In this case, only your son's father will be allowed to treat your son as a qualifying child. Tax return for students This is because his AGI, $14,000, is more than your AGI, $12,000. Tax return for students You cannot claim the EIC (either with or without a qualifying child). Tax return for students Example 13—child did not live with a parent. Tax return for students You and your 7-year-old niece, your sister's child, lived with your mother all year. Tax return for students You are 25 years old, and your AGI is $9,300. Tax return for students Your only income was from a part-time job. Tax return for students Your mother's AGI is $15,000. Tax return for students Her only income was from her job. Tax return for students Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Tax return for students Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, and joint return tests for both you and your mother. Tax return for students However, only your mother can treat her as a qualifying child. Tax return for students This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Tax return for students Special rule for divorced or separated parents (or parents who live apart). Tax return for students   A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following statements are true. Tax return for students The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all time during the last 6 months of 2013, whether or not they are or were married. Tax return for students The child received over half of his or her support for the year from the parents. Tax return for students The child is in the custody of one or both parents for more than half of 2013. Tax return for students Either of the following statements is true. Tax return for students The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return. Tax return for students If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Tax return for students A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 provides that the noncustodial parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during 2013. Tax return for students For details, see Publication 501. Tax return for students Also see Applying Rule 9 to divorced or separated parents (or parents who live apart), next. Tax return for students Applying Rule 9 to divorced or separated parents (or parents who live apart). Tax return for students   If a child is treated as the qualifying child of the noncustodial parent under the special rule just described for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. Tax return for students However, the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for the EIC and other tax benefits listed earlier in this chapter. Tax return for students If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine which person can treat the child as a qualifying child. Tax return for students Example 1. Tax return for students You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Tax return for students Your AGI is $10,000. Tax return for students Your mother’s AGI is $25,000. Tax return for students Your son's father did not live with you or your son. Tax return for students Under the Special rule for divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child. Tax return for students However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the EIC. Tax return for students You and your mother did not have any child care expenses or dependent care benefits. Tax return for students If you do not claim your son as a qualifying child, your mother can claim him as a qualifying child for the EIC and head of household filing status, if she qualifies for these tax benefits. Tax return for students Example 2. Tax return for students The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. Tax return for students Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Tax return for students Example 3. Tax return for students The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the EIC. Tax return for students Your mother also claims him as a qualifying child for head of household filing status. Tax return for students You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. Tax return for students The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. Tax return for students Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Tax return for students ) if all of the following statements are true. Tax return for students You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Tax return for students Or, you are that person's brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Tax return for students You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Tax return for students You lived with that person in the United States for more than half of the year. Tax return for students You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Tax return for students For more details about the tests to be a qualifying child, see Rule 8. Tax return for students If you are a qualifying child of another taxpayer, you cannot claim the EIC. Tax return for students This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Tax return for students Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). Tax return for students Example. Tax return for students You and your daughter lived with your mother all year. Tax return for students You are 22 years old, unmarried, and attended a trade school full time. Tax return for students You had a part-time job and earned $5,700. Tax return for students You had no other income. Tax return for students Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. Tax return for students She can claim the EIC if she meets all the other requirements. Tax return for students Because you are your mother's qualifying child, you cannot claim the EIC. Tax return for students This is so even if your mother cannot or does not claim the EIC. Tax return for students Child of person not required to file a return. Tax return for students   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you met the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Tax return for students Example 1—return not required. Tax return for students The facts are the same as in the last example except your mother had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Tax return for students As a result, you are not your mother's qualifying child. Tax return for students You can claim the EIC if you meet all the other requirements to do so. Tax return for students Example 2—return filed to get refund of tax withheld. Tax return for students The facts are the same as in Example 1 except your mother had wages of $1,500 and had income tax withheld from her wages. Tax return for students She files a return only to get a refund of the income tax withheld and does not claim the EIC or any other tax credits or deductions. Tax return for students As a result, you are not your mother's qualifying child. Tax return for students You can claim the EIC if you meet all the other requirements to do so. Tax return for students Example 3—return filed to get EIC. Tax return for students The facts are the same as in Example 2 except your mother claimed the EIC on her return. Tax return for students Since she filed the return to get the EIC, she is not filing it only to get a refund of income tax withheld. Tax return for students As a result, you are your mother's qualifying child. Tax return for students You cannot claim the EIC. Tax return for students Chapter 3—Rules If You Do Not Have a Qualifying Child Use this chapter if you do not have a qualifying child and have met all the rules in chapter 1. Tax return for students This chapter discusses Rules 11 through 14. Tax return for students You must meet all four of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned income credit without a qualifying child. Tax return for students You can file Form 1040, Form 1040A, or Form 1040EZ to claim the EIC without a qualifying child. Tax return for students If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find out what to do next. Tax return for students If you have a qualifying child. Tax return for students   If you meet Rule 8, you have a qualifying child. Tax return for students If you meet Rule 8 and do not claim the EIC with a qualifying child, you cannot claim the EIC without a qualifying child. Tax return for students Rule 11—You Must Be at Least Age 25 but Under Age 65 You must be at least age 25 but under age 65 at the end of 2013. Tax return for students If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65 at the end of 2013. Tax return for students It does not matter which spouse meets the age test, as long as one of the spouses does. Tax return for students You meet the age test if you were born after December 31, 1948, and before January 2, 1989. Tax return for students If you are married filing a joint return, you meet the age test if either you or your spouse was born after December 31, 1948, and before January 2, 1989. Tax return for students If neither you nor your spouse meets the age test, you cannot claim the EIC. Tax return for students Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Tax return for students Death of spouse. Tax return for students   If you are filing a joint return with your spouse who died in 2013, you meet the age test if your spouse was at least age 25 but under age 65 at the time of death. Tax return for students Example 1. Tax return for students You are age 28 and unmarried. Tax return for students You meet the age test. Tax return for students Example 2—spouse meets age test. Tax return for students You are married and filing a joint return. Tax return for students You are age 23 and your spouse is age 27. Tax return for students You meet the age test because your spouse is at least age 25 but under age 65. Tax return for students Example 3—spouse dies in 2013. Tax return for students You are married and filing a joint return with your spouse who died in August 2013. Tax return for students You are age 67. Tax return for students Your spouse would have become age 65 in November 2013. Tax return for students Because your spouse was under age 65 when she died, you meet the age test. Tax return for students Rule 12—You Cannot Be the Dependent of Another Person If you are not filing a joint return, you meet this rule if: You checked box 6a on Form 1040 or 1040A, or You did not check the “You” box on line 5 of Form 1040EZ, and you entered $10,000 on that line. Tax return for students If you are filing a joint return, you meet this rule if: You checked both box 6a and box 6b on Form 1040 or 1040A, or You and your spouse did not check either the “You” box or the “Spouse” box on line 5 of Form 1040EZ, and you entered $20,000 on that line. Tax return for students If you are not sure whether someone else can claim you as a dependent, get Publication 501 and read the rules for claiming a dependent. Tax return for students If someone else can claim you as a dependent on his or her return, but does not, you still cannot claim the credit. Tax return for students Example 1. Tax return for students In 2013, you were age 25, single, and living at home with your parents. Tax return for students You worked and were not a student. Tax return for students You earned $7,500. Tax return for students Your parents cannot claim you as a dependent. Tax return for students When you file your return, you claim an exemption for yourself by not checking the You box on line 5 of your Form 1040EZ and by entering $10,000 on that line. Tax return for students You meet this rule. Tax return for students You can claim the EIC if you meet all the other requirements. Tax return for students Example 2. Tax return for students The facts are the same as in Example 1, except that you earned $2,000. Tax return for students Your parents can claim you as a dependent but decide not to. Tax return for students You do not meet this rule. Tax return for students You cannot claim the credit because your parents could have claimed you as a dependent. Tax return for students Joint returns. Tax return for students   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. Tax return for students   However, another person may be able to claim you as a dependent if you and your spouse file a joint return merely to claim a refund of income tax withheld or estimated tax paid. Tax return for students But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. Tax return for students Example 1—return filed to get refund of tax withheld. Tax return for students You are 26 years old. Tax return for students You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. Tax return for students Neither you nor your wife is required to file a tax return. Tax return for students You do not have a child. Tax return for students Taxes were taken out of your pay so you file a joint return only to get a refund of the withheld taxes. Tax return for students Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. Tax return for students They can claim exemptions for you and your wife if all the other tests to do so are met. Tax return for students Example 2—return filed to get EIC. Tax return for students The facts are the same as in Example 1except no taxes were taken out of your pay. Tax return for students Also, you and your wife are not required to file a tax return, but you file a joint return to claim an EIC of $63 and get a refund of that amount. Tax return for students Because claiming the EIC is your reason for filing the return, you are not filing it only to claim a refund of income tax withheld or estimated tax paid. Tax return for students Your parents cannot claim an exemption for either you or your wife. Tax return for students Rule 13—You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Tax return for students ) if all of the following statements are true. Tax return for students You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Tax return for students Or, you are that person's brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Tax return for students You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Tax return for students You lived with that person in the United States for more than half of the year. Tax return for students You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Tax return for students For more details about the tests to be a qualifying child, see Rule 8. Tax return for students If you are a qualifying child of another taxpayer, you cannot claim the EIC. Tax return for students This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Tax return for students Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Tax return for students Example. Tax return for students You lived with your mother all year. Tax return for students You are age 26, unmarried, and permanently and totally disabled. Tax return for students Your only income was from a community center where you went three days a week to answer telephones. Tax return for students You earned $5,000 for the year and provided more than half of your own support. Tax return for students Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. Tax return for students She can claim the EIC if she meets all the other requirements. Tax return for students Because you are a qualifying child of your mother, you cannot claim the EIC. Tax return for students This is so even if your mother cannot or does not claim the EIC. Tax return for students Joint returns. Tax return for students   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. Tax return for students   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return merely to claim a refund of income tax withheld or estimated tax paid. Tax return for students But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. Tax return for students Child of person not required to file a return. Tax return for students   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Tax return for students Example 1—return not required. Tax return for students You lived all year with your father. Tax return for students You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. Tax return for students You have no other income, no children, and provided more than half of your own support. Tax return for students Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Tax return for students As a result, you are not your father's qualifying child. Tax return for students You can claim the EIC if you meet all the other requirements to do so. Tax return for students Example 2—return filed to get refund of tax withheld. Tax return for students The facts are the same as in Example 1 except your father had wages of $1,500 and had income tax withheld from his wages. Tax return for students He files a return only to get a refund of the income tax withheld and does not claim the EIC or any other tax credits or deductions. Tax return for students As a result, you are not your father's qualifying child. Tax return for students You can claim the EIC if you meet all the other requirements to do so. Tax return for students Example 3—return filed to get EIC. Tax return for students The facts are the same as in Example 2 except your father claimed the EIC on his return. Tax return for students Since he filed the return to get the EIC, he is not filing it only to get a refund of income tax withheld. Tax return for students As a result, you are your father's qualifying child. Tax return for students You cannot claim the EIC. Tax return for students Rule 14—You Must Have Lived in the United States More Than Half of the Year Your home (and your spouse's, if filing a joint return) must have been in the United States for more than half the year. Tax return for students If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Tax return for students United States. Tax return for students   This means the 50 states and the District of Columbia. Tax return for students It does not include Puerto Rico or U. Tax return for students S. Tax return for students possessions such as Guam. Tax return for students Homeless shelter. Tax return for students   Your home can be any location where you regularly live. Tax return for students You do not need a traditional home. Tax return for students If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. Tax return for students Military personnel stationed outside the United States. Tax return for students   U. Tax return for students S. Tax return for students military personnel stationed outside the United States on extended active duty (defined in chapter 2) are considered to live in the United States during that duty period for purposes of the EIC. Tax return for students Chapter 4—Figuring and Claiming the EIC You must meet one more rule to claim the EIC. Tax return for students You need to know the amount of your earned income to see if you meet the rule in this chapter. Tax return for students You also need to know that amount to figure your EIC. Tax return for students Rule 15—Earned Income Limits Your earned income must be less than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Tax return for students Earned Income Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Tax return for students Employee pay is earned income only if it is taxable. Tax return for students Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Tax return for students But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Tax return for students Earned income is explained in detail in Rule 7 in chapter 1. Tax return for students Figuring earned income. Tax return for students   If you are self-employed, a statutory employee, or a member of the clergy or a church employee who files Schedule SE (Form 1040), you will figure your earned income when you fill out Part 4 of EIC Worksheet B in the Form 1040 instructions. Tax return for students   Otherwise, figure your earned income by using the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b or the Form 1040A instructions for lines 38a and 38b, or the worksheet in Step 2 of the Form 1040EZ instructions for lines 8a and 8b. Tax return for students   When using one of those worksheets to figure your earned income, you will start with the amount on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). Tax return for students You will then reduce that amount by any amount included on that line and described in the following list. Tax return for students Scholarship or fellowship grants not reported on a Form W-2. Tax return for students A scholarship or fellowship grant that was not reported to you on a Form W-2 is not considered earned income for the earned income credit. Tax return for students Inmate's income. Tax return for students Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. Tax return for students This includes amounts received for work performed while in a work release program or while in a halfway house. Tax return for students If you received any amount for work done while an inmate in a penal institution and that amount is included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “PRI” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Tax return for students Pension or annuity from deferred compensation plans. Tax return for students A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan is not considered earned income for the earned income credit. Tax return for students If you received such an amount and it was included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “DFC” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Tax return for students This amount may be reported in box 11 of your Form W-2. Tax return for students If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or an annuity. Tax return for students Clergy. Tax return for students   If you are a member of the clergy who files Schedule SE and the amount on line 2 of that schedule includes an amount that was also re