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Ez Tax Form 2013

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Ez Tax Form 2013

Ez tax form 2013 36. Ez tax form 2013   Earned Income Credit (EIC) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Do You Qualify for the Credit?If Improper Claim Made in Prior Year Part A. Ez tax form 2013 Rules for EveryoneRule 1. Ez tax form 2013 Your AGI Must Be Less Than: Rule 2. Ez tax form 2013 You Must Have a Valid Social Security Number (SSN) Rule 3. Ez tax form 2013 Your Filing Status Cannot Be Married Filing Separately Rule 4. Ez tax form 2013 You Must Be a U. Ez tax form 2013 S. Ez tax form 2013 Citizen or Resident Alien All Year Rule 5. Ez tax form 2013 You Cannot File Form 2555 or Form 2555-EZ Rule 6. Ez tax form 2013 Your Investment Income Must Be $3,300 or Less Rule 7. Ez tax form 2013 You Must Have Earned Income Part B. Ez tax form 2013 Rules If You Have a Qualifying ChildRule 8. Ez tax form 2013 Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9. Ez tax form 2013 Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Rule 10. Ez tax form 2013 You Cannot Be a Qualifying Child of Another Taxpayer Part C. Ez tax form 2013 Rules If You Do Not Have a Qualifying ChildRule 11. Ez tax form 2013 You Must Be at Least Age 25 but Under Age 65 Rule 12. Ez tax form 2013 You Cannot Be the Dependent of Another Person Rule 13. Ez tax form 2013 You Cannot Be a Qualifying Child of Another Taxpayer Rule 14. Ez tax form 2013 You Must Have Lived in the United States More Than Half of the Year Part D. Ez tax form 2013 Figuring and Claiming the EICRule 15. Ez tax form 2013 Your Earned Income Must Be Less Than: IRS Will Figure the EIC for You How To Figure the EIC Yourself ExamplesExample 1. Ez tax form 2013 John and Janet Smith (Form 1040A) Example 2. Ez tax form 2013 Kelly Green (Form 1040EZ) What's New Earned income amount is more. Ez tax form 2013  The maximum amount of income you can earn and still get the credit has increased. Ez tax form 2013 You may be able to take the credit if: You have three or more qualifying children and you earned less than $46,227 ($51,567 if married filing jointly), You have two qualifying children and you earned less than $43,038 ($48,378 if married filing jointly), You have one qualifying child and you earned less than $37,870 ($43,210 if married filing jointly), or You do not have a qualifying child and you earned less than $14,340 ($19,680 if married filing jointly). Ez tax form 2013 Your adjusted gross income also must be less than the amount in the above list that applies to you. Ez tax form 2013 For details, see Rules 1 and 15. Ez tax form 2013 Investment income amount is more. Ez tax form 2013  The maximum amount of investment income you can have and still get the credit has increased to $3,300. Ez tax form 2013 See Rule 6. Ez tax form 2013 Reminders Increased EIC on certain joint returns. Ez tax form 2013  A married person filing a joint return may get more EIC than someone with the same income but a different filing status. Ez tax form 2013 As a result, the EIC table has different columns for married persons filing jointly than for everyone else. Ez tax form 2013 When you look up your EIC in the EIC Table, be sure to use the correct column for your filing status and the number of children you have. Ez tax form 2013 Online help. Ez tax form 2013  You can use the EITC Assistant at www. Ez tax form 2013 irs. Ez tax form 2013 gov/eitc to find out if you are eligible for the credit. Ez tax form 2013 The EITC Assistant is available in English and Spanish. Ez tax form 2013 EIC questioned by IRS. Ez tax form 2013  The IRS may ask you to provide documents to prove you are entitled to claim the EIC. Ez tax form 2013 We will tell you what documents to send us. Ez tax form 2013 These may include: birth certificates, school records, medical records, etc. Ez tax form 2013 The process of establishing your eligibility will delay your refund. Ez tax form 2013 Introduction The earned income credit (EIC) is a tax credit for certain people who work and have less than $51,567 of earned income. Ez tax form 2013 A tax credit usually means more money in your pocket. Ez tax form 2013 It reduces the amount of tax you owe. Ez tax form 2013 The EIC may also give you a refund. Ez tax form 2013 How do you get the earned income credit?   To claim the EIC, you must: Qualify by meeting certain rules, and File a tax return, even if you: Do not owe any tax, Did not earn enough money to file a return, or Did not have income taxes withheld from your pay. Ez tax form 2013 When you complete your return, you can figure your EIC by using a worksheet in the instructions for Form 1040, Form 1040A, or Form 1040EZ. Ez tax form 2013 Or, if you prefer, you can let the IRS figure the credit for you. Ez tax form 2013 How will this chapter help you?   This chapter will explain the following. Ez tax form 2013 The rules you must meet to qualify for the EIC. Ez tax form 2013 How to figure the EIC. Ez tax form 2013 Useful Items - You may want to see: Publication 596 Earned Income Credit (EIC) Form (and Instructions) Schedule EIC Earned Income Credit (Qualifying Child Information) 8862 Information To Claim Earned Income Credit After Disallowance Do You Qualify for the Credit? To qualify to claim the EIC, you must first meet all of the rules explained in Part A, Rules for Everyone . Ez tax form 2013 Then you must meet the rules in Part B, Rules If You Have a Qualifying Child , or Part C, Rules If You Do Not Have a Qualifying Child . Ez tax form 2013 There is one final rule you must meet in Part D, Figuring and Claiming the EIC . Ez tax form 2013 You qualify for the credit if you meet all the rules in each part that applies to you. Ez tax form 2013 If you have a qualifying child, the rules in Parts A, B, and D apply to you. Ez tax form 2013 If you do not have a qualifying child, the rules in Parts A, C, and D apply to you. Ez tax form 2013 Table 36-1, Earned Income Credit in a Nutshell. Ez tax form 2013   Use Table 36–1 as a guide to Parts A, B, C, and D. Ez tax form 2013 The table is a summary of all the rules in each part. Ez tax form 2013 Do you have a qualifying child?   You have a qualifying child only if you have a child who meets the four tests described in Rule 8 and illustrated in Figure 36–1. Ez tax form 2013 If Improper Claim Made in Prior Year If your EIC for any year after 1996 was denied or reduced for any reason other than a math or clerical error, you must attach a completed Form 8862 to your next tax return to claim the EIC. Ez tax form 2013 You must also qualify to claim the EIC by meeting all the rules described in this chapter. Ez tax form 2013 However, if your EIC was denied or reduced as a result of a math or clerical error, do not attach Form 8862 to your next tax return. Ez tax form 2013 For example, if your arithmetic is incorrect, the IRS can correct it. Ez tax form 2013 If you do not provide a correct social security number, the IRS can deny the EIC. Ez tax form 2013 These kinds of errors are called math or clerical errors. Ez tax form 2013 If your EIC for any year after 1996 was denied and it was determined that your error was due to reckless or intentional disregard of the EIC rules, then you cannot claim the EIC for the next 2 years. Ez tax form 2013 If your error was due to fraud, then you cannot claim the EIC for the next 10 years. Ez tax form 2013 More information. Ez tax form 2013   See chapter 5 in Publication 596 for more detailed information about the disallowance period and Form 8862. Ez tax form 2013 Part A. Ez tax form 2013 Rules for Everyone This part of the chapter discusses Rules 1 through 7. Ez tax form 2013 You must meet all seven rules to qualify for the earned income credit. Ez tax form 2013 If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the chapter. Ez tax form 2013 If you meet all seven rules in this part, then read either Part B or Part C (whichever applies) for more rules you must meet. Ez tax form 2013 Rule 1. Ez tax form 2013 Your 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. Ez tax form 2013 Adjusted gross income (AGI). Ez tax form 2013   AGI is the amount on line 38 (Form 1040), line 22 (Form 1040A), or line 4 (Form 1040EZ). Ez tax form 2013 If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. Ez tax form 2013 Example. Ez tax form 2013 Your AGI is $38,550, you are single, and you have one qualifying child. Ez tax form 2013 You cannot claim the EIC because your AGI is not less than $37,870. Ez tax form 2013 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. Ez tax form 2013 Community property. Ez tax form 2013   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. Ez tax form 2013 This is different from the community property rules that apply under Rule 7 . Ez tax form 2013 Rule 2. Ez tax form 2013 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). Ez tax form 2013 Any qualifying child listed on Schedule EIC also must have a valid SSN. Ez tax form 2013 (See Rule 8 if you have a qualifying child. Ez tax form 2013 ) 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. Ez tax form 2013 An example of a federally funded benefit is Medicaid. Ez tax form 2013 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. Ez tax form 2013 S. Ez tax form 2013 citizen or permanent resident, ask the SSA for a new social security card without the legend. Ez tax form 2013 U. Ez tax form 2013 S. Ez tax form 2013 citizen. Ez tax form 2013   If you were a U. Ez tax form 2013 S. Ez tax form 2013 citizen when you received your SSN, you have a valid SSN. Ez tax form 2013 Valid for work only with INS or DHS authorization. Ez tax form 2013   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. Ez tax form 2013 SSN missing or incorrect. Ez tax form 2013   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. Ez tax form 2013 Other taxpayer identification number. Ez tax form 2013   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). Ez tax form 2013 ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. Ez tax form 2013 No SSN. Ez tax form 2013   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). Ez tax form 2013 You cannot claim the EIC. Ez tax form 2013 Getting an SSN. Ez tax form 2013   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, Application for a Social Security Card, with the SSA. Ez tax form 2013 You can get Form SS-5 online at www. Ez tax form 2013 socialsecurity. Ez tax form 2013 gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. Ez tax form 2013 Filing deadline approaching and still no SSN. Ez tax form 2013   If the filing deadline is approaching and you still do not have an SSN, you have two choices. Ez tax form 2013 Request an automatic 6-month extension of time to file your return. Ez tax form 2013 You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Ez tax form 2013 S. Ez tax form 2013 Individual Income Tax Return. Ez tax form 2013 For more information, see chapter 1 . Ez tax form 2013 File the return on time without claiming the EIC. Ez tax form 2013 After receiving the SSN, file an amended return (Form 1040X, Amended U. Ez tax form 2013 S. Ez tax form 2013 Individual Income Tax Return) claiming the EIC. Ez tax form 2013 Attach a filled-in Schedule EIC if you have a qualifying child. Ez tax form 2013 Table 36-1. Ez tax form 2013 Earned Income Credit in a Nutshell First, you must meet all the rules in this column. Ez tax form 2013 Second, you must meet all the rules in one of these columns, whichever applies. Ez tax form 2013 Third, you must meet the rule in this column. Ez tax form 2013 Part A. Ez tax form 2013  Rules for Everyone Part B. Ez tax form 2013  Rules If You Have a Qualifying Child Part C. Ez tax form 2013  Rules If You Do Not Have a Qualifying Child Part D. Ez tax form 2013  Figuring and Claiming the EIC 1. Ez tax form 2013 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. Ez tax form 2013 2. Ez tax form 2013 You must have a valid social security number. Ez tax form 2013  3. Ez tax form 2013 Your filing status cannot be “Married filing separately. Ez tax form 2013 ” 4. Ez tax form 2013 You must be a U. Ez tax form 2013 S. Ez tax form 2013 citizen or resident alien all year. Ez tax form 2013  5. Ez tax form 2013 You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income). Ez tax form 2013  6. Ez tax form 2013 Your investment income must be $3,300 or less. Ez tax form 2013  7. Ez tax form 2013 You must have earned income. Ez tax form 2013 8. Ez tax form 2013 Your child must meet the relationship, age, residency, and joint return tests. Ez tax form 2013  9. Ez tax form 2013 Your qualifying child cannot be used by more than one person to claim the EIC. Ez tax form 2013  10. Ez tax form 2013 You cannot be a qualifying child of another person. Ez tax form 2013 11. Ez tax form 2013 You must be at least age 25 but under age 65. Ez tax form 2013  12. Ez tax form 2013 You cannot be the dependent of another person. Ez tax form 2013  13. Ez tax form 2013 You cannot be a qualifying child of another person. Ez tax form 2013  14. Ez tax form 2013 You must have lived in the United States more than half of the year. Ez tax form 2013 15. Ez tax form 2013 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. Ez tax form 2013 Rule 3. Ez tax form 2013 Your Filing Status Cannot Be Married Filing Separately If you are married, you usually must file a joint return to claim the EIC. Ez tax form 2013 Your filing status cannot be “Married filing separately. Ez tax form 2013 ” Spouse did not live with you. Ez tax form 2013   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. Ez tax form 2013 In that case, you may be able to claim the EIC. Ez tax form 2013 For detailed information about filing as head of household, see chapter 2 . Ez tax form 2013 Rule 4. Ez tax form 2013 You Must Be a U. Ez tax form 2013 S. Ez tax form 2013 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. Ez tax form 2013 You can use that filing status only if one spouse is a U. Ez tax form 2013 S. Ez tax form 2013 citizen or resident alien and you choose to treat the nonresident spouse as a U. Ez tax form 2013 S. Ez tax form 2013 resident. Ez tax form 2013 If you make this choice, you and your spouse are taxed on your worldwide income. Ez tax form 2013 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). Ez tax form 2013 If you need more information on making this choice, get Publication 519, U. Ez tax form 2013 S. Ez tax form 2013 Tax Guide for Aliens. Ez tax form 2013 Rule 5. Ez tax form 2013 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. Ez tax form 2013 You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. Ez tax form 2013 U. Ez tax form 2013 S. Ez tax form 2013 possessions are not foreign countries. Ez tax form 2013 See Publication 54, Tax Guide for U. Ez tax form 2013 S. Ez tax form 2013 Citizens and Resident Aliens Abroad, for more detailed information. Ez tax form 2013 Rule 6. Ez tax form 2013 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. Ez tax form 2013 If your investment income is more than $3,300, you cannot claim the credit. Ez tax form 2013 For most people, investment income is the total of the following amounts. Ez tax form 2013 Taxable interest (line 8a of Form 1040 or 1040A). Ez tax form 2013 Tax-exempt interest (line 8b of Form 1040 or 1040A). Ez tax form 2013 Dividend income (line 9a of Form 1040 or 1040A). Ez tax form 2013 Capital gain net income (line 13 of Form 1040, if more than zero, or line 10 of Form 1040A). Ez tax form 2013 If you file Form 1040EZ, your investment income is the total of the amount of line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. Ez tax form 2013 However, see Rule 6 in chapter 1 of Publication 596 if: You are filing Schedule E (Form 1040), Form 4797, or Form 8814, or You are reporting income from the rental of personal property on Form 1040, line 21. Ez tax form 2013 Rule 7. Ez tax form 2013 You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. Ez tax form 2013 If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. Ez tax form 2013 If you are an employee, earned income includes all the taxable income you get from your employer. Ez tax form 2013 If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the instructions for Form 1040. Ez tax form 2013 Earned Income Earned income includes all of the following types of income. Ez tax form 2013 Wages, salaries, tips, and other taxable employee pay. Ez tax form 2013 Employee pay is earned income only if it is taxable. Ez tax form 2013 Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Ez tax form 2013 But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained below. Ez tax form 2013 Net earnings from self-employment. Ez tax form 2013 Gross income received as a statutory employee. Ez tax form 2013 Wages, salaries, and tips. Ez tax form 2013   Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. Ez tax form 2013 You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). Ez tax form 2013 Nontaxable combat pay election. Ez tax form 2013   You can elect to include your nontaxable combat pay in earned income for the earned income credit. Ez tax form 2013 Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. Ez tax form 2013 Figure the credit with and without your nontaxable combat pay before making the election. Ez tax form 2013   If you make the election, you must include in earned income all nontaxable combat pay you received. Ez tax form 2013 If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. Ez tax form 2013 In other words, if one of you makes the election, the other one can also make it but does not have to. Ez tax form 2013   The amount of your nontaxable combat pay should be shown in box 12 of your Form W-2 with code “Q. Ez tax form 2013 ” Self-employed persons and statutory employees. Ez tax form 2013   If you are self-employed or received income as a statutory employee, you must use the Form 1040 instructions to see if you qualify to get the EIC. Ez tax form 2013 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. Ez tax form 2013 Each approved form exempts certain income from social security taxes. Ez tax form 2013 Each form is discussed here in terms of what is or is not earned income for the EIC. Ez tax form 2013 Form 4361. Ez tax form 2013   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. Ez tax form 2013 This includes wages, salaries, tips, and other taxable employee compensation. Ez tax form 2013 A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. Ez tax form 2013 Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. Ez tax form 2013 Examples include fees for performing marriages and honoraria for delivering speeches. Ez tax form 2013 Form 4029. Ez tax form 2013   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. Ez tax form 2013 However, amounts you received as a self-employed individual do not count as earned income. Ez tax form 2013 Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. Ez tax form 2013 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. Ez tax form 2013 Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. Ez tax form 2013 You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. Ez tax form 2013 Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Ez tax form 2013 Report taxable pension payments on Form 1040, lines 16a and 16b (or Form 1040A, lines 12a and 12b). Ez tax form 2013 Disability insurance payments. Ez tax form 2013   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. Ez tax form 2013 It does not matter whether you have reached minimum retirement age. Ez tax form 2013 If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. Ez tax form 2013 ” 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. Ez tax form 2013 Do not include any of these items in your earned income. Ez tax form 2013 Earnings while an inmate. Ez tax form 2013   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. Ez tax form 2013 This includes amounts for work performed while in a work release program or while in a halfway house. Ez tax form 2013 Workfare payments. Ez tax form 2013   Nontaxable workfare payments are not earned income for the EIC. Ez tax form 2013 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 private sector employment is not available, or (2) community service program activities. Ez tax form 2013 Community property. Ez tax form 2013   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. Ez tax form 2013 That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. Ez tax form 2013 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. Ez tax form 2013 Nevada, Washington, and California domestic partners. Ez tax form 2013   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. Ez tax form 2013 Your earned income for the EIC does not include any amount earned by your partner. Ez tax form 2013 Your earned income includes the entire amount you earned. Ez tax form 2013 For details, see Publication 555. Ez tax form 2013 Conservation Reserve Program (CRP) payments. Ez tax form 2013   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. Ez tax form 2013 Nontaxable military pay. Ez tax form 2013   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. Ez tax form 2013 Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). Ez tax form 2013 See Publication 3, Armed Forces' Tax Guide, for more information. Ez tax form 2013    Combat pay. Ez tax form 2013 You can elect to include your nontaxable combat pay in earned income for the EIC. Ez tax form 2013 See Nontaxable combat pay election, earlier. Ez tax form 2013 Part B. Ez tax form 2013 Rules If You Have a Qualifying Child If you have met all of the rules in Part A , read Part B to see if you have a qualifying child. Ez tax form 2013 Part B discusses Rules 8 through 10. Ez tax form 2013 You must meet all three of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit with a qualifying child. Ez tax form 2013 You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. Ez tax form 2013 (You cannot file Form 1040EZ. Ez tax form 2013 ) You also must complete Schedule EIC and attach it to your return. Ez tax form 2013 If you meet all the rules in Part A and this part, read Part D to find out what to do next. Ez tax form 2013 If you do not meet Rule 8, you do not have a qualifying child. Ez tax form 2013 Read Part C to find out if you can get the earned income credit without a qualifying child. Ez tax form 2013 Rule 8. Ez tax form 2013 Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. Ez tax form 2013 The four tests are: Relationship, Age, Residency, and Joint return. Ez tax form 2013 The four tests are illustrated in Figure 36–1. Ez tax form 2013 The paragraphs that follow contain more information about each test. Ez tax form 2013 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). Ez tax form 2013 The following definitions clarify the relationship test. Ez tax form 2013 Adopted child. Ez tax form 2013   An adopted child is always treated as your own child. Ez tax form 2013 The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Ez tax form 2013 Foster child. Ez tax form 2013   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgement, decree, or other order of any court of competent jurisdiction. Ez tax form 2013 An authorized placement agency includes a state or local government agency. Ez tax form 2013 It also includes a tax-exempt organization licensed by a state. Ez tax form 2013 In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. Ez tax form 2013 Example. Ez tax form 2013 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. Ez tax form 2013 Debbie is your foster child. Ez tax form 2013 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. Ez tax form 2013    The following examples and definitions clarify the age test. Ez tax form 2013 Example 1—child not under age 19. Ez tax form 2013 Your son turned 19 on December 10. Ez tax form 2013 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. Ez tax form 2013 Example 2—child not younger than you or your spouse. Ez tax form 2013 Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. Ez tax form 2013 He is not disabled. Ez tax form 2013 Both you and your spouse are 21 years old and you file a joint return. Ez tax form 2013 Your brother is not your qualifying child because he is not younger than you or your spouse. Ez tax form 2013 Example 3—child younger than your spouse but not younger than you. Ez tax form 2013 The facts are the same as in Example 2 except that your spouse is 25 years old. Ez tax form 2013 Because your brother is younger than your spouse, he is your qualifying child even though he is not younger than you. Ez tax form 2013 Student defined. Ez tax form 2013   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. Ez tax form 2013 The 5 calendar months need not be consecutive. Ez tax form 2013   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. Ez tax form 2013 School defined. Ez tax form 2013   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Ez tax form 2013 However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. Ez tax form 2013 Vocational high school students. Ez tax form 2013   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. Ez tax form 2013 Permanently and totally disabled. Ez tax form 2013   Your child is permanently and totally disabled if both of the following apply. Ez tax form 2013 He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Ez tax form 2013 A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Ez tax form 2013 Residency Test Your child must have lived with you in the United States for more than half of 2013. Ez tax form 2013 The following definitions clarify the residency test. Ez tax form 2013 United States. Ez tax form 2013   This means the 50 states and the District of Columbia. Ez tax form 2013 It does not include Puerto Rico or U. Ez tax form 2013 S. Ez tax form 2013 possessions such as Guam. Ez tax form 2013 Homeless shelter. Ez tax form 2013   Your home can be any location where you regularly live. Ez tax form 2013 You do not need a traditional home. Ez tax form 2013 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. Ez tax form 2013 Military personnel stationed outside the United States. Ez tax form 2013    U. Ez tax form 2013 S. Ez tax form 2013 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. Ez tax form 2013 Figure 36-1. Ez tax form 2013 Tests for Qualifying Child Please click here for the text description of the image. Ez tax form 2013 Qualifying child Extended active duty. Ez tax form 2013   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Ez tax form 2013 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. Ez tax form 2013 Birth or death of a child. Ez tax form 2013   A 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. Ez tax form 2013 Temporary absences. Ez tax form 2013   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. Ez tax form 2013 Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. Ez tax form 2013 Kidnapped child. Ez tax form 2013    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. Ez tax form 2013 The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or your child's family. Ez tax form 2013 This treatment applies for all years until the child is returned. Ez tax form 2013 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. Ez tax form 2013   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. Ez tax form 2013 Joint Return Test To meet this test, the child cannot file a joint return for the year. Ez tax form 2013 Exception. Ez tax form 2013   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. Ez tax form 2013 Example 1—child files joint return. Ez tax form 2013 You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Ez tax form 2013 He earned $25,000 for the year. Ez tax form 2013 The couple files a joint return. Ez tax form 2013 Because your daughter and her husband filed a joint return, she is not your qualifying child. Ez tax form 2013 Example 2—child files joint return only to claim a refund of withheld tax. Ez tax form 2013 Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Ez tax form 2013 They do not have a child. Ez tax form 2013 Neither is required to file a tax return. Ez tax form 2013 Taxes were taken out of their pay, so they filed a joint return only to get a refund of the withheld taxes. Ez tax form 2013 The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Ez tax form 2013 Example 3—child files joint return to claim American opportunity credit. Ez tax form 2013 The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Ez tax form 2013 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. Ez tax form 2013 Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. Ez tax form 2013 The exception to the joint return test does not apply, so your son is not your qualifying child. Ez tax form 2013 Married child. Ez tax form 2013   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. Ez tax form 2013 Social security number. Ez tax form 2013   The 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. Ez tax form 2013 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), which is issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. Ez tax form 2013   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. Ez tax form 2013 For more information about SSNs, see Rule 2 . Ez tax form 2013 Rule 9. Ez tax form 2013 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. Ez tax form 2013 However, only one of these persons can actually treat the child as a qualifying child. Ez tax form 2013 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). Ez tax form 2013 The exemption for the child. Ez tax form 2013 The child tax credit. Ez tax form 2013 Head of household filing status. Ez tax form 2013 The credit for child and dependent care expenses. Ez tax form 2013 The exclusion for dependent care benefits. Ez tax form 2013 The EIC. Ez tax form 2013 The other person cannot take any of these benefits based on this qualifying child. Ez tax form 2013 In other words, you and the other person cannot agree to divide these tax benefits between you. Ez tax form 2013 The other person cannot take any of these tax benefits unless he or she has a different qualifying child. Ez tax form 2013 The tiebreaker rules explained next explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. Ez tax form 2013 However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. Ez tax form 2013 Tiebreaker rules. Ez tax form 2013   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. Ez tax form 2013 If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 See Example 8 . Ez tax form 2013   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. Ez tax form 2013 See Examples 1 through 13 . Ez tax form 2013   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 Part C for people who do not have a qualifying child. Ez tax form 2013 If the other person cannot claim the EIC. Ez tax form 2013   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. Ez tax form 2013 See Examples 6 and 7 . Ez tax form 2013 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. Ez tax form 2013 Examples. Ez tax form 2013 The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. Ez tax form 2013 Example 1. Ez tax form 2013 You and your 2-year-old son Jimmy lived with your mother all year. Ez tax form 2013 You are 25 years old, unmarried, and your AGI is $9,000. Ez tax form 2013 Your only income was $9,000 from a part-time job. Ez tax form 2013 Your mother's only income was $20,000 from her job, and her AGI is $20,000. Ez tax form 2013 Jimmy's father did not live with you or Jimmy. Ez tax form 2013 The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. Ez tax form 2013 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. Ez tax form 2013 However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier for which that person qualifies). Ez tax form 2013 He is not a qualifying child of anyone else, including his father. Ez tax form 2013 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). Ez tax form 2013 Example 2. Ez tax form 2013 The facts are the same as in Example 1 except your AGI is $25,000. Ez tax form 2013 Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. Ez tax form 2013 Only you can claim him. Ez tax form 2013 Example 3. Ez tax form 2013 The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 Example 4. Ez tax form 2013 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. Ez tax form 2013 Only one of you can claim each child. Ez tax form 2013 However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Ez tax form 2013 For example, if you claim one child, your mother can claim the other two. Ez tax form 2013 Example 5. Ez tax form 2013 The facts are the same as in Example 1 except that you are only 18 years old. Ez tax form 2013 This means you are a qualifying child of your mother. Ez tax form 2013 Because of Rule 10 , discussed next, you cannot claim the EIC and cannot claim Jimmy as a qualifying child. Ez tax form 2013 Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. Ez tax form 2013 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. Ez tax form 2013 Example 6. Ez tax form 2013 The facts are the same as in Example 1 except that your mother earned $50,000 from her job. Ez tax form 2013 Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. Ez tax form 2013 Example 7. Ez tax form 2013 The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. Ez tax form 2013 Your earned income is too high for you to claim the EIC. Ez tax form 2013 But your mother cannot claim the EIC either, because her AGI is not higher than yours. Ez tax form 2013 Example 8. Ez tax form 2013 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 an AGI of $30,000 on a joint return. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 In other words, each parent's AGI can be treated as $15,000. Ez tax form 2013 Example 9. Ez tax form 2013 You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. Ez tax form 2013 In August and September, Joey lived with you. Ez tax form 2013 For the rest of the year, Joey lived with your husband, who is Joey's father. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 You and your husband will file separate returns. Ez tax form 2013 Your husband agrees to let you treat Joey as a qualifying child. Ez tax form 2013 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. Ez tax form 2013 However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. Ez tax form 2013 See Rule 3 . Ez tax form 2013 Example 10. Ez tax form 2013 The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. Ez tax form 2013 In this case, only your husband will be allowed to treat Joey as a qualifying child. Ez tax form 2013 This is because, during 2013, the boy lived with him longer than with you. Ez tax form 2013 You cannot claim the EIC (either with or without a qualifying child). Ez tax form 2013 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. Ez tax form 2013 See Rule 3 . Ez tax form 2013 Example 11. Ez tax form 2013 You, your 5-year-old son and your son's father lived together all year. Ez tax form 2013 You and your son's father are not married. Ez tax form 2013 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. Ez tax form 2013 Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. Ez tax form 2013 Neither of you had any other income. Ez tax form 2013 Your son's father agrees to let you treat the child as a qualifying child. Ez tax form 2013 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. Ez tax form 2013 Example 12. Ez tax form 2013 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. Ez tax form 2013 In this case, only your son's father will be allowed to treat your son as a qualifying child. Ez tax form 2013 This is because his AGI, $14,000, is more than your AGI, $12,000. Ez tax form 2013 You cannot claim the EIC (either with or without a qualifying child). Ez tax form 2013 Example 13. Ez tax form 2013 You and your 7-year-old niece, your sister's child, lived with your mother all year. Ez tax form 2013 You are 25 years old, and your AGI is $9,300. Ez tax form 2013 Your only income was from a part-time job. Ez tax form 2013 Your mother's AGI is $15,000. Ez tax form 2013 Her only income was from her job. Ez tax form 2013 Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Ez tax form 2013 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. Ez tax form 2013 However, only your mother can treat her as a qualifying child. Ez tax form 2013 This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Ez tax form 2013 Special rule for divorced or separated parents (or parents who live apart). Ez tax form 2013   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. Ez tax form 2013 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 times during the last 6 months of 2013, whether or not they are or were married. Ez tax form 2013 The child received over half of his or her support for the year from the parents. Ez tax form 2013 The child is in the custody of one or both parents for more than half of 2013. Ez tax form 2013 Either of the following statements is true. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013  For details, see chapter 3. Ez tax form 2013 Also see Applying Rule 9 to divorced or separated parents (or parents who live apart) , next. Ez tax form 2013 Applying Rule 9 to divorced or separated parents (or parents who live apart). Ez tax form 2013   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. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 Example 1. Ez tax form 2013 You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Ez tax form 2013 Your AGI is $10,000. Ez tax form 2013 Your mother’s AGI is $25,000. Ez tax form 2013 Your son's father did not live with you or your son. Ez tax form 2013 Under the special rule for children of 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. Ez tax form 2013 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. Ez tax form 2013 You and your mother did not have any child care expenses or dependent care benefits. Ez tax form 2013 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. Ez tax form 2013 Example 2. Ez tax form 2013 The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. Ez tax form 2013 Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Ez tax form 2013 Example 3. Ez tax form 2013 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. Ez tax form 2013 Your mother also claims him as a qualifying child for head of household filing status. Ez tax form 2013 You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. Ez tax form 2013 The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. Ez tax form 2013 Rule 10. Ez tax form 2013 You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Ez tax form 2013 ) if all of the following statements are true. Ez tax form 2013 You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Ez tax form 2013 Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Ez tax form 2013 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. Ez tax form 2013 You lived with that person in the United States for more than half of the year. Ez tax form 2013 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). Ez tax form 2013 For more details about the tests to be a qualifying child, see Rule 8 . Ez tax form 2013 If you are a qualifying child of another taxpayer, you cannot claim the EIC. Ez tax form 2013 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. Ez tax form 2013 Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). Ez tax form 2013 Example. Ez tax form 2013 You and your daughter lived with your mother all year. Ez tax form 2013 You are 22 years old, unmarried, and attended a trade school full time. Ez tax form 2013 You had a part-time job and earned $5,700. Ez tax form 2013 You had no other income. Ez tax form 2013 Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. Ez tax form 2013 She can claim the EIC if she meets all the other requirements. Ez tax form 2013 Because you are your mother's qualifying child, you cannot claim the EIC. Ez tax form 2013 This is so even if your mother cannot or does not claim the EIC. Ez tax form 2013 Child of person not required to file a return. Ez tax form 2013   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. Ez tax form 2013 Example. Ez tax form 2013 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. Ez tax form 2013 As a result, you are not your mother's qualifying child. Ez tax form 2013 You can claim the EIC if you meet all the other requirements to do so. Ez tax form 2013   See Rule 10 in Publication 596 for additional examples. Ez tax form 2013 Part C. Ez tax form 2013 Rules If You Do Not Have a Qualifying Child Read this part if you: Do not have a qualifying child, and Have met all the rules in Part A . Ez tax form 2013  Part C discusses Rules 11 through 14. Ez tax form 2013 You must meet all four of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit without a qualifying child. Ez tax form 2013 If you have a qualifying child, the rules in this part do not apply to you. Ez tax form 2013 You can claim the credit only if you meet all the rules in Parts A, B, and D. Ez tax form 2013 See Rule 8 to find out if you have a qualifying child. Ez tax form 2013 Rule 11. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 It does not matter which spouse meets the age test, as long as one of the spouses does. Ez tax form 2013 You meet the age test if you were born after December 31, 1948, and before January 2, 1989. Ez tax form 2013 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. Ez tax form 2013 If neither you nor your spouse meets the age test, you cannot claim the EIC. Ez tax form 2013 Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Ez tax form 2013 Death of spouse. Ez tax form 2013   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. Ez tax form 2013 Example 1. Ez tax form 2013 You are age 28 and unmarried. Ez tax form 2013 You meet the age test. Ez tax form 2013 Example 2—spouse meets age test. Ez tax form 2013 You are married and filing a joint return. Ez tax form 2013 You are age 23 and your spouse is age 27. Ez tax form 2013 You meet the age test because your spouse is at least age 25 but under age 65. Ez tax form 2013 Example 3—spouse dies in 2013. Ez tax form 2013 You are married and filing a joint return with your spouse who died in August 2013. Ez tax form 2013 You are age 67. Ez tax form 2013 Your spouse would have become age 65 in November 2013. Ez tax form 2013 Because your spouse was under age 65 when she died, you meet the age test. Ez tax form 2013 Rule 12. Ez tax form 2013 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. Ez tax form 2013 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. Ez tax form 2013 If you are not sure whether someone else can claim you (or your spouse, if filing a joint return) as a dependent, read the rules for claiming a dependent in chapter 3. Ez tax form 2013 If someone else can claim you (or your spouse, if filing a joint return) as a dependent on his or her return, but does not, you still cannot claim the credit. Ez tax form 2013 Example 1. Ez tax form 2013 In 2013, you were age 25, single, and living at home with your parents. Ez tax form 2013 You worked and were not a student. Ez tax form 2013 You earned $7,500. Ez tax form 2013 Your parents cannot claim you as a dependent. Ez tax form 2013 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. Ez tax form 2013 You meet this rule. Ez tax form 2013 You can claim the EIC if you meet all the other requirements. Ez tax form 2013 Example 2. Ez tax form 2013 The facts are the same as in Example 1 , except that you earned $2,000. Ez tax form 2013 Your parents can claim you as a dependent but decide not to. Ez tax form 2013 You do not meet this rule. Ez tax form 2013 You cannot claim the credit because your parents could have claimed you as a dependent. Ez tax form 2013 Joint returns. Ez tax form 2013   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. Ez tax form 2013   However, another person may be able to claim you as a dependent if you and your spouse file a joint return only to get a refund of income tax withheld or estimated tax paid. Ez tax form 2013 But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. Ez tax form 2013 Example 1. Ez tax form 2013 You are 26 years old. Ez tax form 2013 You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. Ez tax form 2013 Neither you nor your wife is required to file a tax return. Ez tax form 2013 You do not have a child. Ez tax form 2013 Taxes were taken out of your pay, so you file a joint return only to get a refund of the withheld taxes. Ez tax form 2013 Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. Ez tax form 2013 They can claim exemptions for you and your wife if all the other tests to do so are met. Ez tax form 2013 Example 2. Ez tax form 2013 The facts are the same as in Example 1 except no taxes were taken out of your pay. Ez tax form 2013 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. Ez tax form 2013 Because claiming the EIC is your reason for filing the return, you are not filing it only to get a refund of income tax withheld or estimated tax paid. Ez tax form 2013 Your parents cannot claim an exemption for either you or your wife. Ez tax form 2013 Rule 13. Ez tax form 2013 You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Ez tax form 2013 ) if all of the following statements are true. Ez tax form 2013 You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Ez tax form 2013 Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Ez tax form 2013 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 (as defined in Rule 8 ), and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Ez tax form 2013 You lived with that person in the United States for more than half of the year. Ez tax form 2013 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). Ez tax form 2013 For more details about the tests to be a qualifying child, see Rule 8 . Ez tax form 2013 If you are a qualifying child of another taxpayer, you cannot claim the EIC. Ez tax form 2013 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. Ez tax form 2013 Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Ez tax form 2013 Example. Ez tax form 2013 You lived with your mother all year. Ez tax form 2013 You are age 26, unmarried, and permanently and totally disabled. Ez tax form 2013 Your only income was from a community center where you went three days a week to answer telephones. Ez tax form 2013 You earned $5,000 for the year and provided more than half of your own support. Ez tax form 2013 Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. Ez tax form 2013 She can claim the EIC if she meets all the other requirements. Ez tax form 2013 Because you are a qualifying child of your mother, you cannot claim the EIC. Ez tax form 2013 This is so even if your mother cannot or does not claim the EIC. Ez tax form 2013 Joint returns. Ez tax form 2013   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. Ez tax form 2013   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return for the year only to get a refund of income tax withheld or estimated tax paid. Ez tax form 2013 But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. Ez tax form 2013 Child of person not required to file a return. Ez tax form 2013   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. Ez tax form 2013 Example. Ez tax form 2013 You lived all year with your father. Ez tax form 2013 You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. Ez tax form 2013 You have no other income, no children, and provided more than half of your own support. Ez tax form 2013 Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Ez tax form 2013 As a result, you are not your father's qualifying child. Ez tax form 2013 You can claim the EIC if you meet all the other requirements to do so. Ez tax form 2013   See Rule 13 in Publication 596 for additional examples. Ez tax form 2013 Rule 14. Ez tax form 2013 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. Ez tax form 2013 If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Ez tax form 2013 United States. Ez tax form 2013   This means the 50 states and the District of Columbia. Ez tax form 2013 It does not include Puerto Rico or U. Ez tax form 2013 S. Ez tax form 2013 possessions such as Guam. Ez tax form 2013 Homeless shelter. Ez tax form 2013   Your home can be any location where you regularly live. Ez tax form 2013 You do not need a traditional home. Ez tax form 2013 If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. Ez tax form 2013 Military personnel stationed outside the United States. Ez tax form 2013   U. Ez tax form 2013 S. Ez tax form 2013 military personnel stationed outside the United States on extended active duty (defined in Rule 8 ) are considered to live in the United States during that duty period for purposes of the EIC. Ez tax form 2013 Part D. Ez tax form 2013 Figuring and Claiming the EIC Read this part if you have met all the rules in Parts A and B, or all the rules in Parts A and C. Ez tax form 2013 Part D discusses Rule 15 . Ez tax form 2013 You must meet this rule, in addition to the rules in Parts A and B , or Parts A and C , to qualify for the earned income credit. Ez tax form 2013 This part of the chapter also explains how to figure the amount of your credit. Ez tax form 2013 You have two choices. Ez tax form 2013 Have the IRS figure the EIC for you. Ez tax form 2013 If you want to do this, see IRS Will Figure the EIC for You . Ez tax form 2013 Figure the EIC yourself. Ez tax form 2013 If you want to do this, see How To Figure the EIC Yourself . Ez tax form 2013 Rule 15. Ez tax form 2013 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. Ez tax form 2013 Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Ez tax form 2013 Employee pay is earned income only if it is taxable. Ez tax form 2013 Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Ez tax form 2013 But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Ez tax form 2013 Earned income is explained in detail in Rule 7 . Ez tax form 2013 Figuring earned income. Ez tax form 2013   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. Ez tax form 2013   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. Ez tax form 2013   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). Ez tax form 2013 You will then reduce that amount by any amount included on that line and described in the following list: Scholarship or fellowship grants not reported on a Form W-2, Inmate's income, and Pension or annuity from deferred compensation plans. Ez tax form 2013 Scholarship or fellowship grants not reported on a Form W-2. Ez tax form 2013   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. Ez tax form 2013 Inmate's income. Ez tax form 2013   Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. Ez tax form 2013 This includes amounts received for work performed while in a work release program or while in a halfway house. Ez tax form 2013 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). Ez tax form 2013 Pension or annuity from deferred compensation plans. Ez tax form 2013   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. Ez tax form 2013 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). Ez tax form 2013 This amount may be reported in box 11 of your Form W-2. Ez tax form 2013 If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. Ez tax form 2013 Clergy. Ez tax form 2013   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 reported on line 7 (Form 1040), subtract that amount from the amount on line 7 (Form 1040) and enter the result in the first space of the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b. Ez tax form 2013 Put “Clergy” on the dotted line next to line 64a (Form 1040). Ez tax form 2013 Church employees. Ez tax form 2013    A church employee means an employee (other than a minister or member of a religious order) of a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes. Ez tax form 2013 If you received wages as a
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The Ez Tax Form 2013

Ez tax form 2013 7. Ez tax form 2013   Coverdell Education Savings Account (ESA) Table of Contents Introduction What Is a Coverdell ESAQualified Education Expenses ContributionsContribution Limits Additional Tax on Excess Contributions Rollovers and Other TransfersRollovers Changing the Designated Beneficiary Transfer Because of Divorce DistributionsTax-Free Distributions Taxable Distributions When Assets Must Be Distributed Introduction If your modified adjusted gross income (MAGI) is less than $110,000 ($220,000 if filing a joint return), you may be able to establish a Coverdell ESA to finance the qualified education expenses of a designated beneficiary. Ez tax form 2013 For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return. Ez tax form 2013 There is no limit on the number of separate Coverdell ESAs that can be established for a designated beneficiary. Ez tax form 2013 However, total contributions for the beneficiary in any year cannot be more than $2,000, no matter how many accounts have been established. Ez tax form 2013 See Contributions , later. Ez tax form 2013 This benefit applies not only to higher education expenses, but also to elementary and secondary education expenses. Ez tax form 2013 What is the tax benefit of the Coverdell ESA. Ez tax form 2013   Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed. Ez tax form 2013   If, for a year, distributions from an account are not more than a designated beneficiary's qualified education expenses at an eligible educational institution, the beneficiary will not owe tax on the distributions. Ez tax form 2013 See Tax-Free Distributions , later. Ez tax form 2013    Table 7-1 summarizes the main features of the Coverdell ESA. Ez tax form 2013 Table 7-1. Ez tax form 2013 Coverdell ESA at a Glance Do not rely on this table alone. Ez tax form 2013 It provides only general highlights. Ez tax form 2013 See the text for definitions of terms in bold type and for more complete explanations. Ez tax form 2013 Question Answer What is a Coverdell ESA? A savings account that is set up to pay the qualified education expenses of a designated beneficiary. Ez tax form 2013 Where can it be established? It can be opened in the United States at any bank or other IRS-approved entity that offers Coverdell ESAs. Ez tax form 2013 Who can have a Coverdell ESA? Any beneficiary who is under age 18 or is a special needs beneficiary. Ez tax form 2013 Who can contribute to a Coverdell ESA? Generally, any individual (including the beneficiary) whose modified adjusted gross income for the year is less than $110,000 ($220,000 in the case of a joint return). Ez tax form 2013 Are distributions tax free? Yes, if the distributions are not more than the beneficiary's adjusted qualified education expenses for the year. Ez tax form 2013 What Is a Coverdell ESA A Coverdell ESA is a trust or custodial account created or organized in the United States only for the purpose of paying the qualified education expenses of the Designated beneficiary (defined later) of the account. Ez tax form 2013 When the account is established, the designated beneficiary must be under age 18 or a special needs beneficiary. Ez tax form 2013 To be treated as a Coverdell ESA, the account must be designated as a Coverdell ESA when it is created. Ez tax form 2013 The document creating and governing the account must be in writing and must satisfy the following requirements. Ez tax form 2013 The trustee or custodian must be a bank or an entity approved by the IRS. Ez tax form 2013 The document must provide that the trustee or custodian can only accept a contribution that meets all of the following conditions. Ez tax form 2013 The contribution is in cash. Ez tax form 2013 The contribution is made before the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. Ez tax form 2013 The contribution would not result in total contributions for the year (not including rollover contributions) being more than $2,000. Ez tax form 2013 Money in the account cannot be invested in life insurance contracts. Ez tax form 2013 Money in the account cannot be combined with other property except in a common trust fund or common investment fund. Ez tax form 2013 The balance in the account generally must be distributed within 30 days after the earlier of the following events. Ez tax form 2013 The beneficiary reaches age 30, unless the beneficiary is a special needs beneficiary. Ez tax form 2013 The beneficiary's death. Ez tax form 2013 Qualified Education Expenses Generally, these are expenses required for the enrollment or attendance of the designated beneficiary at an eligible educational institution. Ez tax form 2013 For purposes of Coverdell ESAs, the expenses can be either qualified higher education expenses or qualified elementary and secondary education expenses. Ez tax form 2013 Designated beneficiary. Ez tax form 2013   This is the individual named in the document creating the trust or custodial account to receive the benefit of the funds in the account. Ez tax form 2013 Contributions to a qualified tuition program (QTP). Ez tax form 2013   A contribution to a QTP is a qualified education expense if the contribution is on behalf of the designated beneficiary of the Coverdell ESA. Ez tax form 2013 In the case of a change in beneficiary, this is a qualified expense only if the new beneficiary is a family member of that designated beneficiary. Ez tax form 2013 See chapter 8, Qualified Tuition Program . Ez tax form 2013 Eligible Educational Institution For purposes of Coverdell ESAs, an eligible educational institution can be either an eligible postsecondary school or an eligible elementary or secondary school. Ez tax form 2013 Eligible postsecondary school. Ez tax form 2013   This is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Ez tax form 2013 S. Ez tax form 2013 Department of Education. Ez tax form 2013 It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Ez tax form 2013 The educational institution should be able to tell you if it is an eligible educational institution. Ez tax form 2013   Certain educational institutions located outside the United States also participate in the U. Ez tax form 2013 S. Ez tax form 2013 Department of Education's Federal Student Aid (FSA) programs. Ez tax form 2013 Eligible elementary or secondary school. Ez tax form 2013   This is any public, private, or religious school that provides elementary or secondary education (kindergarten through grade 12), as determined under state law. Ez tax form 2013 Qualified Higher Education Expenses These are expenses related to enrollment or attendance at an eligible postsecondary school. Ez tax form 2013 As shown in the following list, to be qualified, some of the expenses must be required by the school and some must be incurred by students who are enrolled at least half-time. Ez tax form 2013 The following expenses must be required for enrollment or attendance of a designated beneficiary at an eligible postsecondary school. Ez tax form 2013 Tuition and fees. Ez tax form 2013 Books, supplies, and equipment. Ez tax form 2013 Expenses for special needs services needed by a special needs beneficiary must be incurred in connection with enrollment or attendance at an eligible postsecondary school. Ez tax form 2013 Expenses for room and board must be incurred by students who are enrolled at least half-time (defined below). Ez tax form 2013 The expense for room and board qualifies only to the extent that it is not more than the greater of the following two amounts. Ez tax form 2013 The allowance for room and board, as determined by the school, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. Ez tax form 2013 The actual amount charged if the student is residing in housing owned or operated by the school. Ez tax form 2013 Half-time student. Ez tax form 2013   A student is enrolled “at least half-time” if he or she is enrolled for at least half the full-time academic work load for the course of study the student is pursuing, as determined under the standards of the school where the student is enrolled. Ez tax form 2013 Qualified Elementary and Secondary Education Expenses These are expenses related to enrollment or attendance at an eligible elementary or secondary school. Ez tax form 2013 As shown in the following list, to be qualified, some of the expenses must be required or provided by the school. Ez tax form 2013 There are special rules for computer-related expenses. Ez tax form 2013 The following expenses must be incurred by a designated beneficiary in connection with enrollment or attendance at an eligible elementary or secondary school. Ez tax form 2013 Tuition and fees. Ez tax form 2013 Books, supplies, and equipment. Ez tax form 2013 Academic tutoring. Ez tax form 2013 Special needs services for a special needs beneficiary. Ez tax form 2013 The following expenses must be required or provided by an eligible elementary or secondary school in connection with attendance or enrollment at the school. Ez tax form 2013 Room and board. Ez tax form 2013 Uniforms. Ez tax form 2013 Transportation. Ez tax form 2013 Supplementary items and services (including extended day programs). Ez tax form 2013 The purchase of computer technology, equipment, or Internet access and related services is a qualified elementary and secondary education expense if it is to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is in elementary or secondary school. Ez tax form 2013 (This does not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature. Ez tax form 2013 ) Contributions Any individual (including the designated beneficiary) can contribute to a Coverdell ESA if the individual's MAGI (defined later under Contribution Limits ) for the year is less than $110,000. Ez tax form 2013 For individuals filing joint returns, that amount is $220,000. Ez tax form 2013 Organizations, such as corporations and trusts, can also contribute to Coverdell ESAs. Ez tax form 2013 There is no requirement that an organization's income be below a certain level. Ez tax form 2013 Contributions must meet all of the following requirements. Ez tax form 2013 They must be in cash. Ez tax form 2013 They cannot be made after the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. Ez tax form 2013 They must be made by the due date of the contributor's tax return (not including extensions). Ez tax form 2013 Contributions can be made to one or several Coverdell ESAs for the same designated beneficiary provided that the total contributions are not more than the contribution limits (defined later) for a year. Ez tax form 2013 Contributions can be made, without penalty, to both a Coverdell ESA and a QTP in the same year for the same beneficiary. Ez tax form 2013 Table 7-2 summarizes many of the features of contributing to a Coverdell ESA. Ez tax form 2013 When contributions considered made. Ez tax form 2013   Contributions made to a Coverdell ESA for the preceding tax year are considered to have been made on the last day of the preceding year. Ez tax form 2013 They must be made by the due date (not including extensions) for filing your return for the preceding year. Ez tax form 2013   For example, if you make a contribution to a Coverdell ESA in February 2014, and you designate it as a contribution for 2013, you are considered to have made that contribution on December 31, 2013. Ez tax form 2013 Contribution Limits There are two yearly limits: One on the total amount that can be contributed for each designated beneficiary in any year, and One on the amount that any individual can contribute for any one designated beneficiary for a year. Ez tax form 2013 Limit for each designated beneficiary. Ez tax form 2013   For 2013, the total of all contributions to all Coverdell ESAs set up for the benefit of any one designated beneficiary cannot be more than $2,000. Ez tax form 2013 This includes contributions (other than rollovers) to all the beneficiary's Coverdell ESAs from all sources. Ez tax form 2013 Rollovers are discussed under Rollovers and Other Transfers , later. Ez tax form 2013 Example. Ez tax form 2013 When Maria Luna was born in 2012, three separate Coverdell ESAs were set up for her, one by her parents, one by her grandfather, and one by her aunt. Ez tax form 2013 In 2013, the total of all contributions to Maria's three Coverdell ESAs cannot be more than $2,000. Ez tax form 2013 For example, if her grandfather contributed $2,000 to one of her Coverdell ESAs, no one else could contribute to any of her three accounts. Ez tax form 2013 Or, if her parents contributed $1,000 and her aunt $600, her grandfather or someone else could contribute no more than $400. Ez tax form 2013 These contributions could be put into any of Maria's Coverdell ESA accounts. Ez tax form 2013 Limit for each contributor. Ez tax form 2013   Generally, you can contribute up to $2,000 for each designated beneficiary for 2013. Ez tax form 2013 This is the most you can contribute for the benefit of any one beneficiary for the year, regardless of the number of Coverdell ESAs set up for the beneficiary. Ez tax form 2013 Example. Ez tax form 2013 The facts are the same as in the previous example except that Maria Luna's older brother, Edgar, also has a Coverdell ESA. Ez tax form 2013 If their grandfather contributed $2,000 to Maria's Coverdell ESA in 2013, he could also contribute $2,000 to Edgar's Coverdell ESA. Ez tax form 2013 Reduced limit. Ez tax form 2013   Your contribution limit may be reduced. Ez tax form 2013 If your MAGI (defined on this page) is between $95,000 and $110,000 (between $190,000 and $220,000 if filing a joint return), the $2,000 limit for each designated beneficiary is gradually reduced (see Figuring the limit , later). Ez tax form 2013 If your MAGI is $110,000 or more ($220,000 or more if filing a joint return), you cannot contribute to anyone's Coverdell ESA. Ez tax form 2013 Table 7-2. Ez tax form 2013 Coverdell ESA Contributions at a Glance Do not rely on this table alone. Ez tax form 2013 It provides only general highlights. Ez tax form 2013 See the text for more complete explanations. Ez tax form 2013 Question Answer Are contributions deductible? No. Ez tax form 2013 What is the annual contribution limit per designated beneficiary? $2,000 for each designated beneficiary. Ez tax form 2013 What if more than one Coverdell ESA has been opened for the same designated beneficiary? The annual contribution limit is $2,000 for each beneficiary, no matter how many Coverdell ESAs are set up for that beneficiary. Ez tax form 2013 What if more than one individual makes contributions for the same designated beneficiary? The annual contribution limit is $2,000 per beneficiary, no matter how many individuals contribute. Ez tax form 2013 Can contributions other than cash be made to a Coverdell ESA? No. Ez tax form 2013 When must contributions stop? No contributions can be made to a beneficiary's Coverdell ESA after he or she reaches age 18, unless the beneficiary is a special needs beneficiary. Ez tax form 2013 Modified adjusted gross income (MAGI). Ez tax form 2013   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. Ez tax form 2013 MAGI when using Form 1040A. Ez tax form 2013   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. Ez tax form 2013 MAGI when using Form 1040. Ez tax form 2013   If you file Form 1040, your MAGI is the AGI on line 38 of that form, modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. Ez tax form 2013 MAGI when using Form 1040NR. Ez tax form 2013   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form. Ez tax form 2013 MAGI when using Form 1040NR-EZ. Ez tax form 2013   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form. Ez tax form 2013   If you have any of these adjustments, you can use Worksheet 7-1. Ez tax form 2013 MAGI for a Coverdell ESA , later, to figure your MAGI for Form 1040. Ez tax form 2013 Worksheet 7-1. Ez tax form 2013 MAGI for a Coverdell ESA 1. Ez tax form 2013 Enter your adjusted gross income  (Form 1040, line 38)   1. Ez tax form 2013   2. Ez tax form 2013 Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. Ez tax form 2013       3. Ez tax form 2013 Enter your foreign housing deduction (Form 2555, line 50)   3. Ez tax form 2013         4. Ez tax form 2013 Enter the amount of income from Puerto Rico you are excluding   4. Ez tax form 2013       5. Ez tax form 2013 Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. Ez tax form 2013       6. Ez tax form 2013 Add lines 2, 3, 4, and 5   6. Ez tax form 2013   7. Ez tax form 2013 Add lines 1 and 6. Ez tax form 2013 This is your  modified adjusted gross income   7. Ez tax form 2013   Figuring the limit. Ez tax form 2013    To figure the limit on the amount you can contribute for each designated beneficiary, multiply $2,000 by a fraction. Ez tax form 2013 The numerator (top number) is your MAGI minus $95,000 ($190,000 if filing a joint return). Ez tax form 2013 The denominator (bottom number) is $15,000 ($30,000 if filing a joint return). Ez tax form 2013 Subtract the result from $2,000. Ez tax form 2013 This is the amount you can contribute for each beneficiary. Ez tax form 2013 You can use Worksheet 7-2. Ez tax form 2013 Coverdell ESA Contribution Limit to figure the limit on contributions. Ez tax form 2013    Worksheet 7-2. Ez tax form 2013 Coverdell ESA Contribution Limit 1. Ez tax form 2013 Maximum contribution   1. Ez tax form 2013 $2,000 2. Ez tax form 2013 Enter your modified adjusted gross income (MAGI) for purposes of figuring the contribution limit to a Coverdell ESA (see definition or Worksheet 7-1, earlier)   2. Ez tax form 2013   3. Ez tax form 2013 Enter $190,000 if married filing jointly; $95,000 for all other filers   3. Ez tax form 2013   4. Ez tax form 2013 Subtract line 3 from line 2. Ez tax form 2013 If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. Ez tax form 2013   5. Ez tax form 2013 Enter $30,000 if married filing jointly; $15,000 for all other filers   5. Ez tax form 2013     Note. Ez tax form 2013 If the amount on line 4 is greater than or equal to the amount on line 5, stop here. Ez tax form 2013 You are not allowed to contribute to a Coverdell ESA for 2013. Ez tax form 2013       6. Ez tax form 2013 Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. Ez tax form 2013 . Ez tax form 2013 7. Ez tax form 2013 Multiply line 1 by line 6   7. Ez tax form 2013   8. Ez tax form 2013 Subtract line 7 from line 1   8. Ez tax form 2013   Note: The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. Ez tax form 2013 Example. Ez tax form 2013 Paul, who is single, had a MAGI of $96,500 for 2013. Ez tax form 2013 Paul can contribute up to $1,800 in 2013 for each beneficiary, as shown in the illustrated Worksheet 7-2, Coverdell ESA Contribution Limit–Illustrated. Ez tax form 2013 Worksheet 7-2. Ez tax form 2013 Coverdell ESA Contribution Limit—Illustrated 1. Ez tax form 2013 Maximum contribution   1. Ez tax form 2013 $2,000 2. Ez tax form 2013 Enter your modified adjusted gross  income (MAGI) for purposes of figuring the contribution limit to a Coverdell ESA (see definition or Worksheet 7-1, earlier)   2. Ez tax form 2013 96,500 3. Ez tax form 2013 Enter $190,000 if married filing jointly; $95,000 for all other filers   3. Ez tax form 2013 95,000 4. Ez tax form 2013 Subtract line 3 from line 2. Ez tax form 2013 If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. Ez tax form 2013 1,500 5. Ez tax form 2013 Enter $30,000 if married filing jointly; $15,000 for all other filers   5. Ez tax form 2013 15,000   Note. Ez tax form 2013 If the amount on line 4 is greater than or equal to the amount on line 5,  stop here. Ez tax form 2013 You are not allowed to  contribute to a Coverdell ESA for 2013. Ez tax form 2013       6. Ez tax form 2013 Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. Ez tax form 2013 . Ez tax form 2013 100 7. Ez tax form 2013 Multiply line 1 by line 6   7. Ez tax form 2013 200 8. Ez tax form 2013 Subtract line 7 from line 1   8. Ez tax form 2013 1,800 Note: The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. Ez tax form 2013 Additional Tax on Excess Contributions The beneficiary must pay a 6% excise tax each year on excess contributions that are in a Coverdell ESA at the end of the year. Ez tax form 2013 Excess contributions are the total of the following two amounts. Ez tax form 2013 Contributions to any designated beneficiary's Coverdell ESA for the year that are more than $2,000 (or, if less, the total of each contributor's limit for the year, as discussed earlier). Ez tax form 2013 Excess contributions for the preceding year, reduced by the total of the following two amounts: Distributions (other than those rolled over as discussed later) during the year, and The contribution limit for the current year minus the amount contributed for the current year. Ez tax form 2013 Exceptions. Ez tax form 2013   The excise tax does not apply if excess contributions made during 2013 (and any earnings on them) are distributed before the first day of the sixth month of the following tax year (June 1, 2014, for a calendar year taxpayer). Ez tax form 2013   However, you must include the distributed earnings in gross income for the year in which the excess contribution was made. Ez tax form 2013 You should receive Form 1099-Q, Payments From Qualified Education Programs, from each institution from which excess contributions were distributed. Ez tax form 2013 Box 2 of that form will show the amount of earnings on your excess contributions. Ez tax form 2013 Code “2” or “3” entered in the blank box below boxes 5 and 6 indicate the year in which the earnings are taxable. Ez tax form 2013 See Instructions for Recipient on the back of copy B of your Form 1099-Q. Ez tax form 2013 Enter the amount of earnings on line 21 of Form 1040 (or Form 1040NR) for the applicable tax year. Ez tax form 2013 For more information, see Taxable Distributions , later. Ez tax form 2013   The excise tax does not apply to any rollover contribution. Ez tax form 2013 Note. Ez tax form 2013 Contributions made in one year for the preceding tax year are considered to have been made on the last day of the preceding year. Ez tax form 2013 Example. Ez tax form 2013 In 2012, Greta's parents and grandparents contributed a total of $2,300 to Greta's Coverdell ESA— an excess contribution of $300. Ez tax form 2013 Because Greta did not withdraw the excess before June 1, 2013, she had to pay an additional tax of $18 (6% × $300) when she filed her 2012 tax return. Ez tax form 2013 In 2013, excess contributions of $500 were made to Greta's account, however, she withdrew $250 from that account to use for qualified education expenses. Ez tax form 2013 Using the steps shown earlier under Additional Tax on Excess Contributions , Greta figures the excess contribution in her account at the end of 2013 as follows. Ez tax form 2013 (1)   $500 excess contributions made in 2013     + (2)   $300 excess contributions in ESA at end of 2012     − (2a)   $250 distribution during 2013         $550 excess at end of 2013   × 6%=$33           If Greta limits 2014 contributions to $1,450 ($2,000 maximum allowed − $550 excess contributions from 2013), she will not owe any additional tax in 2014 for excess contributions. Ez tax form 2013 Figuring and reporting the additional tax. Ez tax form 2013   You figure this excise tax in Part V of Form 5329. Ez tax form 2013 Report the additional tax on Form 1040, line 58 (or Form 1040NR, line 56). Ez tax form 2013 Rollovers and Other Transfers Assets can be rolled over from one Coverdell ESA to another or the designated beneficiary can be changed. Ez tax form 2013 The beneficiary's interest can be transferred to a spouse or former spouse because of divorce. Ez tax form 2013 Rollovers Any amount distributed from a Coverdell ESA is not taxable if it is rolled over to another Coverdell ESA for the benefit of the same beneficiary or a member of the beneficiary's family (including the beneficiary's spouse) who is under age 30. Ez tax form 2013 This age limitation does not apply if the new beneficiary is a special needs beneficiary. Ez tax form 2013 An amount is rolled over if it is paid to another Coverdell ESA within 60 days after the date of the distribution. Ez tax form 2013 Do not report qualifying rollovers (those that meet the above criteria) anywhere on Form 1040 or 1040NR. Ez tax form 2013 These are not taxable distributions. Ez tax form 2013 Members of the beneficiary's family. Ez tax form 2013   For these purposes, the beneficiary's family includes the beneficiary's spouse and the following other relatives of the beneficiary. Ez tax form 2013 Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them. Ez tax form 2013 Brother, sister, stepbrother, or stepsister. Ez tax form 2013 Father or mother or ancestor of either. Ez tax form 2013 Stepfather or stepmother. Ez tax form 2013 Son or daughter of a brother or sister. Ez tax form 2013 Brother or sister of father or mother. Ez tax form 2013 Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. Ez tax form 2013 The spouse of any individual listed above. Ez tax form 2013 First cousin. Ez tax form 2013 Example. Ez tax form 2013 When Aaron graduated from college last year he had $5,000 left in his Coverdell ESA. Ez tax form 2013 He wanted to give this money to his younger sister, who was still in high school. Ez tax form 2013 In order to avoid paying tax on the distribution of the amount remaining in his account, Aaron contributed the same amount to his sister's Coverdell ESA within 60 days of the distribution. Ez tax form 2013 Only one rollover per Coverdell ESA is allowed during the 12-month period ending on the date of the payment or distribution. Ez tax form 2013 This rule does not apply to the rollover of a military death gratuity or payment from Servicemembers' Group Life Insurance (SGLI). Ez tax form 2013 Military death gratuity. Ez tax form 2013   If you received a military death gratuity or a payment from Servicemembers' Group Life Insurance (SGLI), you may roll over all or part of the amount received to one or more Coverdell ESAs for the benefit of members of the beneficiary's family (see Members of the beneficiary's family , earlier). Ez tax form 2013 Such payments are made to an eligible survivor upon the death of a member of the armed forces. Ez tax form 2013 The contribution to a Coverdell ESA from survivor benefits received cannot be made later than 1 year after the date on which you receive the gratuity or SGLI payment. Ez tax form 2013   This rollover contribution is not subject to (but is in addition to) the contribution limits discussed earlier under Contribution Limits . Ez tax form 2013 The amount you roll over cannot exceed the total survivor benefits you received, reduced by contributions from these benefits to a Roth IRA or other Coverdell ESAs. Ez tax form 2013   The amount contributed from the survivor benefits is treated as part of your basis (cost) in the Coverdell ESA, and will not be taxed when distributed. Ez tax form 2013 See Distributions , later. Ez tax form 2013 The limit of one rollover per Coverdell ESA during a 12-month period does not apply to a military death gratuity or SGLI payment. Ez tax form 2013 Changing the Designated Beneficiary The designated beneficiary can be changed. Ez tax form 2013 See Members of the beneficiary's family , earlier. Ez tax form 2013 There are no tax consequences if, at the time of the change, the new beneficiary is under age 30 or is a special needs beneficiary. Ez tax form 2013 Example. Ez tax form 2013 Assume the same situation for Aaron as in the last example (see Rollovers , earlier). Ez tax form 2013 Instead of closing his Coverdell ESA and paying the distribution into his sister's Coverdell ESA, Aaron could have instructed the trustee of his account to simply change the name of the beneficiary on his account to that of his sister. Ez tax form 2013 Transfer Because of Divorce If a spouse or former spouse receives a Coverdell ESA under a divorce or separation instrument, it is not a taxable transfer. Ez tax form 2013 After the transfer, the spouse or former spouse treats the Coverdell ESA as his or her own. Ez tax form 2013 Example. Ez tax form 2013 In their divorce settlement, Peg received her ex-husband's Coverdell ESA. Ez tax form 2013 In this process, the account was transferred into her name. Ez tax form 2013 Peg now treats the funds in this Coverdell ESA as if she were the original owner. Ez tax form 2013 Distributions The designated beneficiary of a Coverdell ESA can take a distribution at any time. Ez tax form 2013 Whether the distributions are tax free depends, in part, on whether the distributions are equal to or less than the amount of Adjusted qualified education expenses (defined later) that the beneficiary has in the same tax year. Ez tax form 2013 See Table 7-3, Coverdell ESA Distributions at a Glance, for highlights. Ez tax form 2013 Table 7-3. Ez tax form 2013 Coverdell ESA Distributions at a Glance Do not rely on this table alone. Ez tax form 2013 It provides only general highlights. Ez tax form 2013 See the text for definitions of terms in bold type and for more complete explanations. Ez tax form 2013 Question Answer Is a distribution from a Coverdell ESA to pay for a designated beneficiary's qualified education expenses tax free? Generally, yes, to the extent the amount of the distribution is not more than the designated beneficiary's adjusted qualified education expenses. Ez tax form 2013 After the designated beneficiary completes his or her education at an eligible educational institution, can amounts remaining in the Coverdell ESA be distributed? Yes. Ez tax form 2013 Amounts must be distributed when the designated beneficiary reaches age 30, unless he or she is a special needs beneficiary. Ez tax form 2013 Also, certain transfers to members of the beneficiary's family are permitted. Ez tax form 2013 Does the designated beneficiary need to be enrolled for a minimum number of courses to take a tax-free distribution? No. Ez tax form 2013 Adjusted qualified education expenses. Ez tax form 2013   To determine if total distributions for the year are more than the amount of qualified education expenses, reduce total qualified education expenses by any tax-free educational assistance. Ez tax form 2013 Tax-free educational assistance includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Ez tax form 2013 The amount you get by subtracting tax-free educational assistance from your total qualified education expenses is your adjusted qualified education expenses. Ez tax form 2013 Tax-Free Distributions Generally, distributions are tax free if they are not more than the beneficiary's adjusted qualified education expenses for the year. Ez tax form 2013 Do not report tax-free distributions (including qualifying rollovers) on your tax return. Ez tax form 2013 Taxable Distributions A portion of the distributions is generally taxable to the beneficiary if the total distributions are more than the beneficiary's adjusted qualified education expenses for the year. Ez tax form 2013 Excess distribution. Ez tax form 2013   This is the part of the total distribution that is more than the beneficiary's adjusted qualified education expenses for the year. Ez tax form 2013 Earnings and basis. Ez tax form 2013   You will receive a Form 1099-Q for each of the Coverdell ESAs from which money was distributed in 2013. Ez tax form 2013 The amount of your gross distribution will be shown in box 1. Ez tax form 2013 For 2013, instead of dividing the gross distribution between your earnings (box 2) and your basis (already-taxed amount) (box 3), the payer or trustee may report the fair market value (account balance) of the Coverdell ESA as of December 31, 2013. Ez tax form 2013 This will be shown in the blank box below boxes 5 and 6. Ez tax form 2013   The amount contributed from survivor benefits (see Military death gratuity , earlier) is treated as part of your basis and will not be taxed when distributed. Ez tax form 2013 Figuring the Taxable Portion of a Distribution The taxable portion is the amount of the excess distribution that represents earnings that have accumulated tax free in the account. Ez tax form 2013 Figure the taxable portion for 2013 as shown in the following steps. Ez tax form 2013 Multiply the total amount distributed by a fraction. Ez tax form 2013 The numerator is the basis (contributions not previously distributed) at the end of 2012 plus total contributions for 2013 and the denominator is the value (balance) of the account at the end of 2013 plus the amount distributed during 2013. Ez tax form 2013 Subtract the amount figured in (1) from the total amount distributed during 2013. Ez tax form 2013 The result is the amount of earnings included in the distribution(s). Ez tax form 2013 Multiply the amount of earnings figured in (2) by a fraction. Ez tax form 2013 The numerator is the adjusted qualified education expenses paid during 2013 and the denominator is the total amount distributed during 2013. Ez tax form 2013 Subtract the amount figured in (3) from the amount figured in (2). Ez tax form 2013 The result is the amount the beneficiary must include in income. Ez tax form 2013 The taxable amount must be reported on Form 1040 or Form 1040NR, line 21. Ez tax form 2013 Example. Ez tax form 2013 You received an $850 distribution from your Coverdell ESA, to which $1,500 had been contributed before 2013. Ez tax form 2013 There were no contributions in 2013. Ez tax form 2013 This is your first distribution from the account, so your basis in the account on December 31, 2012, was $1,500. Ez tax form 2013 The value (balance) of your account on December 31, 2013, was $950. Ez tax form 2013 You had $700 of adjusted qualified education expenses (AQEE) for the year. Ez tax form 2013 Using the steps in Figuring the Taxable Portion of a Distribution , earlier, figure the taxable portion of your distribution as follows. Ez tax form 2013   1. Ez tax form 2013 $850 (distribution) × $1,500 basis + $0 contributions  $950 value + $850 distribution       =$708 (basis portion of distribution)     2. Ez tax form 2013 $850 (distribution)−$708 (basis portion of distribution)     =$142 (earnings included in distribution)   3. Ez tax form 2013 $142 (earnings) × $700 AQEE  $850 distribution           =$117 (tax-free earnings)     4. Ez tax form 2013 $142 (earnings)−$117 (tax-free earnings)=$25 (taxable earnings)                 You must include $25 in income as distributed earnings not used for qualified education expenses. Ez tax form 2013 Report this amount on Form 1040, line 21, listing the type and amount of income on the dotted line. Ez tax form 2013 Worksheet 7-3, Coverdell ESA–Taxable Distributions and Basis , at the end of this chapter, can help you figure your adjusted qualified education expenses, how much of your distribution must be included in income, and the remaining basis in your Coverdell ESA(s). Ez tax form 2013 Coordination With American Opportunity and Lifetime Learning Credits The American opportunity or lifetime learning credit can be claimed in the same year the beneficiary takes a tax-free distribution from a Coverdell ESA, as long as the same expenses are not used for both benefits. Ez tax form 2013 This means the beneficiary must reduce qualified higher education expenses by tax-free educational assistance, and then further reduce them by any expenses taken into account in determining an American opportunity or lifetime learning credit. Ez tax form 2013 Example. Ez tax form 2013 Derek Green had $5,800 of qualified higher education expenses for 2013, his first year in college. Ez tax form 2013 He paid his college expenses from the following sources. Ez tax form 2013     Partial tuition scholarship (tax free) $1,500     Coverdell ESA distribution 1,000     Gift from parents 2,100     Earnings from part-time job 1,200           Of his $5,800 of qualified higher education expenses, $4,000 was tuition and related expenses that also qualified for an American opportunity credit. Ez tax form 2013 Derek's parents claimed a $2,500 American opportunity credit (based on $4,000 expenses) on their tax return. Ez tax form 2013 Before Derek can determine the taxable portion of his Coverdell ESA distribution, he must reduce his total qualified higher education expenses. Ez tax form 2013     Total qualified higher education expenses $5,800     Minus: Tax-free educational assistance −1,500     Minus: Expenses taken into account in  figuring American opportunity credit − 4,000     Equals: Adjusted qualified higher education  expenses (AQHEE) $ 300           Since the adjusted qualified higher education expenses ($300) are less than the Coverdell ESA distribution ($1,000), part of the distribution will be taxable. Ez tax form 2013 The balance in Derek's account was $1,800 on December 31, 2013. Ez tax form 2013 Prior to 2013, $2,100 had been contributed to this account. Ez tax form 2013 Contributions for 2013 totaled $400. Ez tax form 2013 Using the four steps outlined earlier, Derek figures the taxable portion of his distribution as shown below. Ez tax form 2013   1. Ez tax form 2013 $1,000 (distribution) × $2,100 basis + $400 contributions  $1,800 value + $1,000 distribution           =$893 (basis portion of distribution)     2. Ez tax form 2013 $1,000 (distribution)−$893 (basis portion of distribution)     = $107 (earnings included in distribution)   3. Ez tax form 2013 $107 (earnings) × $300 AQHEE  $1,000 distribution       =$32 (tax-free earnings)     4. Ez tax form 2013 $107 (earnings)−$32 (tax-free earnings)=$75 (taxable earnings)                 Derek must include $75 in income (Form 1040, line 21). Ez tax form 2013 This is the amount of distributed earnings not used for adjusted qualified higher education expenses. Ez tax form 2013 Coordination With Qualified Tuition Program (QTP) Distributions If a designated beneficiary receives distributions from both a Coverdell ESA and a QTP in the same year, and the total distribution is more than the beneficiary's adjusted qualified higher education expenses, those expenses must be allocated between the distribution from the Coverdell ESA and the distribution from the QTP before figuring how much of each distribution is taxable. Ez tax form 2013 The following two examples illustrate possible allocations. Ez tax form 2013 Example 1. Ez tax form 2013 In 2013, Beatrice graduated from high school and began her first semester of college. Ez tax form 2013 That year, she had $1,000 of qualified elementary and secondary education expenses (QESEE) for high school and $3,000 of qualified higher education expenses (QHEE) for college. Ez tax form 2013 To pay these expenses, Beatrice withdrew $800 from her Coverdell ESA and $4,200 from her QTP. Ez tax form 2013 No one claimed Beatrice as a dependent, nor was she eligible for an education credit. Ez tax form 2013 She did not receive any tax-free educational assistance in 2013. Ez tax form 2013 Beatrice must allocate her total qualified education expenses between the two distributions. Ez tax form 2013 Beatrice knows that tax-free treatment will be available if she applies her $800 Coverdell ESA distribution toward her $1,000 of qualified education expenses for high school. Ez tax form 2013 The qualified expenses are greater than the distribution, making the $800 Coverdell ESA distribution tax free. Ez tax form 2013 Next, Beatrice matches her $4,200 QTP distribution to her $3,000 of QHEE, and finds she has an excess QTP distribution of $1,200 ($4,200 QTP − $3,000 QHEE). Ez tax form 2013 She cannot use the extra $200 of high school expenses (from (1) above) against the QTP distribution because those expenses do not qualify a QTP for tax-free treatment. Ez tax form 2013 Finally, Beatrice figures the taxable and tax-free portions of her QTP distribution based on her $3,000 of QHEE. Ez tax form 2013 (See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program for more information. Ez tax form 2013 ) Example 2. Ez tax form 2013 Assume the same facts as in Example 1 , except that Beatrice withdrew $1,800 from her Coverdell ESA and $3,200 from her QTP. Ez tax form 2013 In this case, she allocates her qualified education expenses as follows. Ez tax form 2013 Using the same reasoning as in Example 1, Beatrice matches $1,000 of her Coverdell ESA distribution to her $1,000 of QESEE—she has $800 of her distribution remaining. Ez tax form 2013 Because higher education expenses can also qualify a Coverdell ESA distribution for tax-free treatment, Beatrice allocates her $3,000 of QHEE between the remaining $800 Coverdell ESA and the $3,200 QTP distributions ($4,000 total). Ez tax form 2013   $3,000 QHEE × $800 ESA distribution  $4,000 total distribution = $600 QHEE (ESA)     $3,000 QHEE × $3,200 QTP distribution  $4,000 total distribution = $2,400 QHEE (QTP)   Beatrice then figures the taxable part of her: Coverdell ESA distribution based on qualified education expenses of $1,600 ($1,000 QESEE + $600 QHEE). Ez tax form 2013 See Figuring the Taxable Portion of a Distribution , earlier, in this chapter. Ez tax form 2013   QTP distribution based on her $2,400 of QHEE (see Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program). Ez tax form 2013 The above examples show two types of allocation between distributions from a Coverdell ESA and a QTP. Ez tax form 2013 However, you do not have to allocate your expenses in the same way. Ez tax form 2013 You can use any reasonable method. Ez tax form 2013 Losses on Coverdell ESA Investments If you have a loss on your investment in a Coverdell ESA, you may be able to deduct the loss on your income tax return. Ez tax form 2013 You can deduct the loss only when all amounts from that account have been distributed and the total distributions are less than your unrecovered basis. Ez tax form 2013 Your basis is the total amount of contributions to that Coverdell ESA. Ez tax form 2013 You claim the loss as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23 (Schedule A (Form 1040NR), line 9), subject to the 2%-of-adjusted-gross-income limit. Ez tax form 2013 If you have distributions from more than one Coverdell ESA account during a year, you must combine the information (amount of distribution, basis, etc. Ez tax form 2013 ) from all such accounts in order to determine your taxable earnings for the year. Ez tax form 2013 By doing this, the loss from one ESA account reduces the distributed earnings (if any) from any other ESA account. Ez tax form 2013 For examples of the calculation, see Losses on QTP Investments in chapter 8, Qualified Tuition Program. Ez tax form 2013 Additional Tax on Taxable Distributions Generally, if you receive a taxable distribution, you also must pay a 10% additional tax on the amount included in income. Ez tax form 2013 Exceptions. Ez tax form 2013   The 10% additional tax does not apply to distributions: Paid to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary. Ez tax form 2013 Made because the designated beneficiary is disabled. Ez tax form 2013 A person is considered to be disabled if he or she shows proof that he or she cannot do any substantial gainful activity because of his or her physical or mental condition. Ez tax form 2013 A physician must determine that his or her condition can be expected to result in death or to be of long-continued and indefinite duration. Ez tax form 2013 Included in income because the designated beneficiary received: A tax-free scholarship or fellowship (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), or Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Ez tax form 2013 Made on account of the attendance of the designated beneficiary at a U. Ez tax form 2013 S. Ez tax form 2013 military academy (such as the USMA at West Point). Ez tax form 2013 This exception applies only to the extent that the amount of the distribution does not exceed the costs of advanced education (as defined in section 2005(d)(3) of title 10 of the U. Ez tax form 2013 S. Ez tax form 2013 Code) attributable to such attendance. Ez tax form 2013 Included in income only because the qualified education expenses were taken into account in determining the American opportunity or lifetime learning credit (see Coordination With American Opportunity and Lifetime Learning Credits , earlier). Ez tax form 2013 Made before June 1, 2014, of an excess 2013 contribution (and any earnings on it). Ez tax form 2013 The distributed earnings must be included in gross income for the year in which the excess contribution was made. Ez tax form 2013 Exception (3) applies only to the extent the distribution is not more than the scholarship, allowance, or payment. Ez tax form 2013 Figuring the additional tax. Ez tax form 2013    Use Part II of Form 5329, to figure any additional tax. Ez tax form 2013 Report the amount on Form 1040, line 58, or Form 1040NR, line 56. Ez tax form 2013 When Assets Must Be Distributed Any assets remaining in a Coverdell ESA must be distributed when either one of the following two events occurs. Ez tax form 2013 The designated beneficiary reaches age 30. Ez tax form 2013 In this case, the remaining assets must be distributed within 30 days after the beneficiary reaches age 30. Ez tax form 2013 However, this rule does not apply if the beneficiary is a special needs beneficiary. Ez tax form 2013 The designated beneficiary dies before reaching age 30. Ez tax form 2013 In this case, the remaining assets must generally be distributed within 30 days after the date of death. Ez tax form 2013 Exception for Transfer to Surviving Spouse or Family Member If a Coverdell ESA is transferred to a surviving spouse or other family member as the result of the death of the designated beneficiary, the Coverdell ESA retains its status. Ez tax form 2013 (“Family member” was defined earlier under Rollovers . Ez tax form 2013 ) This means the spouse or other family member can treat the Coverdell ESA as his or her own and does not need to withdraw the assets until he or she reaches age 30. Ez tax form 2013 This age limitation does not apply if the new beneficiary is a special needs beneficiary. Ez tax form 2013 There are no tax consequences as a result of the transfer. Ez tax form 2013 How To Figure the Taxable Earnings When a total distribution is made because the designated beneficiary either reached age 30 or died, the earnings that accumulated tax free in the account must be included in taxable income. Ez tax form 2013 You determine these earnings as shown in the following two steps. Ez tax form 2013 Multiply the amount distributed by a fraction. Ez tax form 2013 The numerator is the basis (contributions not previously distributed) at the end of 2012 plus total contributions for 2013 and the denominator is the balance in the account at the end of 2013 plus the amount distributed during 2013. Ez tax form 2013 Subtract the amount figured in (1) from the total amount distributed during 2013. Ez tax form 2013 The result is the amount of earnings included in the distribution. Ez tax form 2013 For an example, see steps (1) and (2) of the Example under Figuring the Taxable Portion of a Distribution, earlier. Ez tax form 2013 The beneficiary or other person receiving the distribution must report this amount on Form 1040, line 21, or Form 1040NR, line 21, listing the type and amount of income on the dotted line. Ez tax form 2013 Worksheet 7-3 Instructions. Ez tax form 2013 Coverdell ESA—Taxable Distributions and Basis Line G. Ez tax form 2013 Enter the total distributions received from all Coverdell ESAs during 2013. Ez tax form 2013 Do not include amounts rolled over to another ESA within 60 days (only one rollover is allowed during any 12-month period). Ez tax form 2013 Also, do not include excess contributions that were distributed with the related earnings (or less any loss) before the first day of the sixth month of the tax year following the year for which the contributions were made. Ez tax form 2013 Line 2. Ez tax form 2013 Your basis (amount already taxed) in this Coverdell ESA as of December 31, 2012, is the total of:   •All contributions to this Coverdell ESA before 2013 •Minus the tax-free portion of any distributions from this Coverdell ESA before 2013. Ez tax form 2013   If your last distribution from this Coverdell ESA was before 2013, you must start with the basis in your account as of the end of the last year in which you took a distribution. Ez tax form 2013 For years before 2002, you can find that amount on the last line of the worksheet in the Instructions for Form 8606, Nondeductible IRAs, that you completed for that year. Ez tax form 2013 For years after 2001, you can find that amount by using the ending basis from the worksheet in Publication 970 for that year. Ez tax form 2013 You can determine your basis in this Coverdell ESA as of December 31, 2012, by adding to the basis as of the end of that year any contributions made to that account after the year of the distribution and before 2013. Ez tax form 2013 Line 4. Ez tax form 2013 Enter the total distributions received from this Coverdell ESA in 2013. Ez tax form 2013 Do not include amounts rolled over to another Coverdell ESA within 60 days (only one rollover is allowed during any 12-month period). Ez tax form 2013   Also, do not include excess contributions that were distributed with the related earnings (or less any loss) before the first day of the sixth month of the tax year following the year of the contributions. Ez tax form 2013 Line 7. Ez tax form 2013 Enter the total value of this Coverdell ESA as of December 31, 2013, plus any outstanding rollovers contributed to the account after 2012, but before the end of the 60-day rollover period. Ez tax form 2013 A statement should be sent to you by January 31, 2014, for this Coverdell ESA showing the value on December 31, 2013. Ez tax form 2013   A rollover is a tax-free withdrawal from one Coverdell ESA that is contributed to another Coverdell ESA. Ez tax form 2013 An outstanding rollover is any amount withdrawn within 60 days before the end of 2013 (November 2 through December 31) that was rolled over after December 31, 2013, but within the 60-day rollover period. Ez tax form 2013 Worksheet 7-3. Ez tax form 2013 Coverdell ESA—Taxable Distributions and Basis How to complete this worksheet. Ez tax form 2013 • • • Complete Part I, lines A through H, on only one worksheet. Ez tax form 2013  Complete a separate Part II, lines 1 through 15, for each of your Coverdell ESAs. Ez tax form 2013  Complete Part III, the Summary (line 16), on only one worksheet. Ez tax form 2013 Part I. Ez tax form 2013 Qualified Education Expenses (Complete for total expenses)       A. Ez tax form 2013 Enter your total qualified education expenses for 2013   A. Ez tax form 2013   B. Ez tax form 2013 Enter those qualified education expenses paid for with tax-free educational assistance (for example, tax-free scholarships, veterans' educational benefits, Pell grants, employer-provided educational assistance)   B. Ez tax form 2013         C. Ez tax form 2013 Enter those qualified higher education expenses deducted on Schedule C or C-EZ (Form 1040). Ez tax form 2013 Schedule F (Form 1040), or as a miscellaneous itemized deduction on Schedule A (Form 1040 or 1040NR)   C. Ez tax form 2013         D. Ez tax form 2013 Enter those qualified higher education expenses on which  an American opportunity or lifetime learning credit was based   D. Ez tax form 2013         E. Ez tax form 2013 Add lines B, C, and D   D. Ez tax form 2013   F. Ez tax form 2013 Subtract line E from line A. Ez tax form 2013 This is your adjusted qualified education expense for 2013   E. Ez tax form 2013   G. Ez tax form 2013 Enter your total distributions from all Coverdell ESAs during 2013. Ez tax form 2013 Do not include rollovers  or the return of excess contributions (see instructions)   F. Ez tax form 2013   H. Ez tax form 2013 Divide line F by line G. Ez tax form 2013 Enter the result as a decimal (rounded to at least 3 places). Ez tax form 2013 If the  result is 1. Ez tax form 2013 000 or more, enter 1. Ez tax form 2013 000   G. Ez tax form 2013 . Ez tax form 2013 Part II. Ez tax form 2013 Taxable Distributions and Basis (Complete separately for each account) 1. Ez tax form 2013 Enter the amount contributed to this Coverdell ESA for 2013, including contributions made for 2013 from January 1, 2014, through April 15, 2014. Ez tax form 2013 Do not include rollovers or the return of excess contributions   1. Ez tax form 2013   2. Ez tax form 2013 Enter your basis in this Coverdell ESA as of December 31, 2012 (see instructions)   2. Ez tax form 2013   3. Ez tax form 2013 Add lines 1 and 2   3. Ez tax form 2013   4. Ez tax form 2013 Enter the total distributions from this Coverdell ESA during 2013. Ez tax form 2013 Do not include rollovers  or the return of excess contributions (see instructions)   4. Ez tax form 2013   5. Ez tax form 2013 Multiply line 4 by line H. Ez tax form 2013 This is the amount of adjusted qualified  education expense attributable to this Coverdell ESA   5. Ez tax form 2013         6. Ez tax form 2013 Subtract line 5 from line 4   6. Ez tax form 2013         7. Ez tax form 2013 Enter the total value of this Coverdell ESA as of December 31, 2013,  plus any outstanding rollovers (see instructions)   7. Ez tax form 2013         8. Ez tax form 2013 Add lines 4 and 7   8. Ez tax form 2013         9. Ez tax form 2013 Divide line 3 by line 8. Ez tax form 2013 Enter the result as a decimal (rounded to  at least 3 places). Ez tax form 2013 If the result is 1. Ez tax form 2013 000 or more, enter 1. Ez tax form 2013 000   9. Ez tax form 2013 . Ez tax form 2013       10. Ez tax form 2013 Multiply line 4 by line 9. Ez tax form 2013 This is the amount of basis allocated to your  distributions, and is tax free   10. Ez tax form 2013     Note. Ez tax form 2013 If line 6 is zero, skip lines 11 through 13, enter -0- on line 14, and go to line 15. Ez tax form 2013       11. Ez tax form 2013 Subtract line 10 from line 4   11. Ez tax form 2013   12. Ez tax form 2013 Divide line 5 by line 4. Ez tax form 2013 Enter the result as a decimal (rounded to  at least 3 places). Ez tax form 2013 If the result is 1. Ez tax form 2013 000 or more, enter 1. Ez tax form 2013 000   12. Ez tax form 2013 . Ez tax form 2013       13. Ez tax form 2013 Multiply line 11 by line 12. Ez tax form 2013 This is the amount of qualified education  expenses allocated to your distributions, and is tax free   13. Ez tax form 2013   14. Ez tax form 2013 Subtract line 13 from line 11. Ez tax form 2013 This is the portion of the distributions from this  Coverdell ESA in 2013 that you must include in income   14. Ez tax form 2013   15. Ez tax form 2013 Subtract line 10 from line 3. Ez tax form 2013 This is your basis in this Coverdell ESA as of December 31, 2013   15. Ez tax form 2013   Part III. Ez tax form 2013 Summary (Complete only once)       16. Ez tax form 2013 Taxable amount. Ez tax form 2013 Add together all amounts on line 14 for all your Coverdell ESAs. Ez tax form 2013 Enter here  and include on Form 1040, line 21, or Form 1040NR, line 21, listing the type and amount of income on the dotted line   16. Ez tax form 2013   Prev  Up  Next   Home   More Online Publications