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State Tax Efile

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State Tax Efile

State tax efile 4. State tax efile   Deductions Table of Contents Standard DeductionStandard Deduction for Dependents Itemized DeductionsMedical and Dental Expenses Most taxpayers have a choice of taking a standard deduction or itemizing their deductions. State tax efile You benefit from the standard deduction if your standard deduction is more than the total of your allowable itemized deductions. State tax efile If you have a choice, you should use the method that gives you the lower tax. State tax efile Standard Deduction The standard deduction amount depends on your filing status, whether you are 65 or older or blind, and whether an exemption can be claimed for you by another taxpayer. State tax efile Generally, the standard deduction amounts are adjusted each year for inflation. State tax efile In most cases, you can use Worksheet 4-1 to figure your standard deduction amount. State tax efile Persons not eligible for the standard deduction. State tax efile   Your standard deduction is zero and you should itemize any deductions you have if: You are married and filing a separate return, and your spouse itemizes deductions, You are filing a tax return for a short tax year because of a change in your annual accounting period, or You are a nonresident or dual-status alien during the year. State tax efile You are considered a dual-status alien if you were both a nonresident alien and a resident alien during the year. State tax efile   If you are a nonresident alien who is married to a U. State tax efile S. State tax efile citizen or resident alien at the end of the year, you can choose to be treated as a U. State tax efile S. State tax efile resident. State tax efile See Publication 519, U. State tax efile S. State tax efile Tax Guide for Aliens. State tax efile If you make this choice, you can take the standard deduction. State tax efile Decedent's final return. State tax efile   The amount of the standard deduction for a decedent's final tax return is the same as it would have been had the decedent continued to live. State tax efile However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age cannot be claimed. State tax efile Higher standard deduction for age (65 or older). State tax efile   If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. State tax efile You are considered age 65 on the day before your 65th birthday. State tax efile Therefore, you can take a higher standard deduction for 2013 if you were born before January 2, 1949. State tax efile Higher standard deduction for blindness. State tax efile   If you are blind on the last day of the year and you do not itemize deductions, you are entitled to a higher standard deduction. State tax efile You qualify for this benefit if you are totally or partly blind. State tax efile Not totally blind. State tax efile   If you are not totally blind, you must get a certified statement from an eye doctor (ophthalmologist or optometrist) that: You cannot see better than 20/200 in the better eye with glasses or contact lenses, or Your field of vision is not more than 20 degrees. State tax efile   If your eye condition will never improve beyond these limits, the statement should include this fact. State tax efile You must keep the statement in your records. State tax efile   If your vision can be corrected beyond these limits only by contact lenses that you can wear only briefly because of pain, infection, or ulcers, you can take the higher standard deduction for blindness if you otherwise qualify. State tax efile Spouse 65 or older or blind. State tax efile   You can take the higher standard deduction if your spouse is age 65 or older or blind and: You file a joint return, or You file a separate return and can claim an exemption for your spouse because your spouse had no gross income and an exemption for your spouse could not be claimed by another taxpayer. State tax efile    You cannot claim the higher standard deduction for an individual other than yourself and your spouse. State tax efile Example. State tax efile This example illustrates how to determine your standard deduction using Worksheet 4-1. State tax efile Bill and Lisa are filing a joint return for 2013. State tax efile Both are over age 65. State tax efile Neither is blind, and neither can be claimed as a dependent. State tax efile They do not itemize deductions, so they use Worksheet 4-1. State tax efile Because they are married filing jointly, they enter $12,200 on line 1. State tax efile They check the “No” box on line 2, so they also enter $12,200 on line 4. State tax efile Because they are both over age 65, they enter $2,400 ($1,200 × 2) on line 5. State tax efile They enter $14,600 ($12,200 + $2,400) on line 6, so their standard deduction is $14,600. State tax efile Standard Deduction for Dependents The standard deduction for an individual for whom an exemption can be claimed on another person's tax return is generally limited to the greater of: $1,000, or The individual's earned income for the year plus $350 (but not more than the regular standard deduction amount, generally $6,100). State tax efile However, the standard deduction may be higher if the individual is 65 or older or blind. State tax efile If an exemption for you (or your spouse if you are filing jointly) can be claimed on someone else's return, use Worksheet 4-1, if applicable, to determine your standard deduction. State tax efile Worksheet 4-1. State tax efile 2013 Standard Deduction Worksheet Caution. State tax efile If you are married filing separately and your spouse itemizes deductions, or if you are a dual-status alien, do not complete this worksheet. State tax efile If you were born before January 2, 1949, and/or blind, check the correct number of boxes below. State tax efile Put the total number of boxes checked in box c and go to line 1. State tax efile a. State tax efile You   Born before  January 2, 1949     Blind b. State tax efile Your spouse, if claiming  spouse's exemption   Born before January 2, 1949     Blind c. State tax efile Total boxes checked             1. State tax efile Enter the amount shown below for your filing status. State tax efile               Single or married filing separately — $6,100 Married filing jointly or Qualifying widow(er) — $12,200 Head of household — $8,950   1. State tax efile           2. State tax efile Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's return?  No. State tax efile Skip line 3; enter the amount from line 1 on line 4. State tax efile   Yes. State tax efile Go to line 3. State tax efile         3. State tax efile Is your earned income* more than $650?               Yes. State tax efile Add $350 to your earned income. State tax efile Enter the total   3. State tax efile         No. State tax efile Enter $1,000 4. State tax efile Enter the smaller of line 1 or line 3 4. State tax efile   5. State tax efile If born before January 2, 1949, or blind, multiply the number in box c by $1,200 ($1,500 if single or head of household). State tax efile Enter the result here. State tax efile Otherwise, enter -0- 5. State tax efile   6. State tax efile Add lines 4 and 5. State tax efile This is your standard deduction for 2013. State tax efile 6. State tax efile   * Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. State tax efile It also includes any amount received as a scholarship that you must include in your income. State tax efile Generally, your earned income is the total of the amount(s) you reported on Form 1040, lines 7, 12, and 18, minus the amount, if any, on line 27 (or the amount you reported on Form 1040A, line 7). State tax efile Itemized Deductions Some individuals should itemize their deductions because it will save them money. State tax efile Others should itemize because they do not qualify for the standard deduction. State tax efile See the discussion under Standard Deduction , earlier, to decide if it would be to your advantage to itemize deductions. State tax efile You may be subject to a limit on some of your itemized deductions if your adjusted gross income is more than $150,000. State tax efile For more information, see Overall limitation, later. State tax efile Medical and dental expenses, some taxes, certain interest expenses, charitable contributions, casualty and theft losses, and certain other miscellaneous expenses may be itemized as deductions on Schedule A (Form 1040). State tax efile You may benefit from itemizing your deductions on Schedule A (Form 1040) if you: Cannot take the standard deduction, Had uninsured medical or dental expenses that are more than 10% of your adjusted gross income (or more than 7. State tax efile 5% of your adjusted gross income if either you or your spouse is age 65 or older), Paid interest on your home, Paid real estate or personal property taxes, Paid mortgage insurance premiums, Paid state and local income or general sales taxes, Had large unreimbursed employee business expenses or other miscellaneous deductions, Had large uninsured casualty or theft losses, Made large contributions to qualified charities (see Publication 526, Charitable Contributions), or Have total itemized deductions that are more than the standard deduction that applies to you. State tax efile See the Schedule A (Form 1040) instructions for more information. State tax efile Overall limitation. State tax efile   You may not be able to deduct all of your itemized deductions if your adjusted gross income is more than: $150,000, if married filing separately, $250,000, if single, $275,000, if head of household, or $300,000, if married filing jointly or qualifying widow(er). State tax efile  If your adjusted gross income exceeds the applicable amount, you will use the Itemized Deductions Worksheet in the Instructions for Schedule A (Form 1040) to figure your total itemized deductions. State tax efile Medical and Dental Expenses You can deduct certain medical and dental expenses you paid for yourself, your spouse, and your dependent(s) if you itemize your deductions on Schedule A (Form 1040). State tax efile Table 4-1 shows some common items that you can or cannot include in figuring your medical expense deduction. State tax efile For more information, see the following discussions of selected items, which are presented in alphabetical order. State tax efile A more extensive list of items and further details can be found in Publication 502, Medical and Dental Expenses. State tax efile Table 4-1. State tax efile Medical and Dental Expenses Checklist You can include: You cannot include: Bandages Capital expenses for equipment or improvements to your home needed for medical care (see Publication 502) Certain weight-loss expenses for obesity Diagnostic devices Expenses of an organ donor Eye surgery—to promote the correct function of the eye Guide dogs or other animals aiding the blind, deaf, and disabled Hospital services fees (lab work, therapy, nursing services, surgery, etc. State tax efile ) Lead-based paint removal (see Publication 502) Long-term care contracts, qualified (see Publication 502) Meals and lodging provided by a hospital during medical treatment Medical and hospital insurance premiums Medical services fees (from doctors, dentists, surgeons, specialists, and other medical practitioners) Medicare Part D premiums Oxygen equipment and oxygen Part of life-care fee paid to retirement home designated for medical care Prescription medicines (prescribed by a doctor) and insulin Psychiatric and psychological treatment Social security tax, Medicare tax, FUTA, and state employment tax for worker providing medical care (see Publication 502) Special items (artificial limbs, false teeth, eyeglasses, contact lenses, hearing aids, crutches, wheelchair, etc. State tax efile ) Special education for mentally or physically disabled persons (see Publication 502) Stop-smoking programs Transportation for needed medical care Treatment at a drug or alcohol center (includes meals and lodging provided by the center) Wages for nursing services (see Publication 502) Contributions to Archer MSAs (see Publication 969) Bottled water Diaper service Expenses for your general health (even if following your doctor's advice) such as: —Health club dues —Household help (even if recommended by a doctor) —Social activities, such as dancing or swimming lessons —Trip for general health improvement Flexible spending account reimbursements for medical expenses (if contributions were on a pretax basis) (see Publication 502) Funeral, burial, or cremation expenses Health savings account payments for medical expenses (see Publication 502) Illegal operation or treatment Life insurance or income protection policies, or policies providing payment for loss of life, limb, sight, etc. State tax efile Medical insurance included in a car insurance policy covering all persons injured in or by your car Medicine you buy without a prescription Nursing care for a healthy baby Prescription drugs you brought in (or ordered shipped) from another country, in most cases (see Publication 502) Surgery for purely cosmetic reasons (see Publication 502) Toothpaste, toiletries, cosmetics, etc. State tax efile Teeth whitening Weight-loss expenses not for the treatment of obesity or other disease You can deduct only the amount of your medical and dental expenses that is more than 10% of your adjusted gross income (or that is more than 7. State tax efile 5% of your adjusted gross income if you or your spouse is age 65 or older). State tax efile What to include. State tax efile   Generally, you can include only the medical and dental expenses you paid this year, regardless of when the services were provided. State tax efile If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. State tax efile If you use a pay-by-phone or online account to pay your medical expenses, the date reported on the statement of the financial institution showing when payment was made is the date of payment. State tax efile You can include medical expenses you charge to your credit card in the year the charge is made. State tax efile It does not matter when you actually pay the amount charged. State tax efile Home Improvements You can include in medical expenses amounts you pay for home improvements if their main purpose is medical care for you, your spouse, or your dependent. State tax efile Only reasonable costs to accommodate a home to your disabled condition (or that of your spouse or your dependent(s) who live with you) are considered medical care. State tax efile Additional costs for personal motives, such as for architectural or aesthetic reasons, are not medical expenses. State tax efile Publication 502 contains additional information and examples, including a capital expense worksheet, to assist you in figuring the amount of the capital expense that you can include in your medical expenses. State tax efile Also, see Publication 502 for information about deductible operating and upkeep expenses related to such capital expense items, and for information about improvements, for medical reasons, to property rented by a person with disabilities. State tax efile Household Help You cannot include in medical expenses the cost of household help, even if such help is recommended by a doctor. State tax efile This is a personal expense that is not deductible. State tax efile However, you may be able to include certain expenses paid to a person providing nursing-type services. State tax efile For more information, see Nursing Services , later. State tax efile Also, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. State tax efile For more information, see Qualified long-term care services under Long-Term Care, later. State tax efile Hospital Services You can include in medical expenses amounts you pay for the cost of inpatient care at a hospital or similar institution if a principal reason for being there is to receive medical care. State tax efile This includes amounts paid for meals and lodging. State tax efile Also, see Meals and Lodging , later. State tax efile Long-Term Care You can include in medical expenses amounts paid for qualified long-term care services and premiums paid for qualified long-term care insurance contracts. State tax efile Qualified long-term care services. State tax efile   Qualified long-term care services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services (defined later) that are: Required by a chronically ill individual, and Provided under a plan of care prescribed by a licensed health care practitioner. State tax efile Chronically ill individual. State tax efile    An individual is chronically ill if, within the previous 12 months, a licensed health care practitioner has certified that the individual meets either of the following descriptions. State tax efile He or she is unable to perform at least two activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity. State tax efile Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. State tax efile He or she requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. State tax efile Maintenance and personal care services. State tax efile    Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with his or her disabilities (including protection from threats to health and safety due to severe cognitive impairment). State tax efile Qualified long-term care insurance contracts. State tax efile   A qualified long-term care insurance contract is an insurance contract that provides only coverage of qualified long-term care services. State tax efile The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract must be used only to reduce future premiums or increase future benefits, and Generally not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer, or the contract makes per diem or other periodic payments without regard to expenses. State tax efile   The amount of qualified long-term care premiums you can include is limited. State tax efile You can include the following as medical expenses on Schedule A (Form 1040). State tax efile Qualified long-term care premiums up to the following amounts. State tax efile Age 40 or under – $360. State tax efile Age 41 to 50 – $680. State tax efile Age 51 to 60 – $1,360. State tax efile Age 61 to 70 – $3,640. State tax efile Age 71 or over – $4,550. State tax efile Unreimbursed expenses for qualified long-term care services. State tax efile Note. State tax efile The limit on premiums is for each person. State tax efile Meals and Lodging You can include in medical expenses the cost of meals and lodging at a hospital or similar institution if your main reason for being there is to receive medical care. State tax efile You may be able to include in medical expenses the cost of lodging (but not meals) not provided in a hospital or similar institution. State tax efile You can include the cost of such lodging while away from home if all of the following requirements are met. State tax efile The lodging is primarily for, and essential to, medical care. State tax efile The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital. State tax efile The lodging is not lavish or extravagant under the circumstances. State tax efile There is no significant element of personal pleasure, recreation, or vacation in the travel away from home. State tax efile The amount you include in medical expenses for lodging cannot be more than $50 per night for each person. State tax efile You can include lodging for a person traveling with the person receiving the medical care. State tax efile For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. State tax efile (Meals are not included. State tax efile ) Nursing home. State tax efile   You can include in medical expenses the cost of medical care in a nursing home or a home for the aged for yourself, your spouse, or your dependent(s). State tax efile This includes the cost of meals and lodging in the home if a main reason for being there is to get medical care. State tax efile   Do not include the cost of meals and lodging if the reason for being in the home is personal. State tax efile However, you can include in medical expenses the part of the cost that is for medical or nursing care. State tax efile Medical Insurance Premiums You can include in medical expenses insurance premiums you pay for policies that cover medical care. State tax efile Policies can provide payment for: Hospitalization, surgical fees, X-rays, Prescription drugs and insulin, Dental care, Replacement of lost or damaged contact lenses, and Qualified long-term care insurance contracts (subject to the additional limits included in the discussion on qualified long-term care insurance contracts under Long-Term Care , earlier). State tax efile If you have a policy that provides payments for other than medical care, you can include the premiums for the medical care part of the policy if the charge for the medical part is reasonable. State tax efile The cost of the medical portion must be separately stated in the insurance contract or given to you in a separate statement. State tax efile Medicare Part A. State tax efile   If you are covered under social security (or if you are a government employee who paid Medicare tax), you are enrolled in Medicare Part A. State tax efile The payroll tax paid for Medicare Part A is not a medical expense. State tax efile If you are not covered under social security (or were not a government employee who paid Medicare tax), you can enroll voluntarily in Medicare Part A. State tax efile In this situation you can include the premiums you paid for Medicare Part A as a medical expense. State tax efile Medicare Part B. State tax efile   Medicare Part B is a supplemental medical insurance. State tax efile Premiums you pay for Medicare Part B are a medical expense. State tax efile If you applied for it at age 65 or after you became disabled, you can include in medical expenses the monthly premiums you paid. State tax efile If you were over age 65 or disabled when you first enrolled, check with your local Social Security Administration office, or go to their website at www. State tax efile SSA. State tax efile gov, to find out your premium. State tax efile Medicare Part D. State tax efile   Medicare Part D is a voluntary prescription drug insurance program for persons with Medicare Part A or Part B. State tax efile You can include as a medical expense premiums you pay for Medicare Part D. State tax efile Prepaid insurance premiums. State tax efile   Insurance premiums you pay before you are age 65 for medical care for yourself, your spouse, or your dependents after you reach age 65 are medical care expenses in the year paid if they are: Payable in equal yearly installments, or more often, and Payable for at least 10 years, or until you reach age 65 (but not for less than 5 years). State tax efile Medicines You can include in medical expenses amounts you pay for prescribed medicines and drugs. State tax efile A prescribed drug is one that requires a prescription by a doctor for its use by an individual. State tax efile You can also include amounts you pay for insulin. State tax efile Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed. State tax efile Imported medicines and drugs. State tax efile   If you import medicines or drugs from other countries, see Medicines and Drugs From Other Countries, under What Expenses Are Not Includible, in Publication 502. State tax efile Nursing Services You can include in medical expenses wages and other amounts you pay for nursing services. State tax efile The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. State tax efile This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. State tax efile These services can be provided in your home or another care facility. State tax efile Generally, only the amount spent for nursing services is a medical expense. State tax efile If the attendant also provides personal and household services, amounts paid to the attendant must be divided between the time spent performing household and personal services and the time spent for nursing services. State tax efile However, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. State tax efile See Maintenance and personal care services under Qualified long-term care services, earlier. State tax efile Additionally, certain expenses for household services or for the care of a qualifying individual incurred to allow you to work may qualify for the child and dependent care credit. State tax efile See Child and Dependent Care Credit , later, and Publication 503, Child and Dependent Care Expenses. State tax efile You can also include in medical expenses part of the amount you pay for that attendant's meals. State tax efile Divide the food expense among the household members to find the cost of the attendant's food. State tax efile Then divide that cost in the same manner as in the preceding paragraph. State tax efile If you had to pay additional amounts for household upkeep because of the attendant, you can include the extra amounts with your medical expenses. State tax efile This includes extra rent or utilities you pay because you moved to a larger apartment to provide space for the attendant. State tax efile Employment taxes. State tax efile   You can include as a medical expense social security tax, FUTA, Medicare tax, and state employment taxes you pay for a nurse, attendant, or other person who provides medical care. State tax efile If the attendant also provides personal and household services, you can include as a medical expense only the amount of employment taxes paid for medical services as explained earlier under Nursing Services. State tax efile For information on employment tax responsibilities of household employers, see Publication 926, Household Employer's Tax Guide. State tax efile Transportation You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care. State tax efile Car expenses. State tax efile    You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. State tax efile You cannot include depreciation, insurance, general repair, or maintenance expenses. State tax efile   If you do not want to use your actual expenses for 2013, you can use the standard medical mileage rate of 24 cents a mile. State tax efile   You can also include parking fees and tolls. State tax efile You can add these fees and tolls to your medical expenses whether you use actual expenses or use the standard mileage rate. State tax efile You can also include:    Bus, taxi, train, or plane fares or ambulance service, and Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone. State tax efile Do not include transportation expenses if, for purely personal reasons, you choose to travel to another city for an operation or other medical care prescribed by your doctor. State tax efile Prev  Up  Next   Home   More Online Publications
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Understanding your CP259D Notice

We sent you this notice because our records indicate you did not file a required Form 990-T, Exempt Organization Business Income Tax Return.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).
 


What you need to do

  • Disregard this notice if you have filed the return within the last four weeks using the same name and EIN listed on the notice.
  • Otherwise, file your required Form 990-T immediately according to the instructions on the notice.
    • If you don't think you need to file, complete the Response form enclosed with your notice and mail it to us using the envelope provided.
    • If you filed more than four weeks ago or used a different name or EIN, complete the Response form enclosed with your notice and mail it to us in the envelope provided along with a signed and dated copy of the return.

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Answers to Common Questions

Who must file a Form 990-T?
Form 990-T must be filed by any organization that is tax-exempt under section 501(a) or section 529(a), if it has gross unrelated business income of $1,000 or more for a given tax year. A list of other entities who must file Form 990-T is shown in the Who Must File section of the General Instructions of Form 990-T.

When is the Form 990-T due?
For an employees' trust defined in section 401(a), an IRA (including SEPs and SIMPLEs), a Roth IRA, a Coverdell ESA, or an Archer MSA, the Form 990-T is due by the 15th day of the 4th month after the end of its tax year. All other organizations must file Form 990-T by the 15th day of the 5th month after the end of their tax year. If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day.

Can I get help over the phone?
If you have questions and/or need help completing this form, please call 1-877-829-5500. Personal assistance is available Monday through Friday, 7:00 a.m. to 7:00 p.m. CT.

Where can I go for more information about tax-exempt organizations?
For more information on tax-exempt organizations see Tax Information for Charities & Other Non-Profits.


Tips for next year

Review the tax-exempt organization resources at Form 990 Resources and Tools for Exempt Organizations.


Understanding your notice

Reading your notice
Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

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Page Last Reviewed or Updated: 29-Mar-2014

The State Tax Efile

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