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1040ez 2010printable Tax Forms

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1040ez 2010printable Tax Forms

1040ez 2010printable tax forms Publication 515 - Main Content Table of Contents Withholding of TaxWithholding Agent Withholding and Reporting Obligations Persons Subject to NRA WithholdingIdentifying the Payee Foreign Persons DocumentationBeneficial Owners Foreign Intermediaries and Foreign Flow-Through Entities Standards of Knowledge Presumption Rules Income Subject to NRA WithholdingSource of Income Fixed or Determinable Annual or Periodical Income (FDAP) Withholding on Specific IncomeEffectively Connected Income Income Not Effectively Connected Pay for Personal Services Performed Artists and Athletes (Income Codes 42 and 43) Other Income Foreign Governments and Certain Other Foreign Organizations U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Taxpayer Identification NumbersUnexpected payment. 1040ez 2010printable tax forms Depositing Withheld TaxesWhen Deposits Are Required Adjustment for Overwithholding Returns RequiredJoint owners. 1040ez 2010printable tax forms Electronic reporting. 1040ez 2010printable tax forms Partnership Withholding on Effectively Connected IncomeWho Must Withhold Foreign Partner Publicly Traded Partnerships U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Real Property InterestForeign corporations. 1040ez 2010printable tax forms Domestic corporations. 1040ez 2010printable tax forms U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms real property holding corporations. 1040ez 2010printable tax forms Partnerships. 1040ez 2010printable tax forms Trusts and estates. 1040ez 2010printable tax forms Domestically controlled QIE. 1040ez 2010printable tax forms Late filing of certifications or notices. 1040ez 2010printable tax forms Certifications. 1040ez 2010printable tax forms Liability of agent or qualified substitute. 1040ez 2010printable tax forms Reporting and Paying the Tax Withholding Certificates Tax Treaty TablesTable 1 Table 2 Table 3 How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). 1040ez 2010printable tax forms Withholding of Tax In most cases, a foreign person is subject to U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms tax on its U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms source income. 1040ez 2010printable tax forms Most types of U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms source income received by a foreign person are subject to U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms tax of 30%. 1040ez 2010printable tax forms A reduced rate, including exemption, may apply if there is a tax treaty between the foreign person's country of residence and the United States. 1040ez 2010printable tax forms The tax is generally withheld (NRA withholding) from the payment made to the foreign person. 1040ez 2010printable tax forms The term “NRA withholding” is used in this publication descriptively to refer to withholding required under sections 1441, 1442, and 1443 of the Internal Revenue Code. 1040ez 2010printable tax forms In most cases, NRA withholding describes the withholding regime that requires withholding on a payment of U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms source income. 1040ez 2010printable tax forms Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject to NRA withholding. 1040ez 2010printable tax forms NRA withholding does not include withholding under section 1445 of the Code (see U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Real Property Interest, later) or under section 1446 of the Code (see Partnership Withholding on Effectively Connected Income , later). 1040ez 2010printable tax forms A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign person. 1040ez 2010printable tax forms However, a withholding agent that can reliably associate the payment with documentation (discussed later) from a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person is not required to withhold. 1040ez 2010printable tax forms In addition, a withholding agent may apply a reduced rate of withholding (including an exemption from withholding) if it can reliably associate the payment with documentation from a beneficial owner that is a foreign person entitled to a reduced rate of withholding. 1040ez 2010printable tax forms Withholding Agent You are a withholding agent if you are a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. 1040ez 2010printable tax forms A withholding agent may be an individual, corporation, partnership, trust, association, nominee (under section 1446 of the Code), or any other entity, including any foreign intermediary, foreign partnership, or U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch of certain foreign banks and insurance companies. 1040ez 2010printable tax forms You may be a withholding agent even if there is no requirement to withhold from a payment or even if another person has withheld the required amount from the payment. 1040ez 2010printable tax forms Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. 1040ez 2010printable tax forms In most cases, the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person who pays an amount subject to NRA withholding is the person responsible for withholding. 1040ez 2010printable tax forms However, other persons may be required to withhold. 1040ez 2010printable tax forms For example, a payment made by a flow-through entity or nonqualified intermediary that knows, or has reason to know, that the full amount of NRA withholding was not done by the person from which it receives a payment is required to do the appropriate withholding since it also falls within the definition of a withholding agent. 1040ez 2010printable tax forms In addition, withholding must be done by any qualified intermediary, withholding foreign partnership, or withholding foreign trust in accordance with the terms of its withholding agreement, discussed later. 1040ez 2010printable tax forms Liability for tax. 1040ez 2010printable tax forms   As a withholding agent, you are personally liable for any tax required to be withheld. 1040ez 2010printable tax forms This liability is independent of the tax liability of the foreign person to whom the payment is made. 1040ez 2010printable tax forms If you fail to withhold and the foreign payee fails to satisfy its U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties. 1040ez 2010printable tax forms   The applicable tax will be collected only once. 1040ez 2010printable tax forms If the foreign person satisfies its U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms tax liability, you are not liable for the tax but remain liable for any interest and penalties for failure to withhold. 1040ez 2010printable tax forms Determination of amount to withhold. 1040ez 2010printable tax forms   You must withhold on the gross amount subject to NRA withholding. 1040ez 2010printable tax forms You cannot reduce the gross amount by any deductions. 1040ez 2010printable tax forms However, see Scholarships and Fellowship Grants and Pay for Personal Services Performed , later, for when a deduction for a personal exemption may be allowed. 1040ez 2010printable tax forms   If the determination of the source of the income or the amount subject to tax depends on facts that are not known at the time of payment, you must withhold an amount sufficient to ensure that at least 30% of the amount subsequently determined to be subject to withholding is withheld. 1040ez 2010printable tax forms In no case, however, should you withhold more than 30% of the total amount paid. 1040ez 2010printable tax forms Or, you may make a reasonable estimate of the amount from U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms sources and put a corresponding part of the amount due in escrow until the amount from U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms sources can be determined, at which time withholding becomes due. 1040ez 2010printable tax forms When to withhold. 1040ez 2010printable tax forms   Withholding is required at the time you make a payment of an amount subject to withholding. 1040ez 2010printable tax forms A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or other property. 1040ez 2010printable tax forms A payment is considered made to a person if it is paid for that person's benefit. 1040ez 2010printable tax forms For example, a payment made to a creditor of a person in satisfaction of that person's debt to the creditor is considered made to the person. 1040ez 2010printable tax forms A payment also is considered made to a person if it is made to that person's agent. 1040ez 2010printable tax forms   A U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms partnership should withhold when any distributions that include amounts subject to withholding are made. 1040ez 2010printable tax forms However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms partnership must withhold on the foreign partner's distributive share of the income on the earlier of the date that a Schedule K-1 (Form 1065) is provided or mailed to the partner or the due date for furnishing that schedule. 1040ez 2010printable tax forms If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later. 1040ez 2010printable tax forms A U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms trust is required to withhold on the amount includible in the gross income of a foreign beneficiary to the extent the trust's distributable net income consists of an amount subject to withholding. 1040ez 2010printable tax forms To the extent a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms trust is required to distribute an amount subject to withholding but does not actually distribute the amount, it must withhold on the foreign beneficiary's allocable share at the time the income is required to be reported on Form 1042-S. 1040ez 2010printable tax forms Withholding and Reporting Obligations You are required to report payments subject to NRA withholding on Form 1042-S and to file a tax return on Form 1042. 1040ez 2010printable tax forms (See Returns Required , later. 1040ez 2010printable tax forms ) An exception from reporting may apply to individuals who are not required to withhold from a payment and who do not make the payment in the course of their trade or business. 1040ez 2010printable tax forms Form 1099 reporting and backup withholding. 1040ez 2010printable tax forms    You also may be responsible as a payer for reporting on Form 1099 payments made to a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person. 1040ez 2010printable tax forms You must withhold 28% (backup withholding rate) from a reportable payment made to a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person that is subject to Form 1099 reporting if any of the following apply. 1040ez 2010printable tax forms The U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person has not provided its taxpayer identification number (TIN) in the manner required. 1040ez 2010printable tax forms The IRS notifies you that the TIN furnished by the payee is incorrect. 1040ez 2010printable tax forms There has been a notified payee underreporting. 1040ez 2010printable tax forms There has been a payee certification failure. 1040ez 2010printable tax forms In most cases, a TIN must be provided by a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms non-exempt recipient on Form W-9, Request for Taxpayer Identification Number and Certification. 1040ez 2010printable tax forms A payer files a tax return on Form 945, Annual Return of Withheld Federal Income Tax, for backup withholding. 1040ez 2010printable tax forms You may be required to file Form 1099 and, if appropriate, backup withhold, even if you do not make the payments directly to that U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person. 1040ez 2010printable tax forms For example, you are required to report income paid to a foreign intermediary or flow-through entity that collects for a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person subject to Form 1099 reporting. 1040ez 2010printable tax forms See Identifying the Payee , later, for more information. 1040ez 2010printable tax forms Also see Section S. 1040ez 2010printable tax forms Special Rules for Reporting Payments Made Through Foreign Intermediaries and Foreign Flow-Through Entities on Form 1099 in the General Instructions for Certain Information Returns. 1040ez 2010printable tax forms Foreign persons who provide Form W-8BEN, Form W-8ECI, or Form W-8EXP (or applicable documentary evidence) are exempt from backup withholding and Form 1099 reporting. 1040ez 2010printable tax forms Wages paid to employees. 1040ez 2010printable tax forms   If you are the employer of a nonresident alien, you generally must withhold taxes at graduated rates. 1040ez 2010printable tax forms See Pay for Personal Services Performed , later. 1040ez 2010printable tax forms Effectively connected income by partnerships. 1040ez 2010printable tax forms   A withholding agent that is a partnership (whether U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms or foreign) is also responsible for withholding on its income effectively connected with a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms trade or business that is allocable to foreign partners. 1040ez 2010printable tax forms See Partnership Withholding on Effectively Connected Income , later, for more information. 1040ez 2010printable tax forms U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms real property interest. 1040ez 2010printable tax forms   A withholding agent also may be responsible for withholding if a foreign person transfers a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms real property interest to the agent, or if it is a corporation, partnership, trust, or estate that distributes a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms real property interest to a shareholder, partner, or beneficiary that is a foreign person. 1040ez 2010printable tax forms See U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Real Property Interest , later. 1040ez 2010printable tax forms Persons Subject to NRA Withholding NRA withholding applies only to payments made to a payee that is a foreign person. 1040ez 2010printable tax forms It does not apply to payments made to U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms persons. 1040ez 2010printable tax forms Usually, you determine the payee's status as a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms or foreign person based on the documentation that person provides. 1040ez 2010printable tax forms See Documentation , later. 1040ez 2010printable tax forms However, if you have received no documentation or you cannot reliably associate all or a part of a payment with documentation, then you must apply certain presumption rules, discussed later. 1040ez 2010printable tax forms Identifying the Payee In most cases, the payee is the person to whom you make the payment, regardless of whether that person is the beneficial owner of the income. 1040ez 2010printable tax forms However, there are situations in which the payee is a person other than the one to whom you actually make a payment. 1040ez 2010printable tax forms U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms agent of foreign person. 1040ez 2010printable tax forms   If you make a payment to a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person and you have actual knowledge that the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person is receiving the payment as an agent of a foreign person, you must treat the payment as made to the foreign person. 1040ez 2010printable tax forms However, if the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person is a financial institution, you may treat the institution as the payee provided you have no reason to believe that the institution will not comply with its own obligation to withhold. 1040ez 2010printable tax forms   If the payment is not subject to NRA withholding (for example, gross proceeds from the sales of securities), you must treat the payment as made to a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person and not as a payment to a foreign person. 1040ez 2010printable tax forms You may be required to report the payment on Form 1099 and, if applicable, backup withhold. 1040ez 2010printable tax forms Disregarded entities. 1040ez 2010printable tax forms   A business entity that is not a corporation and that has a single owner may be disregarded as an entity separate from its owner (a disregarded entity) for federal tax purposes. 1040ez 2010printable tax forms The payee of a payment made to a disregarded entity is the owner of the entity. 1040ez 2010printable tax forms   If the owner of the entity is a foreign person, you must apply NRA withholding unless you can treat the foreign owner as a beneficial owner entitled to a reduced rate of withholding. 1040ez 2010printable tax forms   If the owner is a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person, you do not apply NRA withholding. 1040ez 2010printable tax forms However, you may be required to report the payment on Form 1099 and, if applicable, backup withhold. 1040ez 2010printable tax forms You may assume that a foreign entity is not a disregarded entity unless you can reliably associate the payment with documentation provided by the owner or you have actual knowledge or reason to know that the foreign entity is a disregarded entity. 1040ez 2010printable tax forms Flow-Through Entities The payees of payments (other than income effectively connected with a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms trade or business) made to a foreign flow-through entity are the owners or beneficiaries of the flow-through entity. 1040ez 2010printable tax forms This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. 1040ez 2010printable tax forms Income that is, or is deemed to be, effectively connected with the conduct of a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms trade or business of a flow-through entity is treated as paid to the entity. 1040ez 2010printable tax forms All of the following are flow-through entities. 1040ez 2010printable tax forms A foreign partnership (other than a withholding foreign partnership). 1040ez 2010printable tax forms A foreign simple or foreign grantor trust (other than a withholding foreign trust). 1040ez 2010printable tax forms A fiscally transparent entity receiving income for which treaty benefits are claimed. 1040ez 2010printable tax forms See Fiscally transparent entity , later. 1040ez 2010printable tax forms In most cases, you treat a payee as a flow-through entity if it provides you with a Form W-8IMY (see Documentation , later) on which it claims such status. 1040ez 2010printable tax forms You also may be required to treat the entity as a flow-through entity under the presumption rules, discussed later. 1040ez 2010printable tax forms You must determine whether the owners or beneficiaries of a flow-through entity are U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms or foreign persons, how much of the payment relates to each owner or beneficiary, and, if the owner or beneficiary is foreign, whether a reduced rate of NRA withholding applies. 1040ez 2010printable tax forms You make these determinations based on the documentation and other information (contained in a withholding statement) that is associated with the flow-through entity's Form W-8IMY. 1040ez 2010printable tax forms If you do not have all of the information that is required to reliably associate a payment with a specific payee, you must apply the presumption rules. 1040ez 2010printable tax forms See Documentation and Presumption Rules , later. 1040ez 2010printable tax forms Withholding foreign partnerships and withholding foreign trusts are not flow-through entities. 1040ez 2010printable tax forms Foreign partnerships. 1040ez 2010printable tax forms    A foreign partnership is any partnership that is not organized under the laws of any state of the United States or the District of Columbia or any partnership that is treated as foreign under the income tax regulations. 1040ez 2010printable tax forms If a foreign partnership is not a withholding foreign partnership, the payees of income are the partners of the partnership, provided the partners are not themselves a flow-through entity or a foreign intermediary. 1040ez 2010printable tax forms However, the payee is the partnership itself if the partnership is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. 1040ez 2010printable tax forms If a partner is a foreign flow-through entity or a foreign intermediary, you apply the payee determination rules to that partner to determine the payees. 1040ez 2010printable tax forms Example 1. 1040ez 2010printable tax forms A nonwithholding foreign partnership has three partners: a nonresident alien individual; a foreign corporation; and a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms citizen. 1040ez 2010printable tax forms You make a payment of U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms source interest to the partnership. 1040ez 2010printable tax forms It gives you a Form W-8IMY with which it associates Form W-8BEN from the nonresident alien; Form W-8BEN from the foreign corporation; and Form W-9 from the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms citizen. 1040ez 2010printable tax forms The partnership also gives you a complete withholding statement that enables you to associate a part of the interest payment to each partner. 1040ez 2010printable tax forms You must treat all three partners as the payees of the interest payment as if the payment were made directly to them. 1040ez 2010printable tax forms Report the payment to the nonresident alien and the foreign corporation on Forms 1042-S. 1040ez 2010printable tax forms Report the payment to the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms citizen on Form 1099-INT. 1040ez 2010printable tax forms Example 2. 1040ez 2010printable tax forms A nonwithholding foreign partnership has two partners: a foreign corporation and a nonwithholding foreign partnership. 1040ez 2010printable tax forms The second partnership has two partners, both nonresident alien individuals. 1040ez 2010printable tax forms You make a payment of U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms source interest to the first partnership. 1040ez 2010printable tax forms It gives you a valid Form W-8IMY with which it associates a Form W-8BEN from the foreign corporation and a Form W-8IMY from the second partnership. 1040ez 2010printable tax forms In addition, Forms W-8BEN from the partners are associated with the Form W-8IMY from the second partnership. 1040ez 2010printable tax forms The Forms W-8IMY from the partnerships have complete withholding statements associated with them. 1040ez 2010printable tax forms Because you can reliably associate a part of the interest payment with the Form W-8BEN provided by the foreign corporation and the Forms W-8BEN provided by the nonresident alien individual partners as a result of the withholding statements, you must treat them as the payees of the interest. 1040ez 2010printable tax forms Example 3. 1040ez 2010printable tax forms You make a payment of U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms source dividends to a withholding foreign partnership. 1040ez 2010printable tax forms The partnership has two partners, both foreign corporations. 1040ez 2010printable tax forms You can reliably associate the payment with a valid Form W-8IMY from the partnership on which it represents that it is a withholding foreign partnership. 1040ez 2010printable tax forms You must treat the partnership as the payee of the dividends. 1040ez 2010printable tax forms Foreign simple and grantor trust. 1040ez 2010printable tax forms   A trust is foreign unless it meets both of the following tests. 1040ez 2010printable tax forms A court within the United States is able to exercise primary supervision over the administration of the trust. 1040ez 2010printable tax forms One or more U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms persons have the authority to control all substantial decisions of the trust. 1040ez 2010printable tax forms   In most cases, a foreign simple trust is a foreign trust that is required to distribute all of its income annually. 1040ez 2010printable tax forms A foreign grantor trust is a foreign trust that is treated as a grantor trust under sections 671 through 679 of the Code. 1040ez 2010printable tax forms   The payees of a payment made to a foreign simple trust are the beneficiaries of the trust. 1040ez 2010printable tax forms The payees of a payment made to a foreign grantor trust are the owners of the trust. 1040ez 2010printable tax forms However, the payee is the foreign simple or grantor trust itself if the trust is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. 1040ez 2010printable tax forms If the beneficiaries or owners are themselves flow-through entities or foreign intermediaries, you apply the payee determination rules to that beneficiary or owner to determine the payees. 1040ez 2010printable tax forms Example. 1040ez 2010printable tax forms A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms citizen. 1040ez 2010printable tax forms You make a payment of interest to the foreign trust. 1040ez 2010printable tax forms It gives you a Form W-8IMY with which it associates Forms W-8BEN from the nonresident aliens and a Form W-9 from the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms citizen. 1040ez 2010printable tax forms The trust also gives you a complete withholding statement that enables you to associate a part of the interest payment with the forms provided by each beneficiary. 1040ez 2010printable tax forms You must treat all three beneficiaries as the payees of the interest payment as if the payment were made directly to them. 1040ez 2010printable tax forms Report the payment to the nonresident aliens on Forms 1042-S. 1040ez 2010printable tax forms Report the payment to the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms citizen on Form 1099-INT. 1040ez 2010printable tax forms Fiscally transparent entity. 1040ez 2010printable tax forms   If a reduced rate of withholding under an income tax treaty is claimed, a flow-through entity includes any entity in which the interest holder must treat the entity as fiscally transparent. 1040ez 2010printable tax forms The determination of whether an entity is fiscally transparent is made on an item of income basis (that is, the determination is made separately for interest, dividends, royalties, etc. 1040ez 2010printable tax forms ). 1040ez 2010printable tax forms The interest holder in an entity makes the determination by applying the laws of the jurisdiction where the interest holder is organized, incorporated, or otherwise considered a resident. 1040ez 2010printable tax forms An entity is considered to be fiscally transparent for the income to the extent the laws of that jurisdiction require the interest holder to separately take into account on a current basis the interest holder's share of the income, whether or not distributed to the interest holder, and the character and source of the income to the interest holder are determined as if the income was realized directly from the source that paid it to the entity. 1040ez 2010printable tax forms Subject to the standards of knowledge rules discussed later, you generally make the determination that an entity is fiscally transparent based on a Form W-8IMY provided by the entity. 1040ez 2010printable tax forms   The payees of a payment made to a fiscally transparent entity are the interest holders of the entity. 1040ez 2010printable tax forms Example. 1040ez 2010printable tax forms Entity A is a business organization organized under the laws of country X that has an income tax treaty in force with the United States. 1040ez 2010printable tax forms A has two interest holders, B and C. 1040ez 2010printable tax forms B is a corporation organized under the laws of country Y. 1040ez 2010printable tax forms C is a corporation organized under the laws of country Z. 1040ez 2010printable tax forms Both countries Y and Z have an income tax treaty in force with the United States. 1040ez 2010printable tax forms A receives royalty income from U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms sources that is not effectively connected with the conduct of a trade or business in the United States. 1040ez 2010printable tax forms For U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms income tax purposes, A is treated as a partnership. 1040ez 2010printable tax forms Country X treats A as a partnership and requires the interest holders in A to separately take into account on a current basis their respective shares of the income paid to A even if the income is not distributed. 1040ez 2010printable tax forms The laws of country X provide that the character and source of the income to A's interest holders are determined as if the income was realized directly from the source that paid it to A. 1040ez 2010printable tax forms Accordingly, A is fiscally transparent in its jurisdiction, country X. 1040ez 2010printable tax forms B and C are not fiscally transparent under the laws of their respective countries of incorporation. 1040ez 2010printable tax forms Country Y requires B to separately take into account on a current basis B's share of the income paid to A, and the character and source of the income to B is determined as if the income was realized directly from the source that paid it to A. 1040ez 2010printable tax forms Accordingly, A is fiscally transparent for that income under the laws of country Y, and B is treated as deriving its share of the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms source royalty income for purposes of the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms -Y income tax treaty. 1040ez 2010printable tax forms Country Z, on the other hand, treats A as a corporation and does not require C to take into account its share of A's income on a current basis whether or not distributed. 1040ez 2010printable tax forms Therefore, A is not treated as fiscally transparent under the laws of country Z. 1040ez 2010printable tax forms Accordingly, C is not treated as deriving its share of the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms source royalty income for purposes of the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms -Z income tax treaty. 1040ez 2010printable tax forms Foreign Intermediaries In most cases, if you make payments to a foreign intermediary, the payees are the persons for whom the foreign intermediary collects the payment, such as account holders or customers, not the intermediary itself. 1040ez 2010printable tax forms This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. 1040ez 2010printable tax forms You may, however, treat a qualified intermediary that has assumed primary withholding responsibility for a payment as the payee, and you are not required to withhold. 1040ez 2010printable tax forms An intermediary is a custodian, broker, nominee, or any other person that acts as an agent for another person. 1040ez 2010printable tax forms A foreign intermediary is either a qualified intermediary or a nonqualified intermediary. 1040ez 2010printable tax forms In most cases, you determine whether an entity is a qualified intermediary or a nonqualified intermediary based on the representations the intermediary makes on Form W-8IMY. 1040ez 2010printable tax forms You must determine whether the customers or account holders of a foreign intermediary are U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms or foreign persons and, if the account holder or customer is foreign, whether a reduced rate of NRA withholding applies. 1040ez 2010printable tax forms You make these determinations based on the foreign intermediary's Form W-8IMY and associated information and documentation. 1040ez 2010printable tax forms If you do not have all of the information or documentation that is required to reliably associate a payment with a payee, you must apply the presumption rules. 1040ez 2010printable tax forms See Documentation and Presumption Rules , later. 1040ez 2010printable tax forms Nonqualified intermediary. 1040ez 2010printable tax forms   A nonqualified intermediary (NQI) is any intermediary that is a foreign person and that is not a qualified intermediary. 1040ez 2010printable tax forms The payees of a payment made to an NQI are the customers or account holders on whose behalf the NQI is acting. 1040ez 2010printable tax forms Example. 1040ez 2010printable tax forms You make a payment of interest to a foreign bank that is a nonqualified intermediary. 1040ez 2010printable tax forms The bank gives you a Form W-8IMY and the Forms W-8BEN of two foreign persons, and a Form W-9 from a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person for whom the bank is collecting the payments. 1040ez 2010printable tax forms The bank also associates with its Form W-8IMY a withholding statement on which it allocates the interest payment to each account holder and provides all other information required to be on the withholding statement. 1040ez 2010printable tax forms The account holders are the payees of the interest payment. 1040ez 2010printable tax forms You should report the part of the interest paid to the two foreign persons on Forms 1042-S and the part paid to the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person on Form 1099-INT. 1040ez 2010printable tax forms Qualified intermediary. 1040ez 2010printable tax forms   A qualified intermediary (QI) is any foreign intermediary (or foreign branch of a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms intermediary) that has entered into a qualified intermediary withholding agreement (discussed later) with the IRS. 1040ez 2010printable tax forms You may treat a QI as a payee to the extent the QI assumes primary withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for a payment. 1040ez 2010printable tax forms In this situation, the QI is required to withhold the tax. 1040ez 2010printable tax forms You can determine whether a QI has assumed responsibility from the Form W-8IMY provided by the QI. 1040ez 2010printable tax forms   A payment to a QI to the extent it does not assume primary NRA withholding responsibility is considered made to the person on whose behalf the QI acts. 1040ez 2010printable tax forms If a QI does not assume Form 1099 reporting and backup withholding responsibility, you must report on Form 1099 and, if applicable, backup withhold as if you were making the payment directly to the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person. 1040ez 2010printable tax forms Branches of financial institutions. 1040ez 2010printable tax forms   Branches of financial institutions are not permitted to operate as QIs if they are located outside of countries having approved “know-your-customer” (KYC) rules. 1040ez 2010printable tax forms The countries with approved KYC rules are listed on IRS. 1040ez 2010printable tax forms gov. 1040ez 2010printable tax forms QI withholding agreement. 1040ez 2010printable tax forms   Foreign financial institutions and foreign branches of U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms financial institutions can enter into an agreement with the IRS to be a qualified intermediary. 1040ez 2010printable tax forms   A QI is entitled to certain simplified withholding and reporting rules. 1040ez 2010printable tax forms In general, there are three major areas whereby intermediaries with QI status are afforded such simplified treatment. 1040ez 2010printable tax forms   To apply for QI status, complete Form 14345, Qualified Intermediary Application, and Form SS-4, Application for Employer Identification Number. 1040ez 2010printable tax forms These forms, and the procedures required to obtain a QI withholding agreement are available at www. 1040ez 2010printable tax forms irs. 1040ez 2010printable tax forms gov/Businesses/Corporations/Qualified-Intermediaries-(QI). 1040ez 2010printable tax forms Documentation. 1040ez 2010printable tax forms   A QI is not required to forward documentation obtained from foreign account holders to the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms withholding agent from whom the QI receives a payment of U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms source income. 1040ez 2010printable tax forms The QI maintains such documentation at its location and provides the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms withholding agent with withholding rate pools. 1040ez 2010printable tax forms A withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding. 1040ez 2010printable tax forms   A QI is required to provide the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms withholding agent with information regarding U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms persons subject to Form 1099 information reporting unless the QI assumes the primary obligation to do Form 1099 reporting and backup withholding. 1040ez 2010printable tax forms   If a QI obtains documentary evidence under the “know-your-customer” rules that apply to the QI under local law, and the documentary evidence is of a type specified in an attachment to the QI agreement, the documentary evidence remains valid until there is a change in circumstances or the QI knows the information is incorrect. 1040ez 2010printable tax forms This indefinite validity period rule does not apply to Forms W-8 or to documentary evidence that is not of the type specified in the attachment to the agreement. 1040ez 2010printable tax forms Form 1042-S reporting. 1040ez 2010printable tax forms   A QI is permitted to report payments made to its direct foreign account holders on a pooled basis rather than reporting payments to each direct account holder specifically. 1040ez 2010printable tax forms Pooled basis reporting is not available for payments to certain account holders, such as a nonqualified intermediary or a flow-through entity (discussed earlier). 1040ez 2010printable tax forms Collective refund procedures. 1040ez 2010printable tax forms   A QI may seek a refund on behalf of its direct account holders. 1040ez 2010printable tax forms The direct account holders, therefore, are not required to file returns with the IRS to obtain refunds, but rather may obtain them from the QI. 1040ez 2010printable tax forms U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branches of foreign banks and foreign insurance companies. 1040ez 2010printable tax forms   Special rules apply to a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch of a foreign bank subject to Federal Reserve Board supervision or a foreign insurance company subject to state regulatory supervision. 1040ez 2010printable tax forms If you agree to treat the branch as a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person, you may treat the branch as a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms payee for a payment subject to NRA withholding provided you receive a Form W-8IMY from the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch on which the agreement is evidenced. 1040ez 2010printable tax forms If you treat the branch as a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms payee, you are not required to withhold. 1040ez 2010printable tax forms Even though you agree to treat the branch as a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person, you must report the payment on Form 1042-S. 1040ez 2010printable tax forms   A financial institution organized in a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms possession is treated as a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch. 1040ez 2010printable tax forms The special rules discussed in this section apply to a possessions financial institution. 1040ez 2010printable tax forms   If you are paying a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch an amount that is not subject to NRA withholding, treat the payment as made to a foreign person, irrespective of any agreement to treat the branch as a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person for amounts subject to NRA withholding. 1040ez 2010printable tax forms Consequently, amounts not subject to NRA withholding that are paid to a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch are not subject to Form 1099 reporting or backup withholding. 1040ez 2010printable tax forms   Alternatively, a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch may provide you with a Form W-8IMY with which it associates the documentation of the persons on whose behalf it acts. 1040ez 2010printable tax forms In this situation, the payees are the persons on whose behalf the branch acts provided you can reliably associate the payment with valid documentation from those persons. 1040ez 2010printable tax forms See Nonqualified Intermediaries under  Documentation, later. 1040ez 2010printable tax forms   If the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch does not provide you with a Form W-8IMY, then you should treat a payment subject to NRA withholding as made to the foreign person of which the branch is a part and the income as effectively connected with the conduct of a trade or business in the United States. 1040ez 2010printable tax forms Withholding foreign partnership and foreign trust. 1040ez 2010printable tax forms   A withholding foreign partnership (WP) is any foreign partnership that has entered into a WP withholding agreement with the IRS and is acting in that capacity. 1040ez 2010printable tax forms A withholding foreign trust (WT) is a foreign simple or grantor trust that has entered into a WT withholding agreement with the IRS and is acting in that capacity. 1040ez 2010printable tax forms   A WP or WT may act in that capacity only for payments of amounts subject to NRA withholding that are distributed to, or included in the distributive share of, its direct partners, beneficiaries, or owners. 1040ez 2010printable tax forms A WP or WT acting in that capacity must assume NRA withholding responsibility for these amounts. 1040ez 2010printable tax forms You may treat a WP or WT as a payee if it has provided you with documentation (discussed later) that represents that it is acting as a WP or WT for such amounts. 1040ez 2010printable tax forms WP and WT withholding agreements. 1040ez 2010printable tax forms   The WP and WT withholding agreements and the application procedures for the agreements are in Revenue Procedure 2003-64. 1040ez 2010printable tax forms Also see the following items. 1040ez 2010printable tax forms Revenue Procedure 2004-21. 1040ez 2010printable tax forms Revenue Procedure 2005-77. 1040ez 2010printable tax forms Employer identification number (EIN). 1040ez 2010printable tax forms   A completed Form SS-4 must be submitted with the application for being a WP or WT. 1040ez 2010printable tax forms The WP or WT will be assigned a WP-EIN or WT-EIN to be used only when acting in that capacity. 1040ez 2010printable tax forms Documentation. 1040ez 2010printable tax forms   A WP or WT must provide you with a Form W-8IMY that certifies that the WP or WT is acting in that capacity and a written statement identifying the amounts for which it is so acting. 1040ez 2010printable tax forms The statement is not required to contain withholding rate pool information or any information relating to the identity of a direct partner, beneficiary, or owner. 1040ez 2010printable tax forms The Form W-8IMY must contain the WP-EIN or WT-EIN. 1040ez 2010printable tax forms Foreign Persons A payee is subject to NRA withholding only if it is a foreign person. 1040ez 2010printable tax forms A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person. 1040ez 2010printable tax forms It also includes a foreign branch of a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms financial institution if the foreign branch is a qualified intermediary. 1040ez 2010printable tax forms In most cases, the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch of a foreign corporation or partnership is treated as a foreign person. 1040ez 2010printable tax forms Nonresident alien. 1040ez 2010printable tax forms   A nonresident alien is an individual who is not a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms citizen or a resident alien. 1040ez 2010printable tax forms A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding. 1040ez 2010printable tax forms Married to U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms citizen or resident alien. 1040ez 2010printable tax forms   Nonresident alien individuals married to U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms citizens or resident aliens may choose to be treated as resident aliens for certain income tax purposes. 1040ez 2010printable tax forms However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. 1040ez 2010printable tax forms Wages paid to these individuals are subject to graduated withholding. 1040ez 2010printable tax forms See Wages Paid to Employees—Graduated Withholding . 1040ez 2010printable tax forms Resident alien. 1040ez 2010printable tax forms   A resident alien is an individual who is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year. 1040ez 2010printable tax forms Green card test. 1040ez 2010printable tax forms An alien is a resident alien if the individual was a lawful permanent resident of the United States at any time during the calendar year. 1040ez 2010printable tax forms This is known as the green card test because these aliens hold immigrant visas (also known as green cards). 1040ez 2010printable tax forms Substantial presence test. 1040ez 2010printable tax forms An alien is considered a resident alien if the individual meets the substantial presence test for the calendar year. 1040ez 2010printable tax forms Under this test, the individual must be physically present in the United States on at least: 31 days during the current calendar year, and 183 days during the current year and the 2 preceding years, counting all the days of physical presence in the current year, but only 1/3 the number of days of presence in the first preceding year, and only 1/6 the number of days in the second preceding year. 1040ez 2010printable tax forms   In most cases, the days the alien is in the United States as a teacher, student, or trainee on an “F,” “J,” “M,” or “Q” visa are not counted. 1040ez 2010printable tax forms This exception is for a limited period of time. 1040ez 2010printable tax forms   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. 1040ez 2010printable tax forms Note. 1040ez 2010printable tax forms   If your employee is late in notifying you that his or her status changed from nonresident alien to resident alien, you may have to make an adjustment to Form 941 if that employee was exempt from withholding of social security and Medicare taxes as a nonresident alien. 1040ez 2010printable tax forms For more information on making adjustments, see chapter 13 of Publication 15 (Circular E). 1040ez 2010printable tax forms Resident of a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms possession. 1040ez 2010printable tax forms   A bona fide resident of Puerto Rico, the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), or American Samoa who is not a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms citizen or a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms national is treated as a nonresident alien for the withholding rules explained here. 1040ez 2010printable tax forms A bona fide resident of a possession is someone who: Meets the presence test, Does not have a tax home outside the possession, and Does not have a closer connection to the United States or to a foreign country than to the possession. 1040ez 2010printable tax forms   For more information, see Publication 570, Tax Guide for Individuals With Income From U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Possessions. 1040ez 2010printable tax forms Foreign corporations. 1040ez 2010printable tax forms   A foreign corporation is one that does not fit the definition of a domestic corporation. 1040ez 2010printable tax forms A domestic corporation is one that was created or organized in the United States or under the laws of the United States, any of its states, or the District of Columbia. 1040ez 2010printable tax forms Guam or Northern Mariana Islands corporations. 1040ez 2010printable tax forms   A corporation created or organized in, or under the laws of, Guam or the CNMI is not considered a foreign corporation for the purpose of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons; and At least 20% of the corporation's gross income is derived from sources within Guam or the CNMI for the 3-year period ending with the close of the preceding tax year of the corporation (or the period the corporation has been in existence, if less). 1040ez 2010printable tax forms Note. 1040ez 2010printable tax forms   The provisions discussed below under U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Virgin Islands and American Samoa corporations will apply to Guam or CNMI corporations when an implementing agreement is in effect between the United States and that possession. 1040ez 2010printable tax forms U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Virgin Islands and American Samoa corporations. 1040ez 2010printable tax forms   A corporation created or organized in, or under the laws of, the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Virgin Islands or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons, At least 65% of the corporation's gross income is effectively connected with the conduct of a trade or business in the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Virgin Islands, American Samoa, Guam, the CNMI, or the United States for the 3-year period ending with the close of the tax year of the corporation (or the period the corporation or any predecessor has been in existence, if less), and No substantial part of the income of the corporation is used, directly or indirectly, to satisfy obligations to a person who is not a bona fide resident of the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Virgin Islands, American Samoa, Guam, the CNMI, or the United States. 1040ez 2010printable tax forms Foreign private foundations. 1040ez 2010printable tax forms   A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. 1040ez 2010printable tax forms Gross investment income from sources within the United States paid to a qualified foreign private foundation is subject to NRA withholding at a 4% rate (unless exempted by a treaty) rather than the ordinary statutory 30% rate. 1040ez 2010printable tax forms Other foreign organizations, associations, and charitable institutions. 1040ez 2010printable tax forms   An organization may be exempt from income tax under section 501(a) of the Internal Revenue Code even if it was formed under foreign law. 1040ez 2010printable tax forms In most cases, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the IRS has determined that they are foreign private foundations. 1040ez 2010printable tax forms   Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld. 1040ez 2010printable tax forms   You must withhold tax on the unrelated business income (as described in Publication 598, Tax on Unrelated Business Income of Exempt Organizations) of foreign tax-exempt organizations in the same way that you would withhold tax on similar income of nonexempt organizations. 1040ez 2010printable tax forms U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branches of foreign persons. 1040ez 2010printable tax forms   In most cases, a payment to a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch of a foreign person is a payment made to the foreign person. 1040ez 2010printable tax forms However, you may treat payments to U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branches of foreign banks and foreign insurance companies (discussed earlier) that are subject to U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms regulatory supervision as payments made to a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person, if you and the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. 1040ez 2010printable tax forms For this purpose, a financial institution organized under the laws of a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms possession is treated as a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch. 1040ez 2010printable tax forms Documentation In most cases, you must withhold 30% from the gross amount paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes either of the following. 1040ez 2010printable tax forms The payee is a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person. 1040ez 2010printable tax forms The payee is a foreign person that is the beneficial owner of the income and is entitled to a reduced rate of withholding. 1040ez 2010printable tax forms In most cases, you must get the documentation before you make the payment. 1040ez 2010printable tax forms The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. 1040ez 2010printable tax forms See Standards of Knowledge , later. 1040ez 2010printable tax forms If you cannot reliably associate a payment with valid documentation, you must use the presumption rules discussed later. 1040ez 2010printable tax forms For example, if you do not have documentation or you cannot determine the part of a payment that is allocable to specific documentation, you must use the presumption rules. 1040ez 2010printable tax forms The specific types of documentation are discussed in this section. 1040ez 2010printable tax forms However, see Withholding on Specific Income , later, as well as the instructions to the particular forms. 1040ez 2010printable tax forms As the withholding agent, you also may want to see the Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY. 1040ez 2010printable tax forms Section 1446 withholding. 1040ez 2010printable tax forms   Under section 1446 of the Code, a partnership must withhold tax on its effectively connected income allocable to a foreign partner. 1040ez 2010printable tax forms In most cases, a partnership determines if a partner is a foreign partner and the partner's tax classification based on the withholding certificate provided by the partner. 1040ez 2010printable tax forms This is the same documentation that is filed for NRA withholding, but may require additional information as discussed under each of the forms in this section. 1040ez 2010printable tax forms Joint owners. 1040ez 2010printable tax forms    If you make a payment to joint owners, you need to get documentation from each owner. 1040ez 2010printable tax forms Form W-9. 1040ez 2010printable tax forms   In most cases, you can treat the payee as a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person if the payee gives you a Form W-9. 1040ez 2010printable tax forms The Form W-9 can be used only by a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person and must contain the payee's taxpayer identification number (TIN). 1040ez 2010printable tax forms If there is more than one owner, you may treat the total amount as paid to a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person if any one of the owners gives you a Form W-9. 1040ez 2010printable tax forms See U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Taxpayer Identification Numbers , later. 1040ez 2010printable tax forms U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms persons are not subject to NRA withholding, but may be subject to Form 1099 reporting and backup withholding. 1040ez 2010printable tax forms Form W-8. 1040ez 2010printable tax forms   In most cases, a foreign payee of the income should give you a form in the Form W-8 series. 1040ez 2010printable tax forms Until further notice, you can rely upon Forms W-8 that contain a P. 1040ez 2010printable tax forms O. 1040ez 2010printable tax forms box as a permanent residence address provided you do not know, or have reason to know, that the person providing the form is a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person and that a street address is available. 1040ez 2010printable tax forms You may rely on Forms W-8 for which there is a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms mailing address provided you received the form prior to December 31, 2001. 1040ez 2010printable tax forms   If certain requirements are met, the foreign person can give you documentary evidence, rather than a Form W-8. 1040ez 2010printable tax forms You can rely on documentary evidence in lieu of a Form W-8 for a payment made in a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms possession. 1040ez 2010printable tax forms Other documentation. 1040ez 2010printable tax forms   Other documentation may be required to claim an exemption from, or a reduced rate of, withholding on pay for personal services. 1040ez 2010printable tax forms The nonresident alien individual may have to give you a Form W-4 or a Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. 1040ez 2010printable tax forms These forms are discussed in Pay for Personal Services Performed under Withholding on Specific Income. 1040ez 2010printable tax forms Beneficial Owners If all the appropriate requirements have been established on a Form W-8BEN, W-8ECI, W-8EXP or, if applicable, on documentary evidence, you may treat the payee as a foreign beneficial owner. 1040ez 2010printable tax forms Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. 1040ez 2010printable tax forms   This form is used by a foreign person to: Establish foreign status; Claim that such person is the beneficial owner of the income for which the form is being furnished or a partner in a partnership subject to section 1446 withholding; and If applicable, claim a reduced rate of, or exemption from, withholding under an income tax treaty. 1040ez 2010printable tax forms   Form W-8BEN also may be used to claim that the foreign person is exempt from Form 1099 reporting and backup withholding for income that is not subject to NRA withholding. 1040ez 2010printable tax forms For example, a foreign person may provide a Form W-8BEN to a broker to establish that the gross proceeds from the sale of securities are not subject to Form 1099 reporting or backup withholding. 1040ez 2010printable tax forms Claiming treaty benefits. 1040ez 2010printable tax forms   You may apply a reduced rate of withholding to a foreign person that provides a Form W-8BEN claiming a reduced rate of withholding under an income tax treaty only if the person provides a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms TIN and certifies that: It is a resident of a treaty country; It is the beneficial owner of the income; If it is an entity, it derives the income within the meaning of section 894 of the Internal Revenue Code (it is not fiscally transparent); and It meets any limitation on benefits provision contained in the treaty, if applicable. 1040ez 2010printable tax forms   If the foreign beneficial owner claiming a treaty benefit is related to you, the foreign beneficial owner also must certify on Form W-8BEN that it will file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), if the amount subject to NRA withholding received during a calendar year exceeds, in the aggregate, $500,000. 1040ez 2010printable tax forms   An entity derives income for which it is claiming treaty benefits only if the entity is not treated as fiscally transparent for that income. 1040ez 2010printable tax forms See Fiscally transparent entity discussed earlier under Flow-Through Entities. 1040ez 2010printable tax forms   Limitations on benefits provisions generally prohibit third country residents from obtaining treaty benefits. 1040ez 2010printable tax forms For example, a foreign corporation may not be entitled to a reduced rate of withholding unless a minimum percentage of its owners are citizens or residents of the United States or the treaty country. 1040ez 2010printable tax forms   The exemptions from, or reduced rates of, U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms tax vary under each treaty. 1040ez 2010printable tax forms You must check the provisions of the tax treaty that apply. 1040ez 2010printable tax forms Tables at the end of this publication show the countries with which the United States has income tax treaties and the rates of withholding that apply in cases where all conditions of the particular treaty articles are satisfied. 1040ez 2010printable tax forms   If you know, or have reason to know, that an owner of income is not eligible for treaty benefits claimed, you must not apply the treaty rate. 1040ez 2010printable tax forms You are not, however, responsible for misstatements on a Form W-8, documentary evidence, or statements accompanying documentary evidence for which you did not have actual knowledge, or reason to know, that the statements were incorrect. 1040ez 2010printable tax forms Exceptions to TIN requirement. 1040ez 2010printable tax forms   A foreign person does not have to provide a TIN to claim a reduced rate of withholding under a treaty if the requirements for the following exceptions are met. 1040ez 2010printable tax forms Income from marketable securities (discussed next). 1040ez 2010printable tax forms Unexpected payments to an individual (discussed under U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Taxpayer Identification Numbers ). 1040ez 2010printable tax forms Marketable securities. 1040ez 2010printable tax forms   A Form W-8BEN provided to claim treaty benefits does not need a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms TIN if the foreign beneficial owner is claiming the benefits on income from marketable securities. 1040ez 2010printable tax forms For this purpose, income from a marketable security consists of the following items. 1040ez 2010printable tax forms Dividends and interest from stocks and debt obligations that are actively traded. 1040ez 2010printable tax forms Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund). 1040ez 2010printable tax forms Dividends, interest, or royalties from units of beneficial interest in a unit investment trust that are (or were upon issuance) publicly offered and are registered with the SEC under the Securities Act of 1933. 1040ez 2010printable tax forms Income related to loans of any of the above securities. 1040ez 2010printable tax forms Offshore accounts. 1040ez 2010printable tax forms   If a payment is made outside the United States to an offshore account, a payee may give you documentary evidence, rather than Form W-8BEN. 1040ez 2010printable tax forms   In most cases, a payment is made outside the United States if you complete the acts necessary to effect the payment outside the United States. 1040ez 2010printable tax forms However, an amount paid by a bank or other financial institution on a deposit or account usually will be treated as paid at the branch or office where the amount is credited. 1040ez 2010printable tax forms An offshore account is an account maintained at an office or branch of a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms or foreign bank or other financial institution at any location outside the United States. 1040ez 2010printable tax forms   You may rely on documentary evidence given to you by a nonqualified intermediary or a flow-through entity with its Form W-8IMY. 1040ez 2010printable tax forms This rule applies even though you make the payment to a nonqualified intermediary or flow-through entity in the United States. 1040ez 2010printable tax forms In most cases, the nonqualified intermediary or flow-through entity that gives you documentary evidence also will have to give you a withholding statement, discussed later. 1040ez 2010printable tax forms Documentary evidence. 1040ez 2010printable tax forms   You may apply a reduced rate of withholding to income from marketable securities (discussed earlier) paid outside the United States to an offshore account if the beneficial owner gives you documentary evidence in place of a Form W-8BEN. 1040ez 2010printable tax forms To claim treaty benefits, the documentary evidence must be one of the following: A certificate of residence that: Is issued by a tax official of the treaty country of which the foreign beneficial owner claims to be a resident, States that the person has filed its most recent income tax return as a resident of that country, and Is issued within 3 years prior to being presented to you. 1040ez 2010printable tax forms Documentation for an individual that: Includes the individual's name, address, and photograph, Is an official document issued by an authorized governmental body, and Is issued no more than 3 years prior to being presented to you. 1040ez 2010printable tax forms Documentation for an entity that: Includes the name of the entity, Includes the address of its principal office in the treaty country, and Is an official document issued by an authorized governmental body. 1040ez 2010printable tax forms In addition to the documentary evidence, a foreign beneficial owner that is an entity must provide a statement that it derives the income for which it claims treaty benefits and that it meets one or more of the conditions set forth in a limitation on benefits article, if any, (or similar provision) contained in the applicable treaty. 1040ez 2010printable tax forms Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States. 1040ez 2010printable tax forms   This form is used by a foreign person to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim that the income is effectively connected with the conduct of a trade or business in the United States. 1040ez 2010printable tax forms (See Effectively Connected Income , later. 1040ez 2010printable tax forms )   Effectively connected income for which a valid Form W-8ECI has been provided is generally not subject to NRA withholding. 1040ez 2010printable tax forms   If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms trade or business is subject to withholding under section 1446. 1040ez 2010printable tax forms If the partner has made, or will make, an election under section 871(d) or 882(d), the partner must submit Form W-8ECI, and attach a copy of the election, or a statement of intent to elect, to the form. 1040ez 2010printable tax forms    If the partner's only effectively connected income is the income allocated from the partnership and the partner is not making the election under section 871(d) or 882(d), the partner should provide Form W-8BEN to the partnership. 1040ez 2010printable tax forms Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. 1040ez 2010printable tax forms   This form is used by a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms possession to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim a reduced rate of, or an exemption from, withholding as such an entity. 1040ez 2010printable tax forms   If the government or organization is a partner in a partnership carrying on a trade or business in the United States, the effectively connected income allocable to the partner is subject to withholding under section 1446. 1040ez 2010printable tax forms   See Foreign Governments and Certain Other Foreign Organizations , later. 1040ez 2010printable tax forms Foreign Intermediaries and Foreign Flow-Through Entities Payments made to a foreign intermediary or foreign flow-through entity are treated as made to the payees on whose behalf the intermediary or entity acts. 1040ez 2010printable tax forms The Form W-8IMY provided by a foreign intermediary or flow-through entity must be accompanied by additional information for you to be able to reliably associate the payment with a payee. 1040ez 2010printable tax forms The additional information required depends on the type of intermediary or flow-through entity and the extent of the withholding responsibilities it assumes. 1040ez 2010printable tax forms Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Branches for United States Tax Withholding. 1040ez 2010printable tax forms   This form is used by foreign intermediaries and foreign flow-through entities, as well as certain U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branches, to: Represent that a foreign person is a qualified intermediary or nonqualified intermediary, Represent, if applicable, that the qualified intermediary is assuming primary NRA withholding responsibility and/or primary Form 1099 reporting and backup withholding responsibility, Represent that a foreign partnership or a foreign simple or grantor trust is a withholding foreign partnership or a withholding foreign trust, Represent that a foreign flow-through entity is a nonwithholding foreign partnership, or a nonwithholding foreign trust and that the income is not effectively connected with the conduct of a trade or business in the United States, Represent that the provider is a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch of a foreign bank or insurance company and either is agreeing to be treated as a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person or is transmitting documentation of the persons on whose behalf it is acting, or Represent that, for purposes of section 1446, it is an upper-tier foreign partnership or a foreign grantor trust and that the form is being used to transmit the required documentation. 1040ez 2010printable tax forms For information on qualifying as an upper-tier foreign partnership, see Regulations section 1. 1040ez 2010printable tax forms 1446-5. 1040ez 2010printable tax forms Qualified Intermediaries In most cases, a QI is any foreign intermediary that has entered into a QI withholding agreement (discussed earlier) with the IRS. 1040ez 2010printable tax forms A foreign intermediary that has received a QI employer identification number (QI-EIN) may represent on Form W-8IMY that it is a QI before it receives a fully executed agreement. 1040ez 2010printable tax forms The intermediary can claim that it is a QI until the IRS revokes its QI-EIN. 1040ez 2010printable tax forms The IRS will revoke a QI-EIN if the QI agreement is not executed and returned to the IRS within a reasonable period of time after the agreement was sent to the intermediary for signature. 1040ez 2010printable tax forms Responsibilities. 1040ez 2010printable tax forms   Payments made to a QI that does not assume NRA withholding responsibility are treated as paid to its account holders and customers. 1040ez 2010printable tax forms However, a QI is not required to provide you with documentation it obtains from its foreign account holders and customers. 1040ez 2010printable tax forms Instead, it provides you with a withholding statement that contains withholding rate pool information. 1040ez 2010printable tax forms A withholding rate pool is a payment of a single type of income, determined in accordance with the categories of income reported on Form 1042-S that is subject to a single rate of withholding. 1040ez 2010printable tax forms A qualified intermediary is required to provide you with information regarding U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms persons subject to Form 1099 reporting and to provide you withholding rate pool information separately for each such U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person unless it has assumed Form 1099 reporting and backup withholding responsibility. 1040ez 2010printable tax forms For the alternative procedure for providing rate pool information for U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms non-exempt persons, see the Form W-8IMY instructions. 1040ez 2010printable tax forms   The withholding statement must: Designate those accounts for which it acts as a qualified intermediary, Designate those accounts for which it assumes primary NRA withholding responsibility and/or primary Form 1099 and backup withholding responsibility, and Provide sufficient information for you to allocate the payment to a withholding rate pool. 1040ez 2010printable tax forms   The extent to which you must have withholding rate pool information depends on the withholding and reporting obligations assumed by the QI. 1040ez 2010printable tax forms Primary responsibility not assumed. 1040ez 2010printable tax forms   If a QI does not assume primary NRA withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for the payment, you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to each withholding rate pool for foreign payees. 1040ez 2010printable tax forms Unless the alternative procedure applies, the qualified intermediary must provide you with a separate withholding rate pool for each U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person subject to Form 1099 reporting and/or backup withholding. 1040ez 2010printable tax forms The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. 1040ez 2010printable tax forms Primary NRA withholding responsibility assumed. 1040ez 2010printable tax forms   If you make a payment to a QI that assumes primary NRA withholding responsibility (but not primary Form 1099 reporting and backup withholding responsibility), you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to the withholding rate pool for which the QI assumes primary NRA withholding responsibility and the part of the payment attributable to withholding rate pools for each U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person, unless the alternative procedure applies, subject to Form 1099 reporting and/or backup withholding. 1040ez 2010printable tax forms The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. 1040ez 2010printable tax forms Primary NRA and Form 1099 responsibility assumed. 1040ez 2010printable tax forms   If you make a payment to a QI that assumes both primary NRA withholding responsibility and primary Form 1099 reporting and backup withholding responsibility, you can reliably associate a payment with valid documentation provided that you receive a valid Form W-8IMY. 1040ez 2010printable tax forms It is not necessary to associate the payment with withholding rate pools. 1040ez 2010printable tax forms Example. 1040ez 2010printable tax forms You make a payment of dividends to a QI. 1040ez 2010printable tax forms It has five customers: two are foreign persons who have provided documentation entitling them to a 15% rate of withholding on dividends; two are foreign persons subject to a 30% rate of withholding on dividends; and one is a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms individual who provides it with a Form W-9. 1040ez 2010printable tax forms Each customer is entitled to 20% of the dividend payment. 1040ez 2010printable tax forms The QI does not assume any primary withholding responsibility. 1040ez 2010printable tax forms The QI gives you a Form W-8IMY with which it associates the Form W-9 and a withholding statement that allocates 40% of the dividend to a 15% withholding rate pool, 40% to a 30% withholding rate pool, and 20% to the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms individual. 1040ez 2010printable tax forms You should report on Forms 1042-S 40% of the payment as made to a 15% rate dividend pool and 40% of the payment as made to a 30% rate dividend pool. 1040ez 2010printable tax forms The part of the payment allocable to the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms individual (20%) is reportable on Form 1099-DIV. 1040ez 2010printable tax forms Smaller partnerships and trusts. 1040ez 2010printable tax forms   A QI may apply special rules to a smaller partnership or trust (Joint Account Provision) only if the partnership or trust meets the following conditions. 1040ez 2010printable tax forms It is a foreign partnership or foreign simple or grantor trust. 1040ez 2010printable tax forms It is a direct account holder of the QI. 1040ez 2010printable tax forms It does not have any partner, beneficiary, or owner that is a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person or a pass- through partner, beneficiary, or owner. 1040ez 2010printable tax forms   For information on these rules, see section 4A. 1040ez 2010printable tax forms 01 of the QI agreement. 1040ez 2010printable tax forms This is found in Appendix 3 of Revenue Procedure 2003-64. 1040ez 2010printable tax forms Also see Revenue Procedure 2004-21. 1040ez 2010printable tax forms Related partnerships and trusts. 1040ez 2010printable tax forms    A QI may apply special rules to a related partnership or trust only if the partnership or trust meets the following conditions. 1040ez 2010printable tax forms It is a foreign partnership or foreign simple or grantor trust. 1040ez 2010printable tax forms It is either: A direct account holder of the QI, or An indirect account holder of the QI that is a direct partner, beneficiary, or owner of a partnership or trust to which the QI has applied this rule. 1040ez 2010printable tax forms For information on these rules, see section 4A. 1040ez 2010printable tax forms 02 of the QI agreement. 1040ez 2010printable tax forms This is found in Appendix 3 of Revenue Procedure 2003-64. 1040ez 2010printable tax forms Also see Revenue Procedure 2005-77. 1040ez 2010printable tax forms Nonqualified Intermediaries If you are making a payment to an NQI, foreign flow-through entity, or U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch that is using Form W-8IMY to transmit information about the branch's account holders or customers, you can treat the payment (or a part of the payment) as reliably associated with valid documentation from a specific payee only if, prior to making the payment: You can allocate the payment to a valid Form W-8IMY, You can reliably determine how much of the payment relates to valid documentation provided by a payee (a person that is not itself a foreign intermediary, flow- through entity, or U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch), and You have sufficient information to report the payment on Form 1042-S or Form 1099, if reporting is required. 1040ez 2010printable tax forms The NQI, flow-through entity, or U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch must give you certain information on a withholding statement that is associated with the Form W-8IMY. 1040ez 2010printable tax forms A withholding statement must be updated to keep the information accurate prior to each payment. 1040ez 2010printable tax forms Withholding statement. 1040ez 2010printable tax forms   In most cases, a withholding statement must contain the following information. 1040ez 2010printable tax forms The name, address, and TIN (if any, or if required) of each person for whom documentation is provided. 1040ez 2010printable tax forms The type of documentation (documentary evidence, Form W-8, or Form W-9) for every person for whom documentation has been provided. 1040ez 2010printable tax forms The status of the person for whom the documentation has been provided, such as whether the person is a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms exempt recipient (U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person exempt from Form 1099 reporting), U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms non-exempt recipient (U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms person subject to Form 1099 reporting), or a foreign person. 1040ez 2010printable tax forms For a foreign person, the statement must indicate whether the person is a beneficial owner or a foreign intermediary, flow-through entity, or a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch. 1040ez 2010printable tax forms The type of recipient the person is, based on the recipient codes used on Form 1042-S. 1040ez 2010printable tax forms Information allocating each payment, by income type, to each payee (including U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms exempt and U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms non-exempt recipients) for whom documentation has been provided. 1040ez 2010printable tax forms The rate of withholding that applies to each foreign person to whom a payment is allocated. 1040ez 2010printable tax forms A foreign payee's country of residence. 1040ez 2010printable tax forms If a reduced rate of withholding is claimed, the basis for a reduced rate of withholding (for example, portfolio interest, treaty benefit, etc. 1040ez 2010printable tax forms ). 1040ez 2010printable tax forms In the case of treaty benefits claimed by entities, whether the applicable limitation on benefits statement and the statement that the foreign person derives the income for which treaty benefits are claimed, have been made. 1040ez 2010printable tax forms The name, address, and TIN (if any) of any other NQI, flow-through entity, or U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms branch from which the payee will directly receive a payment. 1040ez 2010printable tax forms Any other information a withholding agent requests to fulfill its reporting and withholding obligations. 1040ez 2010printable tax forms Alternative procedure. 1040ez 2010printable tax forms   Under this alternative procedure the NQI can give you the information that allocates each payment to each foreign and U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms exempt recipient by January 31 following the calendar year of payment, rather than prior to the payment being made as otherwise required. 1040ez 2010printable tax forms To take advantage of this procedure, the NQI must: (a) inform you, on its withholding statement, that it is using the alternative procedure; and (b) obtain your consent. 1040ez 2010printable tax forms You must receive the withholding statement with all the required information (other than item 5) prior to making the payment. 1040ez 2010printable tax forms    This alternative procedure cannot be used for payments to U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms non-exempt recipients. 1040ez 2010printable tax forms Therefore, an NQI must always provide you with allocation information for all U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms non-exempt recipients prior to a payment being made. 1040ez 2010printable tax forms Pooled withholding information. 1040ez 2010printable tax forms   If an NQI uses the alternative procedure, it must provide you with withholding rate pool information, as opposed to individual allocation information, prior to the payment of a reportable amount. 1040ez 2010printable tax forms A withholding rate pool is a payment of a single type of income (as determined by the income categories on Form 1042-S) that is subject to a single rate of withholding. 1040ez 2010printable tax forms For example, an NQI that has foreign account holders receiving royalties and dividends, both subject to the 15% rate, will provide you with information for two withholding rate pools (one for royalties and one for dividends). 1040ez 2010printable tax forms The NQI must provide you with the payee specific allocation information (information allocating each payment to each payee) by January 31 following the calendar year of payment. 1040ez 2010printable tax forms Failure to provide allocation information. 1040ez 2010printable tax forms   If an NQI fails to provide you with the payee specific allocation information for a withholding rate pool by January 31, you must not apply the alternative procedure to any of the NQI's withholding rate pools from that date forward. 1040ez 2010printable tax forms You must treat the payees as undocumented and apply the presumption rules, discussed later in Presumption Rules . 1040ez 2010printable tax forms An NQI is deemed to have f
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The 1040ez 2010printable Tax Forms

1040ez 2010printable tax forms 32. 1040ez 2010printable tax forms   Child and Dependent Care Credit Table of Contents Reminders Introduction Useful Items - You may want to see: Tests To Claim the CreditQualifying Person Test Earned Income Test Work-Related Expense Test Joint Return Test Provider Identification Test How To Figure the CreditFiguring Total Work-Related Expenses Earned Income Limit Dollar Limit Amount of Credit How To Claim the CreditTax credit not refundable. 1040ez 2010printable tax forms Employment Taxes for Household Employers Reminders Taxpayer identification number needed for each qualifying person. 1040ez 2010printable tax forms  You must include on line 2 of Form 2441 the name and taxpayer identification number (generally the social security number) of each qualifying person. 1040ez 2010printable tax forms See Taxpayer identification number under Qualifying Person Test, later. 1040ez 2010printable tax forms You may have to pay employment taxes. 1040ez 2010printable tax forms  If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer who has to pay employment taxes. 1040ez 2010printable tax forms Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. 1040ez 2010printable tax forms See Employment Taxes for Household Employers , later. 1040ez 2010printable tax forms Introduction This chapter discusses the credit for child and dependent care expenses and covers the following topics. 1040ez 2010printable tax forms Tests you must meet to claim the credit. 1040ez 2010printable tax forms How to figure the credit. 1040ez 2010printable tax forms How to claim the credit. 1040ez 2010printable tax forms Employment taxes you may have to pay as a household employer. 1040ez 2010printable tax forms You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. 1040ez 2010printable tax forms The credit can be up to 35% of your expenses. 1040ez 2010printable tax forms To qualify, you must pay these expenses so you can work or look for work. 1040ez 2010printable tax forms This credit should not be confused with the child tax credit discussed in chapter 34. 1040ez 2010printable tax forms Dependent care benefits. 1040ez 2010printable tax forms   If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of them. 1040ez 2010printable tax forms You must complete Form 2441, Part III, before you can figure the amount of your credit. 1040ez 2010printable tax forms See Dependent Care Benefits under How To Figure the Credit, later. 1040ez 2010printable tax forms Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 503 Child and Dependent Care Expenses 926 Household Employer's Tax Guide Form (and Instructions) 2441 Child and Dependent Care Expenses Schedule H (Form 1040) Household Employment Taxes W-7 Application for IRS Individual Taxpayer Identification Number W-10 Dependent Care Provider's Identification and Certification Tests To Claim the Credit To be able to claim the credit for child and dependent care expenses, you must file Form 1040 or Form 1040A, not Form 1040EZ, and meet all the following tests. 1040ez 2010printable tax forms The care must be for one or more qualifying persons who are identified on Form 2441. 1040ez 2010printable tax forms (See Qualifying Person Test . 1040ez 2010printable tax forms ) You (and your spouse if filing jointly) must have earned income during the year. 1040ez 2010printable tax forms (However, see Rule for student-spouse or spouse not able to care for self under Earned Income Test, later. 1040ez 2010printable tax forms ) You must pay child and dependent care expenses so you (and your spouse if filing jointly) can work or look for work. 1040ez 2010printable tax forms (See Work-Related Expense Test , later. 1040ez 2010printable tax forms ) You must make payments for child and dependent care to someone you (and your spouse) cannot claim as a dependent. 1040ez 2010printable tax forms If you make payments to your child, he or she cannot be your dependent and must be age 19 or older by the end of the year. 1040ez 2010printable tax forms You cannot make payments to: Your spouse, or The parent of your qualifying person if your qualifying person is your child and under age 13. 1040ez 2010printable tax forms (See Payments to Relatives or Dependents under Work-Related Expense Test, later. 1040ez 2010printable tax forms ) Your filing status may be single, head of household, or qualifying widow(er) with dependent child. 1040ez 2010printable tax forms If you are married, you must file a joint return, unless an exception applies to you. 1040ez 2010printable tax forms (See Joint Return Test , later. 1040ez 2010printable tax forms ) You must identify the care provider on your tax return. 1040ez 2010printable tax forms (See Provider Identification Test , later. 1040ez 2010printable tax forms ) If you exclude or deduct dependent care benefits provided by a dependent care benefits plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $3,000 if one qualifying person was cared for or $6,000 if two or more qualifying persons were cared for). 1040ez 2010printable tax forms (If two or more qualifying persons were cared for, the amount you exclude or deduct will always be less than the dollar limit, since the total amount you can exclude or deduct is limited to $5,000. 1040ez 2010printable tax forms See Reduced Dollar Limit under How To Figure the Credit, later. 1040ez 2010printable tax forms ) These tests are presented in Figure 32-A and are also explained in detail in this chapter. 1040ez 2010printable tax forms Figure 32-A. 1040ez 2010printable tax forms Can You Claim the Credit? Please click here for the text description of the image. 1040ez 2010printable tax forms Figure 32-A Can You Claim the Credit? Qualifying Person Test Your child and dependent care expenses must be for the care of one or more qualifying persons. 1040ez 2010printable tax forms A qualifying person is: Your qualifying child who is your dependent and who was under age 13 when the care was provided (but see Child of divorced or separated parents or parents living apart, later), Your spouse who was not physically or mentally able to care for himself or herself and lived with you for more than half the year, or A person who was not physically or mentally able to care for himself or herself, lived with you for more than half the year, and either: Was your dependent, or Would have been your dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. 1040ez 2010printable tax forms Dependent defined. 1040ez 2010printable tax forms   A dependent is a person, other than you or your spouse, for whom you can claim an exemption. 1040ez 2010printable tax forms To be your dependent, a person must be your qualifying child (or your qualifying relative). 1040ez 2010printable tax forms Qualifying child. 1040ez 2010printable tax forms   To be your qualifying child, a child must live with you for more than half the year and meet other requirements. 1040ez 2010printable tax forms More information. 1040ez 2010printable tax forms   For more information about who is a dependent or a qualifying child, see chapter 3. 1040ez 2010printable tax forms Physically or mentally not able to care for oneself. 1040ez 2010printable tax forms   Persons who cannot dress, clean, or feed themselves because of physical or mental problems are considered not able to care for themselves. 1040ez 2010printable tax forms Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves. 1040ez 2010printable tax forms Person qualifying for part of year. 1040ez 2010printable tax forms   You determine a person's qualifying status each day. 1040ez 2010printable tax forms For example, if the person for whom you pay child and dependent care expenses no longer qualifies on September 16, count only those expenses through September 15. 1040ez 2010printable tax forms Also see Yearly limit under Dollar Limit, later. 1040ez 2010printable tax forms Birth or death of otherwise qualifying person. 1040ez 2010printable tax forms   In determining whether a person is a qualifying person, a person 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 person's home for more than half the time he or she was alive in 2013. 1040ez 2010printable tax forms Taxpayer identification number. 1040ez 2010printable tax forms   You must include on your return the name and taxpayer identification number (generally the social security number) of the qualifying person(s). 1040ez 2010printable tax forms If the correct information is not shown, the credit may be reduced or disallowed. 1040ez 2010printable tax forms Individual taxpayer identification number (ITIN) for aliens. 1040ez 2010printable tax forms   If your qualifying person is a nonresident or resident alien who does not have and cannot get a social security number (SSN), use that person's ITIN. 1040ez 2010printable tax forms The ITIN is entered wherever an SSN is requested on a tax return. 1040ez 2010printable tax forms To apply for an ITIN, see Form W-7. 1040ez 2010printable tax forms   An ITIN is for tax use only. 1040ez 2010printable tax forms It does not entitle the holder to social security benefits or change the holder's employment or immigration status under U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms law. 1040ez 2010printable tax forms Adoption taxpayer identification number (ATIN). 1040ez 2010printable tax forms   If your qualifying person is a child who was placed in your home for adoption and for whom you do not have an SSN, you must get an ATIN for the child. 1040ez 2010printable tax forms File Form W-7A, Application for Taxpayer Identification Number for Pending U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Adoptions. 1040ez 2010printable tax forms Child of divorced or separated parents or parents living apart. 1040ez 2010printable tax forms   Even if you cannot claim your child as a dependent, he or she is treated as your qualifying person if: The child was under age 13 or was not physically or mentally able to care for himself or herself, The child received over half of his or her support during the calendar year from one or both parents who 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 the calendar year, The child was in the custody of one or both parents for more than half the year, and You were the child's custodial parent. 1040ez 2010printable tax forms   The custodial parent is the parent with whom the child lived for the greater number of nights in 2013. 1040ez 2010printable tax forms If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. 1040ez 2010printable tax forms For details and an exception for a parent who works at night, see Pub. 1040ez 2010printable tax forms 501. 1040ez 2010printable tax forms   The noncustodial parent cannot treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents. 1040ez 2010printable tax forms Earned Income Test To claim the credit, you (and your spouse if filing jointly) must have earned income during the year. 1040ez 2010printable tax forms Earned income. 1040ez 2010printable tax forms   Earned income includes wages, salaries, tips, other taxable employee compensation, and net earnings from self-employment. 1040ez 2010printable tax forms A net loss from self-employment reduces earned income. 1040ez 2010printable tax forms Earned income also includes strike benefits and any disability pay you report as wages. 1040ez 2010printable tax forms   Generally, only taxable compensation is included. 1040ez 2010printable tax forms However, you can elect to include nontaxable combat pay in earned income. 1040ez 2010printable tax forms If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. 1040ez 2010printable tax forms (In other words, if one of you makes the election, the other one can also make it but does not have to. 1040ez 2010printable tax forms ) You should figure your credit both ways and make the election if it gives you a greater tax benefit. 1040ez 2010printable tax forms Members of certain religious faiths opposed to social security. 1040ez 2010printable tax forms   Certain income earned by persons who are members of certain religious faiths that are opposed to participation in Social Security Act programs and have an IRS-approved form that exempts certain income from social security and Medicare taxes may not be considered earned income for this purpose. 1040ez 2010printable tax forms See Earned Income Test in Publication 503. 1040ez 2010printable tax forms Not earned income. 1040ez 2010printable tax forms   Earned income does not include: Pensions and annuities, Social security and railroad retirement benefits, Workers' compensation, Interest and dividends, Unemployment compensation, Scholarship or fellowship grants, except for those reported on a Form W-2 and paid to you for teaching or other services, Nontaxable workfare payments, Child support payments received by you, Income of nonresident aliens that is not effectively connected with a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms trade or business, or Any amount received for work while an inmate in a penal institution. 1040ez 2010printable tax forms Rule for student-spouse or spouse not able to care for self. 1040ez 2010printable tax forms   Your spouse is treated as having earned income for any month that he or she is: A full-time student, or Physically or mentally not able to care for himself or herself. 1040ez 2010printable tax forms (Your spouse also must live with you for more than half the year. 1040ez 2010printable tax forms )   If you are filing a joint return, this rule also applies to you. 1040ez 2010printable tax forms You can be treated as having earned income for any month you are a full-time student or not able to care for yourself. 1040ez 2010printable tax forms   Figure the earned income of the nonworking spouse described under (1) or (2) above as explained under Earned Income Limit , later. 1040ez 2010printable tax forms   This rule applies to only one spouse for any one month. 1040ez 2010printable tax forms If, in the same month, both you and your spouse do not work and are either full-time students or not physically or mentally able to care for yourselves, only one of you can be treated as having earned income in that month. 1040ez 2010printable tax forms Full-time student. 1040ez 2010printable tax forms   You are a full-time student if you are enrolled at a school for the number of hours or classes that the school considers full time. 1040ez 2010printable tax forms You must have been a full-time student for some part of each of 5 calendar months during the year. 1040ez 2010printable tax forms (The months need not be consecutive. 1040ez 2010printable tax forms ) School. 1040ez 2010printable tax forms   The term “school” includes high schools, colleges, universities, and technical, trade, and mechanical schools. 1040ez 2010printable tax forms A school does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. 1040ez 2010printable tax forms Work-Related Expense Test Child and dependent care expenses must be work-related to qualify for the credit. 1040ez 2010printable tax forms Expenses are considered work-related only if both of the following are true. 1040ez 2010printable tax forms They allow you (and your spouse if filing jointly) to work or look for work. 1040ez 2010printable tax forms They are for a qualifying person's care. 1040ez 2010printable tax forms Working or Looking for Work To be work-related, your expenses must allow you to work or look for work. 1040ez 2010printable tax forms If you are married, generally both you and your spouse must work or look for work. 1040ez 2010printable tax forms One spouse is treated as working during any month he or she is a full-time student or is not physically or mentally able to care for himself or herself. 1040ez 2010printable tax forms Your work can be for others or in your own business or partnership. 1040ez 2010printable tax forms It can be either full time or part time. 1040ez 2010printable tax forms Work also includes actively looking for work. 1040ez 2010printable tax forms However, if you do not find a job and have no earned income for the year, you cannot take this credit. 1040ez 2010printable tax forms See Earned Income Test , earlier. 1040ez 2010printable tax forms An expense is not considered work-related merely because you had it while you were working. 1040ez 2010printable tax forms The purpose of the expense must be to allow you to work. 1040ez 2010printable tax forms Whether your expenses allow you to work or look for work depends on the facts. 1040ez 2010printable tax forms Example 1. 1040ez 2010printable tax forms The cost of a babysitter while you and your spouse go out to eat is not normally a work-related expense. 1040ez 2010printable tax forms Example 2. 1040ez 2010printable tax forms You work during the day. 1040ez 2010printable tax forms Your spouse works at night and sleeps during the day. 1040ez 2010printable tax forms You pay for care of your 5-year-old child during the hours when you are working and your spouse is sleeping. 1040ez 2010printable tax forms Your expenses are considered work-related. 1040ez 2010printable tax forms Volunteer work. 1040ez 2010printable tax forms    For this purpose, you are not considered to be working if you do unpaid volunteer work or volunteer work for a nominal salary. 1040ez 2010printable tax forms Work for part of year. 1040ez 2010printable tax forms   If you work or actively look for work during only part of the period covered by the expenses, then you must figure your expenses for each day. 1040ez 2010printable tax forms For example, if you work all year and pay care expenses of $250 a month ($3,000 for the year), all the expenses are work-related. 1040ez 2010printable tax forms However, if you work or look for work for only 2 months and 15 days during the year and pay expenses of $250 a month, your work-related expenses are limited to $625 (2½ months × $250). 1040ez 2010printable tax forms Temporary absence from work. 1040ez 2010printable tax forms   You do not have to figure your expenses for each day during a short, temporary absence from work, such as for vacation or a minor illness, if you have to pay for care anyway. 1040ez 2010printable tax forms Instead, you can figure your credit including the expenses you paid for the period of absence. 1040ez 2010printable tax forms   An absence of 2 weeks or less is a short, temporary absence. 1040ez 2010printable tax forms An absence of more than 2 weeks may be considered a short, temporary absence, depending on the circumstances. 1040ez 2010printable tax forms Example. 1040ez 2010printable tax forms You pay a nanny to care for your 2-year-old son and 4-year-old daughter so you can work. 1040ez 2010printable tax forms You become ill and miss 4 months of work but receive sick pay. 1040ez 2010printable tax forms You continue to pay the nanny to care for the children while you are ill. 1040ez 2010printable tax forms Your absence is not a short, temporary absence, and your expenses are not considered work-related. 1040ez 2010printable tax forms Part-time work. 1040ez 2010printable tax forms   If you work part-time, you generally must figure your expenses for each day. 1040ez 2010printable tax forms However, if you have to pay for care weekly, monthly, or in another way that includes both days worked and days not worked, you can figure your credit including the expenses you paid for days you did not work. 1040ez 2010printable tax forms Any day when you work at least 1 hour is a day of work. 1040ez 2010printable tax forms Example 1. 1040ez 2010printable tax forms You work 3 days a week. 1040ez 2010printable tax forms While you work, your 6-year-old child attends a dependent care center, which complies with all state and local regulations. 1040ez 2010printable tax forms You can pay the center $150 for any 3 days a week or $250 for 5 days a week. 1040ez 2010printable tax forms Your child attends the center 5 days a week. 1040ez 2010printable tax forms Your work-related expenses are limited to $150 a week. 1040ez 2010printable tax forms Example 2. 1040ez 2010printable tax forms The facts are the same as in Example 1 except the center does not offer a 3-day option. 1040ez 2010printable tax forms The entire $250 weekly fee may be a work-related expense. 1040ez 2010printable tax forms Care of a Qualifying Person To be work-related, your expenses must be to provide care for a qualifying person. 1040ez 2010printable tax forms You do not have to choose the least expensive way of providing care. 1040ez 2010printable tax forms The cost of a paid care provider may be an expense for the care of a qualifying person even if another care provider is available at no cost. 1040ez 2010printable tax forms Expenses are for the care of a qualifying person only if their main purpose is the person's well-being and protection. 1040ez 2010printable tax forms Expenses for household services qualify if part of the services is for the care of qualifying persons. 1040ez 2010printable tax forms See Household services , later. 1040ez 2010printable tax forms Expenses not for care. 1040ez 2010printable tax forms   Expenses for care do not include amounts you pay for food, lodging, clothing, education, and entertainment. 1040ez 2010printable tax forms However, you can include small amounts paid for these items if they are incidental to and cannot be separated from the cost of caring for the qualifying person. 1040ez 2010printable tax forms   Child support payments are not for care and do not qualify for the credit. 1040ez 2010printable tax forms Education. 1040ez 2010printable tax forms   Expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are expenses for care. 1040ez 2010printable tax forms Expenses to attend kindergarten or a higher grade are not expenses for care. 1040ez 2010printable tax forms Do not use these expenses to figure your credit. 1040ez 2010printable tax forms   However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be expenses for care. 1040ez 2010printable tax forms   Summer school and tutoring programs are not for care. 1040ez 2010printable tax forms Example 1. 1040ez 2010printable tax forms You take your 3-year-old child to a nursery school that provides lunch and educational activities as a part of its preschool childcare service. 1040ez 2010printable tax forms The lunch and educational activities are incidental to the childcare, and their cost cannot be separated from the cost of care. 1040ez 2010printable tax forms You can count the total cost when you figure the credit. 1040ez 2010printable tax forms Example 2. 1040ez 2010printable tax forms You place your 10-year-old child in a boarding school so you can work full time. 1040ez 2010printable tax forms Only the part of the boarding school expense that is for the care of your child is a work-related expense. 1040ez 2010printable tax forms You can count that part of the expense in figuring your credit if it can be separated from the cost of education. 1040ez 2010printable tax forms You cannot count any part of the amount you pay the school for your child's education. 1040ez 2010printable tax forms Care outside your home. 1040ez 2010printable tax forms   You can count the cost of care provided outside your home if the care is for your dependent under age 13 or any other qualifying person who regularly spends at least 8 hours each day in your home. 1040ez 2010printable tax forms Dependent care center. 1040ez 2010printable tax forms   You can count care provided outside your home by a dependent care center only if the center complies with all state and local regulations that apply to these centers. 1040ez 2010printable tax forms   A dependent care center is a place that provides care for more than six persons (other than persons who live there) and receives a fee, payment, or grant for providing services for any of those persons, even if the center is not run for profit. 1040ez 2010printable tax forms Camp. 1040ez 2010printable tax forms   The cost of sending your child to an overnight camp is not considered a work-related expense. 1040ez 2010printable tax forms The cost of sending your child to a day camp may be a work-related expense, even if the camp specializes in a particular activity, such as computers or soccer. 1040ez 2010printable tax forms Transportation. 1040ez 2010printable tax forms   If a care provider takes a qualifying person to or from a place where care is provided, that transportation is for the care of the qualifying person. 1040ez 2010printable tax forms This includes transportation by bus, subway, taxi, or private car. 1040ez 2010printable tax forms However, transportation not provided by a care provider is not for the care of a qualifying person. 1040ez 2010printable tax forms Also, if you pay the transportation cost for the care provider to come to your home, that expense is not for care of a qualifying person. 1040ez 2010printable tax forms Fees and deposits. 1040ez 2010printable tax forms   Fees you paid to an agency to get the services of a care provider, deposits you paid to an agency or preschool, application fees, and other indirect expenses are work-related expenses if you have to pay them to get care, even though they are not directly for care. 1040ez 2010printable tax forms However, a forfeited deposit is not for the care of a qualifying person if care is not provided. 1040ez 2010printable tax forms Example 1. 1040ez 2010printable tax forms You paid a fee to an agency to get the services of the nanny who cares for your 2-year-old daughter while you work. 1040ez 2010printable tax forms The fee you paid is a work-related expense. 1040ez 2010printable tax forms Example 2. 1040ez 2010printable tax forms You placed a deposit with a preschool to reserve a place for your 3-year-old child. 1040ez 2010printable tax forms You later sent your child to a different preschool and forfeited the deposit. 1040ez 2010printable tax forms The forfeited deposit is not for care and so is not a work-related expense. 1040ez 2010printable tax forms Household services. 1040ez 2010printable tax forms   Expenses you pay for household services meet the work-related expense test if they are at least partly for the well-being and protection of a qualifying person. 1040ez 2010printable tax forms   Household services are ordinary and usual services done in and around your home that are necessary to run your home. 1040ez 2010printable tax forms They include the services of a housekeeper, maid, or cook. 1040ez 2010printable tax forms However, they do not include the services of a chauffeur, bartender, or gardener. 1040ez 2010printable tax forms See Household Services in Publication 503 for more information. 1040ez 2010printable tax forms   In this chapter, the term housekeeper refers to any household employee whose services include the care of a qualifying person. 1040ez 2010printable tax forms Taxes paid on wages. 1040ez 2010printable tax forms   The taxes you pay on wages for qualifying child and dependent care services are work-related expenses. 1040ez 2010printable tax forms See Employment Taxes for Household Employers , later. 1040ez 2010printable tax forms Payments to Relatives or Dependents You can count work-related payments you make to relatives who are not your dependents, even if they live in your home. 1040ez 2010printable tax forms However, do not count any amounts you pay to: A dependent for whom you (or your spouse if filing jointly) can claim an exemption, Your child who was under age 19 at the end of the year, even if he or she is not your dependent, A person who was your spouse any time during the year, or The parent of your qualifying person if your qualifying person is your child and under age 13. 1040ez 2010printable tax forms Joint Return Test Generally, married couples must file a joint return to take the credit. 1040ez 2010printable tax forms However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. 1040ez 2010printable tax forms Legally separated. 1040ez 2010printable tax forms   You are not considered married if you are legally separated from your spouse under a decree of divorce or separate maintenance. 1040ez 2010printable tax forms You may be eligible to take the credit on your return using head of household filing status. 1040ez 2010printable tax forms Married and living apart. 1040ez 2010printable tax forms   You are not considered married and are eligible to take the credit if all the following apply. 1040ez 2010printable tax forms You file a return apart from your spouse. 1040ez 2010printable tax forms Your home is the home of a qualifying person for more than half the year. 1040ez 2010printable tax forms You pay more than half the cost of keeping up your home for the year. 1040ez 2010printable tax forms Your spouse does not live in your home for the last 6 months of the year. 1040ez 2010printable tax forms Costs of keeping up a home. 1040ez 2010printable tax forms   The costs of keeping up a home normally include property taxes, mortgage interest, rent, utility charges, home repairs, insurance on the home, and food eaten at home. 1040ez 2010printable tax forms   The costs of keeping up a home do not include payments for clothing, education, medical treatment, vacations, life insurance, transportation, or mortgage principal. 1040ez 2010printable tax forms   They also do not include the purchase, permanent improvement, or replacement of property. 1040ez 2010printable tax forms For example, you cannot include the cost of replacing a water heater. 1040ez 2010printable tax forms However, you can include the cost of repairing a water heater. 1040ez 2010printable tax forms Death of spouse. 1040ez 2010printable tax forms   If your spouse died during the year and you do not remarry before the end of the year, you generally must file a joint return to take the credit. 1040ez 2010printable tax forms If you do remarry before the end of the year, the credit can be claimed on your deceased spouse's return. 1040ez 2010printable tax forms Provider Identification Test You must identify all persons or organizations that provide care for your child or dependent. 1040ez 2010printable tax forms Use Form 2441, Part I, to show the information. 1040ez 2010printable tax forms If you do not have any care providers and you are filing Form 2441 only to report taxable income in Part III, enter “none” in line 1, column (a). 1040ez 2010printable tax forms Information needed. 1040ez 2010printable tax forms   To identify the care provider, you must give the provider's: Name, Address, and Taxpayer identification number. 1040ez 2010printable tax forms   If the care provider is an individual, the taxpayer identification number is his or her social security number or individual taxpayer identification number. 1040ez 2010printable tax forms If the care provider is an organization, then it is the employer identification number (EIN). 1040ez 2010printable tax forms   You do not have to show the taxpayer identification number if the care provider is a tax-exempt organization (such as a church or school). 1040ez 2010printable tax forms In this case, enter “Tax-Exempt” in the space where Form 2441 asks for the number. 1040ez 2010printable tax forms   If you cannot provide all of the information or if the information is incorrect, you must be able to show that you used due diligence (discussed later) in trying to furnish the necessary information. 1040ez 2010printable tax forms Getting the information. 1040ez 2010printable tax forms   You can use Form W-10 to request the required information from the care provider. 1040ez 2010printable tax forms If you do not use Form W-10, you can get the information from one of the other sources listed in the instructions for Form W-10 including: A copy of the provider's social security card, A copy of the provider's completed Form W-4 if he or she is your household employee, A copy of the statement furnished by your employer if the provider is your employer's dependent care plan, or A letter or invoice from the provider if it shows the information. 1040ez 2010printable tax forms    You should keep this information with your tax records. 1040ez 2010printable tax forms Do not send Form W-10 (or other document containing this information) to the Internal Revenue Service. 1040ez 2010printable tax forms Due diligence. 1040ez 2010printable tax forms   If the care provider information you give is incorrect or incomplete, your credit may not be allowed. 1040ez 2010printable tax forms However, if you can show that you used due diligence in trying to supply the information, you can still claim the credit. 1040ez 2010printable tax forms   You can show due diligence by getting and keeping the provider's completed Form W-10 or one of the other sources of information just listed. 1040ez 2010printable tax forms Care providers can be penalized if they do not provide this information to you or if they provide incorrect information. 1040ez 2010printable tax forms Provider refusal. 1040ez 2010printable tax forms   If the provider refuses to give you their identifying information, you should report on Form 2441 whatever information you have (such as the name and address). 1040ez 2010printable tax forms Enter “See Attached Statement” in the columns calling for the information you do not have. 1040ez 2010printable tax forms Then attach a statement explaining that you requested the information from the care provider, but the provider did not give you the information. 1040ez 2010printable tax forms Be sure to write your name and social security number on this statement. 1040ez 2010printable tax forms The statement will show that you used due diligence in trying to furnish the necessary information. 1040ez 2010printable tax forms U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms citizens and resident aliens living abroad. 1040ez 2010printable tax forms   If you are living abroad, your care provider may not have, and may not be required to get, a U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms taxpayer identification number (for example, an SSN or EIN). 1040ez 2010printable tax forms If so, enter “LAFCP” (Living Abroad Foreign Care Provider) in the space for the care provider's taxpayer identification number. 1040ez 2010printable tax forms How To Figure the Credit Your credit is a percentage of your work-related expenses. 1040ez 2010printable tax forms Your expenses are subject to the earned income limit and the dollar limit. 1040ez 2010printable tax forms The percentage is based on your adjusted gross income. 1040ez 2010printable tax forms Figuring Total Work-Related Expenses To figure the credit for 2013 work-related expenses, count only those you paid by December 31, 2013. 1040ez 2010printable tax forms Expenses prepaid in an earlier year. 1040ez 2010printable tax forms   If you pay for services before they are provided, you can count the prepaid expenses only in the year the care is received. 1040ez 2010printable tax forms Claim the expenses for the later year as if they were actually paid in that later year. 1040ez 2010printable tax forms Expenses not paid until the following year. 1040ez 2010printable tax forms   Do not count 2012 expenses that you paid in 2013 as work-related expenses for 2013. 1040ez 2010printable tax forms You may be able to claim an additional credit for them on your 2013 return, but you must figure it separately. 1040ez 2010printable tax forms See Payments for prior year's expenses under Amount of Credit in Publication 503. 1040ez 2010printable tax forms    If you had expenses in 2013 that you did not pay until 2014, you cannot count them when figuring your 2013 credit. 1040ez 2010printable tax forms You may be able to claim a credit for them on your 2014 return. 1040ez 2010printable tax forms Expenses reimbursed. 1040ez 2010printable tax forms   If a state social services agency pays you a nontaxable amount to reimburse you for some of your child and dependent care expenses, you cannot count the expenses that are reimbursed as work-related expenses. 1040ez 2010printable tax forms Example. 1040ez 2010printable tax forms You paid work-related expenses of $3,000. 1040ez 2010printable tax forms You are reimbursed $2,000 by a state social services agency. 1040ez 2010printable tax forms You can use only $1,000 to figure your credit. 1040ez 2010printable tax forms Medical expenses. 1040ez 2010printable tax forms   Some expenses for the care of qualifying persons who are not able to care for themselves may qualify as work-related expenses and also as medical expenses. 1040ez 2010printable tax forms You can use them either way, but you cannot use the same expenses to claim both a credit and a medical expense deduction. 1040ez 2010printable tax forms   If you use these expenses to figure the credit and they are more than the earned income limit or the dollar limit, discussed later, you can add the excess to your medical expenses. 1040ez 2010printable tax forms However, if you use your total expenses to figure your medical expense deduction, you cannot use any part of them to figure your credit. 1040ez 2010printable tax forms    Amounts excluded from your income under your employer's dependent care benefits plan cannot be used to claim a medical expense deduction. 1040ez 2010printable tax forms Dependent Care Benefits If you receive dependent care benefits, your dollar limit for purposes of the credit may be reduced. 1040ez 2010printable tax forms See Reduced Dollar Limit , later. 1040ez 2010printable tax forms But, even if you cannot take the credit, you may be able to take an exclusion or deduction for the dependent care benefits. 1040ez 2010printable tax forms Dependent care benefits. 1040ez 2010printable tax forms   Dependent care benefits include: Amounts your employer paid directly to either you or your care provider for the care of your qualifying person while you work, The fair market value of care in a daycare facility provided or sponsored by your employer, and Pre-tax contributions you made under a dependent care flexible spending arrangement. 1040ez 2010printable tax forms Your salary may have been reduced to pay for these benefits. 1040ez 2010printable tax forms If you received benefits as an employee, they should be shown in box 10 of your Form W-2. 1040ez 2010printable tax forms See Statement for employee , later. 1040ez 2010printable tax forms Benefits you received as a partner should be shown in box 13 of your Schedule K-1 (Form 1065) with code O. 1040ez 2010printable tax forms Enter the amount of these benefits on Form 2441, Part III, line 12. 1040ez 2010printable tax forms Exclusion or deduction. 1040ez 2010printable tax forms   If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. 1040ez 2010printable tax forms Your employer can tell you whether your benefit plan qualifies. 1040ez 2010printable tax forms To claim the exclusion, you must complete Part III of Form 2441. 1040ez 2010printable tax forms You cannot use Form 1040EZ. 1040ez 2010printable tax forms   If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. 1040ez 2010printable tax forms Therefore, you would not get an exclusion from wages. 1040ez 2010printable tax forms Instead, you would get a deduction on Form 1040, Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. 1040ez 2010printable tax forms To claim the deduction, you must use Form 2441. 1040ez 2010printable tax forms   The amount you can exclude or deduct is limited to the smallest of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). 1040ez 2010printable tax forms The definition of earned income for the exclusion or deduction is the same as the definition used when figuring the credit except that earned income for the exclusion or deduction does not include any dependent care benefits you receive. 1040ez 2010printable tax forms See Earned Income Limit, later. 1040ez 2010printable tax forms    You can choose to include your nontaxable combat pay in earned income when figuring your exclusion or deduction, even if you choose not to include it in earned income for the earned income credit or the credit for child and dependent care expenses. 1040ez 2010printable tax forms Statement for employee. 1040ez 2010printable tax forms   Your employer must give you a Form W-2 (or similar statement) showing in box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. 1040ez 2010printable tax forms Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in box 1. 1040ez 2010printable tax forms Effect of exclusion on credit. 1040ez 2010printable tax forms   If you exclude dependent care benefits from your income, the amount of the excluded benefits: Is not included in your work-related expenses, and Reduces the dollar limit, discussed later. 1040ez 2010printable tax forms Earned Income Limit The amount of work-related expenses you use to figure your credit cannot be more than: Your earned income for the year if you are single at the end of the year, or The smaller of your or your spouse's earned income for the year if you are married at the end of the year. 1040ez 2010printable tax forms Earned income is defined under Earned Income Test , earlier. 1040ez 2010printable tax forms For purposes of item (2), use your spouse's earned income for the entire year, even if you were married for only part of the year. 1040ez 2010printable tax forms Separated spouse. 1040ez 2010printable tax forms   If you are legally separated or married and living apart from your spouse (as described under Joint Return Test , earlier), you are not considered married for purposes of the earned income limit. 1040ez 2010printable tax forms Use only your income in figuring the earned income limit. 1040ez 2010printable tax forms Surviving spouse. 1040ez 2010printable tax forms   If your spouse died during the year and you file a joint return as a surviving spouse, you may, but are not required to, take into account the earned income of your spouse who died during the year. 1040ez 2010printable tax forms Community property laws. 1040ez 2010printable tax forms   You should disregard community property laws when you figure earned income for this credit. 1040ez 2010printable tax forms You or your spouse is a student or not able to care for self. 1040ez 2010printable tax forms   Your spouse who is either a full-time student or not able to care for himself or herself is treated as having earned income. 1040ez 2010printable tax forms His or her earned income for each month is considered to be at least $250 if there is one qualifying person in your home, or at least $500 if there are two or more. 1040ez 2010printable tax forms Spouse works. 1040ez 2010printable tax forms   If your spouse works during that month, use the higher of $250 (or $500) or his or her actual earned income for that month. 1040ez 2010printable tax forms Spouse qualifies for part of month. 1040ez 2010printable tax forms    If your spouse is a full-time student or not able to care for himself or herself for only part of a month, the full $250 (or $500) still applies for that month. 1040ez 2010printable tax forms You are a student or not able to care for self. 1040ez 2010printable tax forms   These rules also apply if you are a student or not able to care for yourself and you are filing a joint return. 1040ez 2010printable tax forms For each month or part of a month you are a student or not able to care for yourself, your earned income is considered to be at least $250 (or $500). 1040ez 2010printable tax forms If you also work during that month, use the higher of $250 (or $500) or your actual earned income for that month. 1040ez 2010printable tax forms Both spouses qualify. 1040ez 2010printable tax forms   If, in the same month, both you and your spouse are either full-time students or not able to care for yourselves, only one spouse can be considered to have this earned income of $250 (or $500) for that month. 1040ez 2010printable tax forms Dollar Limit There is a dollar limit on the amount of your work-related expenses you can use to figure the credit. 1040ez 2010printable tax forms This limit is $3,000 for one qualifying person, or $6,000 for two or more qualifying persons. 1040ez 2010printable tax forms If you paid work-related expenses for the care of two or more qualifying persons, the applicable dollar limit is $6,000. 1040ez 2010printable tax forms This $6,000 limit does not need to be divided equally among them. 1040ez 2010printable tax forms For example, if your work-related expenses for the care of one qualifying person are $3,200 and your work-related expenses for another qualifying person are $2,800, you can use the total, $6,000, when figuring the credit. 1040ez 2010printable tax forms Yearly limit. 1040ez 2010printable tax forms   The dollar limit is a yearly limit. 1040ez 2010printable tax forms The amount of the dollar limit remains the same no matter how long, during the year, you have a qualifying person in your household. 1040ez 2010printable tax forms Use the $3,000 limit if you paid work-related expenses for the care of one qualifying person at any time during the year. 1040ez 2010printable tax forms Use $6,000 if you paid work-related expenses for the care of more than one qualifying person at any time during the year. 1040ez 2010printable tax forms Reduced Dollar Limit If you received dependent care benefits that you exclude or deduct from your income, you must subtract that amount from the dollar limit that applies to you. 1040ez 2010printable tax forms Your reduced dollar limit is figured on Form 2441, Part III. 1040ez 2010printable tax forms See Dependent Care Benefits , earlier, for information on excluding or deducting these benefits. 1040ez 2010printable tax forms Example 1. 1040ez 2010printable tax forms George is a widower with one child and earns $24,000 a year. 1040ez 2010printable tax forms He pays work-related expenses of $2,900 for the care of his 4-year-old child and qualifies to claim the credit for child and dependent care expenses. 1040ez 2010printable tax forms His employer pays an additional $1,000 under a dependent care benefit plan. 1040ez 2010printable tax forms This $1,000 is excluded from George's income. 1040ez 2010printable tax forms Although the dollar limit for his work-related expenses is $3,000 (one qualifying person), George figures his credit on only $2,000 of the $2,900 work-related expenses he paid. 1040ez 2010printable tax forms This is because his dollar limit is reduced as shown next. 1040ez 2010printable tax forms   George's Reduced Dollar Limit 1) Maximum allowable expenses for one qualifying person $3,000 2) Minus: Dependent care benefits George excludes from income −1,000 3) Reduced dollar limit on expenses George can use for the credit $2,000 Example 2. 1040ez 2010printable tax forms Randall is married and both he and his wife are employed. 1040ez 2010printable tax forms Each has earned income in excess of $6,000. 1040ez 2010printable tax forms They have two children, Anne and Andy, ages 2 and 4, who attend a daycare facility licensed and regulated by the state. 1040ez 2010printable tax forms Randall's work-related expenses are $6,000 for the year. 1040ez 2010printable tax forms Randall's employer has a dependent care assistance program as part of its cafeteria plan, which allows employees to make pre-tax contributions to a dependent care flexible spending arrangement. 1040ez 2010printable tax forms Randall has elected to take the maximum $5,000 exclusion from his salary to cover dependent care expenses through this program. 1040ez 2010printable tax forms Although the dollar limit for his work- related expenses is $6,000 (two or more qualifying persons), Randall figures his credit on only $1,000 of the $6,000 work-related expense paid. 1040ez 2010printable tax forms This is because his dollar limit is reduced as shown next. 1040ez 2010printable tax forms   Randall's Reduced Dollar Limit 1) Maximum allowable expenses for two qualifying persons $6,000 2) Minus: Dependent care benefits Randall selects from employer's cafeteria plan and excludes from income −5,000 3) Reduced dollar limit on expenses Randall can use for the credit $1,000 Amount of Credit To determine the amount of your credit, multiply your work-related expenses (after applying the earned income and dollar limits) by a percentage. 1040ez 2010printable tax forms This percentage depends on your adjusted gross income shown on Form 1040, line 38, or Form 1040A, line 22. 1040ez 2010printable tax forms The following table shows the percentage to use based on adjusted gross income. 1040ez 2010printable tax forms   IF your adjusted gross income is: THEN the percentage is:       Over   But not over         $0   $15,000   35%       15,000   17,000   34%       17,000   19,000   33%       19,000   21,000   32%       21,000   23,000   31%       23,000   25,000   30%       25,000   27,000   29%       27,000   29,000   28%       29,000   31,000   27%       31,000   33,000   26%       33,000   35,000   25%       35,000   37,000   24%       37,000   39,000   23%       39,000   41,000   22%       41,000   43,000   21%       43,000   No limit   20%   How To Claim the Credit To claim the credit, you can file Form 1040 or Form 1040A. 1040ez 2010printable tax forms You cannot claim the credit on Form 1040EZ. 1040ez 2010printable tax forms Form 1040 or 1040A. 1040ez 2010printable tax forms   You must complete Form 2441 and attach it to your Form 1040 or 1040A. 1040ez 2010printable tax forms Enter the credit on Form 1040, line 48, or Form 1040A, line 29. 1040ez 2010printable tax forms Limit on credit. 1040ez 2010printable tax forms   The amount of credit you can claim is generally limited to the amount of your tax. 1040ez 2010printable tax forms For more information, see the Instructions for Form 2441. 1040ez 2010printable tax forms Tax credit not refundable. 1040ez 2010printable tax forms   You cannot get a refund for any part of the credit that is more than this limit. 1040ez 2010printable tax forms Recordkeeping. 1040ez 2010printable tax forms You should keep records of your work-related expenses. 1040ez 2010printable tax forms Also, if your dependent or spouse is not able to care for himself or herself, your records should show both the nature and the length of the disability. 1040ez 2010printable tax forms Other records you should keep to support your claim for the credit are described earlier under Provider Identification Test . 1040ez 2010printable tax forms Employment Taxes for Household Employers If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer. 1040ez 2010printable tax forms If you are a household employer, you will need an employer identification number (EIN) and you may have to pay employment taxes. 1040ez 2010printable tax forms If the individuals who work in your home are self-employed, you are not liable for any of the taxes discussed in this section. 1040ez 2010printable tax forms Self-employed persons who are in business for themselves are not household employees. 1040ez 2010printable tax forms Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. 1040ez 2010printable tax forms If you use a placement agency that exercises control over what work is done and how it will be done by a babysitter or companion who works in your home, the worker is not your employee. 1040ez 2010printable tax forms This control could include providing rules of conduct and appearance and requiring regular reports. 1040ez 2010printable tax forms In this case, you do not have to pay employment taxes. 1040ez 2010printable tax forms But, if an agency merely gives you a list of sitters and you hire one from that list, and pay the sitter directly, the sitter may be your employee. 1040ez 2010printable tax forms If you have a household employee, you may be subject to: Social security and Medicare taxes, Federal unemployment tax, and Federal income tax withholding. 1040ez 2010printable tax forms Social security and Medicare taxes are generally withheld from the employee's pay and matched by the employer. 1040ez 2010printable tax forms Federal unemployment (FUTA) tax is paid by the employer only and provides for payments of unemployment compensation to workers who have lost their jobs. 1040ez 2010printable tax forms Federal income tax is withheld from the employee's total pay if the employee asks you to do so and you agree. 1040ez 2010printable tax forms For more information on a household employer's tax responsibilities, see Publication 926 and Schedule H (Form 1040) and its instructions. 1040ez 2010printable tax forms State employment tax. 1040ez 2010printable tax forms   You may also have to pay state unemployment tax. 1040ez 2010printable tax forms Contact your state unemployment tax office for information. 1040ez 2010printable tax forms You should also find out whether you need to pay or collect other state employment taxes or carry workers' compensation insurance. 1040ez 2010printable tax forms For a list of state unemployment tax agencies, visit the U. 1040ez 2010printable tax forms S. 1040ez 2010printable tax forms Department of Labor's website. 1040ez 2010printable tax forms A link to that website is in Publication 926, or you can find it with an online search. 1040ez 2010printable tax forms Prev  Up  Next   Home   More Online Publications