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1040x Amended Return Form

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1040x Amended Return Form

1040x amended return form Publication 908 - Main Content Table of Contents Bankruptcy Code Tax Compliance RequirementsTax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases Tax Returns Due After the Bankruptcy Filing Individuals in Chapter 12 or 13 Individuals in Chapter 7 or 11Debtor's Election To End Tax Year – Form 1040 Taxes and the Bankruptcy Estate Bankruptcy Estate – Income, Deductions, and Credits Tax Reporting – Chapter 11 Cases Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Tax Return Example – Form 1041 Partnerships and CorporationsFiling Requirements Partnerships Corporations Receiverships Determination of TaxPrompt Determination Requests Court Jurisdiction Over Tax MattersBankruptcy Court Tax Court Federal Tax ClaimsUnsecured Tax Claims Discharge of Unpaid Tax Debt CancellationExclusions Reduction of Tax Attributes Partnerships Corporations Tax Attribute Reduction Example How To Get Tax HelpTaxpayer Advocacy Panel (TAP). 1040x amended return form Low Income Taxpayer Clinics (LITCs). 1040x amended return form Bankruptcy Code Tax Compliance Requirements Tax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases The Bankruptcy Code requires chapter 13 debtors to file all required tax returns for tax periods ending within 4 years of the debtor's bankruptcy filing. 1040x amended return form All such federal tax returns must be filed with the IRS before the date first set for the first meeting of creditors. 1040x amended return form The debtor may request the trustee to hold the meeting open for an additional 120 days to enable the debtor to file the returns (or until the day the returns are due under an automatic IRS extension, if later). 1040x amended return form After notice and hearing, the bankruptcy court may extend the period for another 30 days. 1040x amended return form Failure to timely file the returns can prevent confirmation of a chapter 13 plan and result in either dismissal of the chapter 13 case or conversion to a chapter 7 case. 1040x amended return form Note. 1040x amended return form Individual debtors should use their home address when filing Form 1040 with the IRS. 1040x amended return form Returns should not be filed “in care of” the trustee's address. 1040x amended return form Ordering tax transcripts and copies of returns. 1040x amended return form   Trustees may require the debtor to submit copies or transcripts of the debtor's returns as proof of filing. 1040x amended return form The debtor can request free transcripts of the debtor's income tax returns by filing Form 4506-T, Request for Transcript of Tax Return, with the IRS or by placing a request on the IRS's free Automated Delivery Service (ADS), available by calling 1-800-829-1040. 1040x amended return form If requested through ADS, the transcript will be mailed to the debtor's most current address according to the IRS's records. 1040x amended return form Transcripts requested using Form 4506-T may be mailed to any address, including to the attention of the trustee in the debtor's bankruptcy case. 1040x amended return form Transcripts are normally mailed within 10 to 15 days of receipt of the request by the IRS. 1040x amended return form A transcript contains most of the information on the debtor's filed return, but it is not a copy of the return. 1040x amended return form To request a copy of the debtor's filed return, file Form 4506, Request for Copy of Tax Return. 1040x amended return form It may take up to 60 days for the IRS to provide the copies after receipt of the debtor's request, and there is a fee of $57. 1040x amended return form 00 per tax return for copies of the returns. 1040x amended return form Tax Returns Due After the Bankruptcy Filing For debtors filing bankruptcy under all chapters (chapters 7, 11, 12, or 13), the Bankruptcy Code provides that if the debtor does not file a tax return that becomes due after the commencement of the bankruptcy case, or obtain an extension for filing the return before the due date, the taxing authority may request that the bankruptcy court either dismiss the case or convert the case to a case under another chapter of the Bankruptcy Code. 1040x amended return form If the debtor does not file the required return or obtain an extension within 90 days after the request is made, the bankruptcy court must dismiss or convert the case. 1040x amended return form Tax returns and payment of taxes in chapter 11 cases. 1040x amended return form   The Bankruptcy Code provides that a chapter 11 debtor's failure to timely file tax returns and pay taxes owed after the date of the “order for relief” (the bankruptcy petition date in voluntary cases) is cause for dismissal of the chapter 11 case, conversion to a chapter 7 case, or appointment of a chapter 11 trustee. 1040x amended return form Disclosure of debtor's return information to trustee. 1040x amended return form   In bankruptcy cases filed under chapter 7 or 11 by individuals, the debtor's income tax returns for the year the bankruptcy case begins and for earlier years are, upon written request, open to inspection by or disclosure to the trustee. 1040x amended return form If the bankruptcy case was not voluntary, disclosure cannot be made before the bankruptcy court has entered an order for relief, unless the court rules that the disclosure is needed for determining whether relief should be ordered. 1040x amended return form    In bankruptcy cases other than those of individuals filing under chapter 7 or 11, the debtor's income tax returns for the current and prior years are, upon written request, open to inspection by or disclosure to the trustee, but only if the IRS finds that the trustee has a material interest that will be affected by information on the return. 1040x amended return form Material interest is generally defined as a financial or monetary interest. 1040x amended return form Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. 1040x amended return form   However, the U. 1040x amended return form S. 1040x amended return form Trustee (an officer of the Department of Justice, responsible for maintaining and supervising a panel of private trustees for chapter 7 bankruptcy cases) and the standing chapter 13 trustee (the administrator of chapter 13 cases in a specific geographic region) generally do not have a material interest in the debtor’s return or return information. 1040x amended return form Disclosure of bankruptcy estate's return information to debtor. 1040x amended return form    The bankruptcy estate's tax return(s) are open, upon written request, to inspection by or disclosure to the individual debtor in a chapter 7 or 11 bankruptcy. 1040x amended return form Disclosure of the estate's return to the debtor may be necessary to enable the debtor to determine the amount and nature of the tax attributes, if any, that the debtor assumes when the bankruptcy estate terminates. 1040x amended return form Individuals in Chapter 12 or 13 Only individuals may file a chapter 13 bankruptcy. 1040x amended return form Chapter 13 relief is not available to corporations or partnerships. 1040x amended return form The bankruptcy estate is not treated as a separate entity for tax purposes when an individual files a petition under chapter 12 (Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income) or 13 (Adjustment of Debts of an Individual with Regular Income) of the Bankruptcy Code. 1040x amended return form In these cases the individual continues to file the same federal income tax returns that were filed prior to the bankruptcy petition, Form 1040, U. 1040x amended return form S. 1040x amended return form Individual Income Tax Return. 1040x amended return form On the debtor's individual tax return, Form 1040, report all income received during the entire year and deduct all allowable expenses. 1040x amended return form Do not include in income the amount from any debt canceled due to the debtor's bankruptcy. 1040x amended return form To the extent the debtor has any losses, credits, or basis in property that were previously reduced as a result of canceled debt, these reductions must be included on the debtor's return. 1040x amended return form See Debt Cancellation, later. 1040x amended return form Interest on trust accounts in chapter 13 cases. 1040x amended return form   In chapter 13 proceedings, do not include interest earned on amounts held by the trustee in trust accounts as income on the debtor's return. 1040x amended return form This interest is not available to either the debtor or creditors, it is available only to the trustee for use by the U. 1040x amended return form S. 1040x amended return form Trustee system. 1040x amended return form The interest is also not taxable to the trustee as income. 1040x amended return form Individuals in Chapter 7 or 11 When an individual debtor files for bankruptcy under chapter 7 or 11 of the Bankruptcy Code, the bankruptcy estate is treated as a new taxable entity, separate from the individual taxpayer. 1040x amended return form The bankruptcy estate in a chapter 7 case is represented by a trustee. 1040x amended return form The trustee is appointed to administer the estate and liquidate any nonexempt assets. 1040x amended return form In chapter 11 cases, the debtor often remains in control of the assets as a “debtor-in-possession” and acts as the bankruptcy trustee. 1040x amended return form However, the bankruptcy court, for cause, may appoint a trustee if such appointment is in the best interests of the creditors and the estate. 1040x amended return form During the chapter 7 or 11 bankruptcy, the debtor continues to file an individual tax return on Form 1040. 1040x amended return form The bankruptcy trustee files a Form 1041 for the bankruptcy estate. 1040x amended return form However, when a debtor in a chapter 11 bankruptcy case remains a debtor-in-possession, he or she must file both a Form 1040 individual return and a Form 1041 estate return for the bankruptcy estate (if return filing requirements are met). 1040x amended return form Although a husband and wife may file a joint bankruptcy petition whose bankruptcy estates are jointly administered, the estates are be treated as two separate entities for tax purposes. 1040x amended return form Two separate bankruptcy estate income tax returns must be filed (if each spouse separately meets the filing requirements). 1040x amended return form For information about determining the tax due and paying tax for a chapter 7 or 11 bankruptcy estate, see Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. 1040x amended return form Debtor's Election To End Tax Year – Form 1040 Short tax years. 1040x amended return form   An individual debtor in a chapter 7 or 11 case may elect to close the debtor's tax year for the year in which the bankruptcy petition is filed, as of the day before the date on which the bankruptcy case commences. 1040x amended return form If the debtor makes this election, the debtor's tax year is divided into 2 short tax years of less than 12 months each. 1040x amended return form The first tax year ends on the day before the commencement date and the second tax year begins on the commencement date. 1040x amended return form   If the election is made, the debtor's federal income tax liability for the first short tax year becomes an allowable claim against the bankruptcy estate arising before the bankruptcy filing. 1040x amended return form Also, the tax liability for the first short tax year is not subject to discharge under the Bankruptcy Code. 1040x amended return form    If the debtor does not make an election to end the tax year, the commencement of the bankruptcy case does not affect the debtor's tax year. 1040x amended return form Also, no part of the debtor's income tax liability for the year in which the bankruptcy case commences can be collected from the bankruptcy estate. 1040x amended return form Note. 1040x amended return form The debtor cannot make a short tax year election if no assets, other than exempt property, are in the bankruptcy estate. 1040x amended return form Making the Election - Filing Requirements First short tax year. 1040x amended return form   The debtor can elect to end the debtor's tax year by filing a return on Form 1040 for the first short tax year. 1040x amended return form The return must be filed on or before the 15th day of the fourth full month after the end of that first tax year. 1040x amended return form Second short tax year. 1040x amended return form   If the debtor elects to end the tax year on the day before filing the bankruptcy case, the debtor must file the return for the first short tax year in the manner discussed above. 1040x amended return form   If the debtor makes this election, the debtor must also file a separate Form 1040 for the second short tax year by the regular due date. 1040x amended return form To avoid delays in processing the return, write “Second Short Year Return After Section 1398 Election” at the top of the return. 1040x amended return form Example. 1040x amended return form Jane Doe, an individual calendar year taxpayer, filed a bankruptcy petition under chapter 7 or 11 on May 8, 2012. 1040x amended return form If Jane elected to close her tax year at the commencement of her case, Jane's first short year for 2012 runs from January 1 through May 7, 2012. 1040x amended return form Jane's second short year runs from May 8, 2012, through December 31, 2012. 1040x amended return form To have a timely filed election for the first short year, Jane must file Form 1040 (or an extension of time to file) for the period January 1 through May 7 by September 15. 1040x amended return form To avoid delays in processing the return, write “Section 1398 Election” at the top of the return. 1040x amended return form The debtor may also make the election by attaching a statement to Form 4868, Automatic Extension of Time to File an U. 1040x amended return form S. 1040x amended return form Individual Tax Return. 1040x amended return form The statement must state that the debtor elects under IRC section 1398(d)(2) to close the debtor's tax year on the day before filing the bankruptcy case. 1040x amended return form The debtor must file Form 4868 by the due date of the return for the first short tax year. 1040x amended return form The debtor's spouse may also elect to close his or her tax year, see Election by debtor's spouse, below. 1040x amended return form Election by debtor's spouse. 1040x amended return form   If the debtor is married, the debtor's spouse may join in the election to end the tax year. 1040x amended return form If the debtor and spouse make a joint election, the debtor must file a joint return for the first short tax year. 1040x amended return form The debtor must elect by the due date for filing the return for the first short tax year. 1040x amended return form Once the election is made, it cannot be revoked for the first short tax year. 1040x amended return form However, the election does not prevent the debtor and the spouse from filing separate returns for the second short tax year. 1040x amended return form Later bankruptcy of spouse. 1040x amended return form    If the debtor's spouse files for bankruptcy later in the same year, he or she may also choose to end his or her tax year, regardless of whether he or she joined in the election to end the debtor's tax year. 1040x amended return form   As each spouse has a separate bankruptcy, one or both of them may have 3 short tax years in the same calendar year. 1040x amended return form If the debtor's spouse joined the debtor's election or if the debtor had not made the election to end the tax year, the debtor can join in the spouse's election. 1040x amended return form However, if the debtor made an election and the spouse did not join that election, the debtor cannot then join the spouse's later election. 1040x amended return form The debtor and the spouse are precluded from this election because they have different tax years. 1040x amended return form This results because the debtor does not have a tax year ending the day before the spouse's filing for bankruptcy, and the debtor cannot file a joint return for a year ending on the day before the spouse's filing of bankruptcy. 1040x amended return form Example 1. 1040x amended return form Paul and Mary Harris are calendar-year taxpayers. 1040x amended return form Paul's voluntary chapter 7 bankruptcy case begins on March 4. 1040x amended return form If Paul does not make an election, his tax year does not end on March 3. 1040x amended return form If he makes an election, Paul's first tax year is January 1–March 3, and his second tax year begins on March 4. 1040x amended return form Mary could join in Paul's election as long as they file a joint return for the tax year January 1–March 3. 1040x amended return form They must make the election by July 15, the due date for filing the joint return. 1040x amended return form Example 2. 1040x amended return form Fred and Ethel Barnes are calendar-year taxpayers. 1040x amended return form Fred's voluntary chapter 7 bankruptcy case begins on May 6, and Ethel's bankruptcy case begins on November 1 of the same year. 1040x amended return form Ethel could elect to end her tax year on October 31. 1040x amended return form If Fred did not elect to end his tax year on May 5, or if he elected to do so but Ethel had not joined in his election, Ethel would have 2 tax years in the same calendar year if she decided to close her tax year. 1040x amended return form Her first tax year is January 1–October 31, and her second year is November 1–December 31. 1040x amended return form If Fred did not end his tax year as of May 5, he could join in Ethel's election to close her tax year on October 31, but only if they file a joint return for the tax year January 1–October 31. 1040x amended return form If Fred elected to end his tax year on May 5, but Ethel did not join in Fred's election, Fred cannot join in Ethel's election to end her tax year on October 31. 1040x amended return form Fred and Ethel cannot file a joint return for that short tax year because their tax years preceding October 31 were not the same. 1040x amended return form Example 3. 1040x amended return form Jack and Karen Thomas are calendar-year taxpayers. 1040x amended return form Karen's voluntary chapter 7 bankruptcy case began on April 10, and Jack's voluntary chapter 7 bankruptcy case began on October 3 of the same year. 1040x amended return form Karen elected to close her tax year on April 9 and Jack joins in Karen's election. 1040x amended return form Under these facts, Jack would have 3 tax years for the same calendar year if he makes the election relating to his own bankruptcy case. 1040x amended return form The first tax year would be January 1–April 9; the second, April 10–October 2; and the third, October 3–December 31. 1040x amended return form Karen may join in Jack's election if they file a joint return for the second short tax year (April 10–October 2). 1040x amended return form If Karen does join in, she would have the same 3 short tax years as Jack. 1040x amended return form Also, if Karen joins in Jack's election, they may file a joint return for the third tax year (October 3–December 31), but they are not required to do so. 1040x amended return form Annualizing taxable income. 1040x amended return form   If the debtor elects to close the tax year, the debtor must annualize taxable income for each short tax year in the same manner a change in annual accounting period is calculated. 1040x amended return form See Short Tax Year in Publication 538, for information on how to annualize the debtor's income and to figure the tax for the short tax year. 1040x amended return form Dismissal of bankruptcy case. 1040x amended return form   If the bankruptcy court later dismisses an individual chapter 7 or 11 case, the bankruptcy estate is no longer treated as a separate taxable entity. 1040x amended return form It is as if no bankruptcy estate was created for tax purposes. 1040x amended return form In this situation, the debtor must file amended tax returns on Form 1040X, to replace all full or short year individual returns (Form 1040) and bankruptcy estate returns (Form 1041) filed as a result of the bankruptcy case. 1040x amended return form Income, deductions, and credits previously reported by the bankruptcy estate must be reported on the debtor's amended returns. 1040x amended return form Attach a statement to the amended returns explaining why the debtor is filing an amended return. 1040x amended return form Taxes and the Bankruptcy Estate Property of the bankruptcy estate. 1040x amended return form   At the commencement of a bankruptcy case a bankruptcy estate is created. 1040x amended return form Bankruptcy law determines which of the debtor's assets become part of a bankruptcy estate. 1040x amended return form This estate generally includes all of the debtor's legal and equitable interests in property as of the commencement date. 1040x amended return form However, there are exceptions and certain property is exempted or excluded from the bankruptcy estate. 1040x amended return form Note. 1040x amended return form Exempt property and abandoned property are initially part of the bankruptcy estate, but are subsequently removed from the estate. 1040x amended return form Excluded property is never included in the estate. 1040x amended return form Transfer of assets between debtor and bankruptcy estate. 1040x amended return form   The transfer (other than by sale or exchange) of an asset from the debtor to the bankruptcy estate is not treated as a disposition for income tax purposes. 1040x amended return form The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits. 1040x amended return form For example, the transfer of an installment obligation to the estate would not accelerate gain under the rules for reporting installment sales. 1040x amended return form The estate assumes the same basis, holding period, and character of the transferred assets. 1040x amended return form Also, the estate generally accounts for the transferred assets in the same manner as debtor. 1040x amended return form   When the bankruptcy estate is terminated or dissolved, any resulting transfer (other than by sale or exchange) of the estate's assets back to the debtor is also not treated as a disposition for tax purposes. 1040x amended return form The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits to the estate. 1040x amended return form Abandoned property. 1040x amended return form    The abandonment of property by the estate to the debtor is a nontaxable disposition of property. 1040x amended return form If the debtor received abandoned property from the bankruptcy estate, the debtor assumes the same basis in the property that the bankruptcy estate had. 1040x amended return form Separate taxable entity. 1040x amended return form   When an individual files a bankruptcy petition under chapter 7 or 11, the bankruptcy estate is treated as a separate taxable entity from the debtor. 1040x amended return form The court appointed trustee or the debtor-in-possession is responsible for preparing and filing all of the bankruptcy estate's tax returns, including its income tax return on Form 1041, U. 1040x amended return form S. 1040x amended return form Income Tax Return for Estates and Trusts, and paying its taxes. 1040x amended return form The debtor remains responsible for filing his or her own returns on Form 1040, U. 1040x amended return form S. 1040x amended return form Individual Income Tax Return, and paying taxes on income that does not belong to the estate. 1040x amended return form Employer identification number. 1040x amended return form   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. 1040x amended return form The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. 1040x amended return form See Employer identification number, under Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. 1040x amended return form    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. 1040x amended return form Income, deductions, and credits – Form 1040. 1040x amended return form   In an individual chapter 7 or 11 bankruptcy case, do not include the income, deductions, and credits that belong to the bankruptcy estate on the debtor's individual income tax return (Form 1040). 1040x amended return form Also, do not include as income on the debtor's return the amount of any debt canceled by reason of the bankruptcy discharge. 1040x amended return form The bankruptcy estate must reduce certain losses, credits, and the basis in property (to the extent of these items) by the amount of canceled debt. 1040x amended return form See Debt Cancellation, below. 1040x amended return form Note. 1040x amended return form The debtor may not be able to claim certain deductions available to the bankruptcy estate such as administrative expenses. 1040x amended return form Additionally, the bankruptcy exclusion cannot be used to exclude income from a cancelled debt if the discharge of indebtedness was not within the bankruptcy case, even though the debtor was under the bankruptcy court's protection at the time. 1040x amended return form However, other exclusions, such as the insolvency exclusion, may apply. 1040x amended return form Bankruptcy Estate – Income, Deductions, and Credits Bankruptcy Estate Income Income of the estate in individual chapter 7 cases. 1040x amended return form    The gross income of the bankruptcy estate includes gross income of the debtor to which the estate is entitled under the Bankruptcy Code. 1040x amended return form Gross income also includes income generated by the bankruptcy estate from property of the estate after the commencement of the case. 1040x amended return form   Gross income of the bankruptcy estate does not include amounts received or accrued by the debtor before the commencement of the case. 1040x amended return form Additionally, in chapter 7 cases, gross income of the bankruptcy estate does not include any income that the debtor earns after the date of the bankruptcy petition. 1040x amended return form Income of the estate in individual chapter 11 cases. 1040x amended return form    In chapter 11 cases, under IRC section 1398(e)(1), gross income of the bankruptcy estate includes income that the debtor earns for services performed after the bankruptcy petition date. 1040x amended return form Also, earnings from services performed by an individual debtor after the commencement of the chapter 11 case are property of the bankruptcy estate under section 1115 of the Bankruptcy Code (11 U. 1040x amended return form S. 1040x amended return form C. 1040x amended return form section 1115). 1040x amended return form Note. 1040x amended return form A debtor-in-possession may be compensated by the estate for managing or operating a trade or business that the debtor conducted before the commencement of the bankruptcy case. 1040x amended return form Such payments should be reported by the debtor as miscellaneous income on his or her individual income tax return (Form 1040). 1040x amended return form Amounts paid by the estate to the debtor-in-possession for managing or operating the trade or business may qualify as administrative expenses of the estate. 1040x amended return form See Administrative expenses, below. 1040x amended return form Conversion or dismissal of chapter 11 cases. 1040x amended return form   If a chapter 11 case is converted to a chapter 13 case, the chapter 13 estate is not a separate taxable entity and earnings from post-conversion services and income from property of the estate realized after the conversion to chapter 13 are taxed to the debtor. 1040x amended return form If the chapter 11 case is converted to a chapter 7 case, 11 U. 1040x amended return form S. 1040x amended return form C. 1040x amended return form section 1115 does not apply after conversion and: Earnings from post-conversion services will be taxed to the debtor, rather than the estate, and The property of the chapter 11 estate will become property of the chapter 7 estate. 1040x amended return form Any income on this property will be taxed to the estate even if the income is realized after the conversion to chapter 7. 1040x amended return form If a chapter 11 case is dismissed, the debtor is treated as if the bankruptcy case had never been filed and as if no bankruptcy estate had been created. 1040x amended return form Bankruptcy Estate Deductions and Credits A bankruptcy estate deducts expenses incurred in a trade, business, or activity, and uses credits in the same way the debtor would have deducted or credited them had he or she continued operations. 1040x amended return form Note. 1040x amended return form Expenses may be disallowed under other provisions of the IRC (such as the disallowance of certain capital expenditures or expenses relating to tax-exempt interest). 1040x amended return form Administrative expenses. 1040x amended return form   Allowable expenses include administrative expenses. 1040x amended return form    Administrative expenses can only be deducted by the estate, never by the debtor. 1040x amended return form   The bankruptcy estate is allowed deductions for bankruptcy administrative expenses and fees, including accounting fees, attorney fees, and court costs. 1040x amended return form These expenses are deductible on Form 1040, Schedule A as miscellaneous itemized deductions not subject to the 2% floor on miscellaneous itemized deductions, because they would not have been incurred if property had not been held by the bankruptcy estate. 1040x amended return form See IRC section 67(e). 1040x amended return form Administrative expenses of the bankruptcy estate attributable to conducting a trade or business for the production of estate rents or royalties are deductible in arriving at adjusted gross income on Form 1040, Schedules C, E, and F. 1040x amended return form Note. 1040x amended return form The bankruptcy estate uses Form 1041 as a transmittal for the tax return prepared using Form 1040 and its schedules. 1040x amended return form See Transmittal for Form 1040 under Tax Return Filing Requirements and Payment of Tax, later. 1040x amended return form Administrative expense loss. 1040x amended return form   If the administrative expenses of the bankruptcy estate are more than its gross income for a tax year, the excess amount may be carried back 3 years and forward 7 years. 1040x amended return form The amounts can only be carried to a tax year of the estate and never to a debtor's tax year. 1040x amended return form The excess amount to be carried back or forward is treated like a net operating loss (NOL) and must first be carried back to the earliest year possible. 1040x amended return form For a discussion of NOLs, see Publication 536. 1040x amended return form Attribute carryovers. 1040x amended return form   The bankruptcy estate may use its tax attributes the same way that the debtor would have used them. 1040x amended return form These items are determined as of the first day of the debtor's tax year in which the bankruptcy case begins. 1040x amended return form The bankruptcy estate assumes the following tax attributes from the debtor: NOL carryovers, Carryovers of excess charitable contributions, Recovery of tax benefit items, Credit carryovers, Capital loss carryovers, Basis, holding period, and character of assets, Method of accounting, Passive activity loss and credit carryovers, Unused at-risk deductions, and Other tax attributes provided in the regulations. 1040x amended return form   Certain tax attributes of the bankruptcy estate must be reduced by the amount of income that was previously excluded as a result of cancellation of debt during the bankruptcy proceeding. 1040x amended return form See Debt Cancellation, later. 1040x amended return form   When the bankruptcy estate is terminated (for example, when the case ends), the debtor assumes any remaining tax attributes previously taken over by the bankruptcy estate. 1040x amended return form The debtor also generally assumes any of the tax attributes, listed above, that arose during the administration of the bankruptcy estate. 1040x amended return form Note. 1040x amended return form The debtor does not assume the bankruptcy estate's administrative expense losses because they cannot be used by an individual taxpayer filing Form 1040. 1040x amended return form See Administrative expense loss, above. 1040x amended return form Passive and at-risk activities. 1040x amended return form   For bankruptcy cases beginning after November 8, 1992, passive activity carryover losses and credits and unused at-risk deductions are treated as tax attributes passing from the debtor to the bankruptcy estate, which the estate then passes back to the debtor when the bankruptcy estate terminates. 1040x amended return form Additionally, transfers to the debtor (other than by sale or exchange) of interests in passive or at-risk activities are treated as non-taxable exchanges. 1040x amended return form These transfers include the return of exempt property and abandonment of estate property to the debtor. 1040x amended return form Carrybacks from the debtor's activities. 1040x amended return form   The debtor cannot carry back any NOL or credit carryback from a tax year ending after the bankruptcy case has begun to any tax year ending before the case began. 1040x amended return form Carrybacks from the bankruptcy estate. 1040x amended return form   If the bankruptcy estate has an NOL that did not pass to the estate from the debtor under the attribute carryover rules, the estate can carry the loss back not only to its own earlier tax years but also to the debtor's tax years before the year the bankruptcy case began. 1040x amended return form The estate may also carry back excess credits, such as the general business credit, to the pre-bankruptcy tax years. 1040x amended return form Tax Reporting – Chapter 11 Cases Allocation of income and credits on information returns and required statement for returns for individual chapter 11 cases. 1040x amended return form    In chapter 11 cases, when an employer issues a Form W-2 reporting all of the debtor's wages, salary, or other compensation for a calendar year, and a portion of the earnings represent post-petition services includible in the estate's gross income, the Form W-2 amounts must be allocated between the estate and the debtor. 1040x amended return form The debtor-in-possession or trustee must allocate the income amount reported in box 1 and the income tax withheld reported in box 2 between the debtor and the estate. 1040x amended return form These allocations must reflect that the debtor's gross earnings from post-petition services and gross income from post-petition property are, generally, includible in the estate's gross income and not the debtor's gross income. 1040x amended return form The debtor and trustee may use a simple percentage method to allocate income and income tax withheld. 1040x amended return form The same method must be used to allocate the income and the withheld tax. 1040x amended return form Example. 1040x amended return form If 20% of the wages reported on Form W-2 for a calendar year were earned after the commencement of the case and are included in the estate's gross income, 20% of the withheld income tax reported on Form W-2 must also be claimed as a credit on the estate's income tax return. 1040x amended return form Likewise, 80% of wages must be reported by the debtor and 80% of the income tax withheld must be claimed as a credit on the debtor's income tax return. 1040x amended return form See IRC section 31(a). 1040x amended return form   If information returns are issued to the debtor for gross income, gross proceeds, or other reportable payments that should have been reported to the bankruptcy estate, the debtor-in-possession or trustee must allocate the improperly reported income in a reasonable manner between the debtor and the estate. 1040x amended return form In general, the allocation must ensure that any income and income tax withheld attributable to the post-petition period is reported on the estate's return, and any income and income tax withheld attributable to the pre-petition period is reported on the debtor's return. 1040x amended return form    IRS Notice 2006-83 requires the debtor to attach a statement to his or her individual income tax return (Form 1040) stating that the return is filed subject to a chapter 11 bankruptcy case. 1040x amended return form The statement must also: Show the allocations of income and income tax withheld, Describe the method used to allocate income and income tax withheld, and List the filing date of the bankruptcy case, the bankruptcy court in which the case is pending, the bankruptcy court case number, and the bankruptcy estate's EIN. 1040x amended return form Note. 1040x amended return form The debtor-in-possession or trustee must attach a similar statement to the bankruptcy estate's income tax return (Form 1041). 1040x amended return form   The model Notice 2006-83 Statement, shown above, may be used by debtors, debtors-in-possession, and trustees to satisfy the reporting requirement. 1040x amended return form Self-employment taxes in individual chapter 11 cases. 1040x amended return form   IRC section 1401 imposes a tax upon the self-employment income, that is, the net earnings from self-employment of an individual. 1040x amended return form Net earnings from self-employment are equal to the gross income derived by an individual from any trade or business carried on by such individual, less deductions attributable to the business. 1040x amended return form   Neither section 1115 of the Bankruptcy Code nor IRC section 1398 addresses the application of self-employment tax to the post-petition earnings of the individual debtor. 1040x amended return form Therefore, if the debtor continues to derive gross income from the performance of services as a self-employed individual after the commencement of the bankruptcy case, the debtor must continue to report the debtor's self-employment income on Schedule SE (Form 1040) of the debtor's income tax return. 1040x amended return form This schedule includes self-employment income earned post-petition and the attributable deductions. 1040x amended return form The debtor must pay any self-employment tax imposed by IRC section 1401. 1040x amended return form Employment taxes and employer's obligation to file Form W-2 in individual chapter 11 cases. 1040x amended return form   In chapter 11 cases, post-petition wages earned by a debtor are generally treated as gross income of the estate. 1040x amended return form However, section 1115 of the Bankruptcy Code (11 U. 1040x amended return form S. 1040x amended return form C. 1040x amended return form section 1115) does not affect the determination of what are deemed wages for Federal Insurance Contributions Act (FICA) tax, Federal Unemployment Tax Act (FUTA) tax, or Federal Income Tax Withholding purposes. 1040x amended return form See Notice 2006-83. 1040x amended return form   The reporting and withholding obligations of a debtor's employer also do not change. 1040x amended return form An employer should continue to report the wages and tax withholding on a Form W-2 issued under the debtor's name and social security number. 1040x amended return form Notice to persons required to file information returns (other than Form W-2, Wage and Tax Statement) in individual chapter 11 cases. 1040x amended return form   Within a reasonable time after the commencement of a chapter 11 bankruptcy case, the trustee or debtor-in-possession should provide notification of the bankruptcy estate's EIN to all persons (or entities) that are required to file information returns for the bankruptcy estate's gross income, gross proceeds, or other types of reportable payments. 1040x amended return form See IRC section 6109(a)(2). 1040x amended return form As these payments are the property of the estate under section 1115 of the Bankruptcy Code, the payors should report the gross income, gross proceeds, or other reportable payments on the appropriate information return using the estate's name and EIN as required under the IRC and regulations (see IRC sections 6041 through 6049). 1040x amended return form   The trustee or debtor-in-possession should not, however, provide the EIN to a person (or entity) filing Form W-2 reporting the debtor's wages or other compensation, as section 1115 of the Bankruptcy Code does not affect the determination of what constitutes wages for purposes of federal income tax withholding or FICA. 1040x amended return form See Notice 2006-83. 1040x amended return form An employer should continue to report all wage income and tax withholding, both pre-petition and post-petition, on a Form W-2 to the debtor under the debtor's social security number. 1040x amended return form   The debtor in a chapter 11 case is not required to file a new Form W-4 with an employer solely because the debtor filed a chapter 11 case and the post-petition wages are includible in the estate's income and not the debtor's income. 1040x amended return form However, a new Form W-4 may be necessary if the debtor is no longer entitled to claim the same number of allowances previously claimed because certain deductions or credits now belong to the estate. 1040x amended return form See Employment Tax Regulations section 31. 1040x amended return form 3402(f)(2)-1. 1040x amended return form Additionally, the debtor may wish to file a new Form W-4 to increase the income tax withheld from post-petition wages allocated to the estate to avoid having to make estimated tax payments for the estate. 1040x amended return form See IRC section 6654(a). 1040x amended return form Notice required in converted and dismissed cases. 1040x amended return form   When a chapter 11 bankruptcy case is closed, dismissed, or converted to a chapter 12 or 13 case, the bankruptcy estate ends as a separate taxable entity. 1040x amended return form The debtor should, within a reasonable time, send notice of such event to the persons (or entities) previously notified of the bankruptcy case. 1040x amended return form This helps to ensure that gross income, proceeds, and other reportable payments realized after the event are reported to the debtor under the correct TIN rather than to the estate. 1040x amended return form   When a chapter 11 case is converted to a chapter 7 case, the bankruptcy estate will continue to exist as a separate taxable entity. 1040x amended return form Gross income (other than post-conversion income from the debtor's services), gross proceeds, or other reportable payments should continue to be reported to the estate if they are property of the chapter 7 estate. 1040x amended return form However, income from services performed by the debtor after conversion of the case to chapter 7 is not property of the chapter 7 estate. 1040x amended return form After the conversion, the debtor should notify payors required to report the debtor's nonemployee compensation that compensation earned after the conversion should be reported using the debtor's name and TIN, not the estate's name and EIN. 1040x amended return form Employment taxes. 1040x amended return form   The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. 1040x amended return form See Publication 15, Circular E, Employer's Tax Guide, for details on employer tax responsibilities. 1040x amended return form   The trustee also has the duty to prepare and file Forms W-2 for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. 1040x amended return form For a further discussion of employment taxes, see Employment Taxes, later. 1040x amended return form Notice 2006-83 Statement Pending Bankruptcy Case The taxpayer, , filed a bankruptcy petition under chapter 11 of the Bankruptcy Code in the bankruptcy court for the District of . 1040x amended return form The bankruptcy court case number is . 1040x amended return form Gross income, and withheld federal income tax, reported on Form W-2, Forms 1099, Schedule K-1, and other information returns received under the taxpayer's name and social security number (or other taxpayer identification number) are allocated between the taxpayer's TIN and the bankruptcy estate's EIN as follows, using [describe allocation method]:. 1040x amended return form   Year Taxpayer   Estate 1. 1040x amended return form Form W-2, Payor: $   $     Withheld income tax shown on Form W-2 $   $   2. 1040x amended return form Form 1099-INT Payor: $   $     Withheld income tax (if any) shown on Form 1099-INT $   $   3. 1040x amended return form Form 1099-DIV Payor: $   $     Withheld income tax (if any) shown on Form 1099-DIV $   $   4. 1040x amended return form Form 1099-MISC Payor: $   $     Withheld income tax (if any) shown on Form 1099-MISC $   $   Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Filing Requirements Filing threshold. 1040x amended return form   If the bankruptcy estate has gross income that meets or exceeds the minimum amount required for filing, the trustee or debtor-in-possession must file an income tax return on Form 1041. 1040x amended return form This amount is equal to the sum of the personal exemption amount plus the basic standard deduction for a married individual filing separately. 1040x amended return form   For 2012, the threshold filing amount for a bankruptcy estate is $9,750 (the sum of the $3,800 personal exemption plus the $5,950 standard deduction for married individuals filing separately). 1040x amended return form   These amounts are generally adjusted annually. 1040x amended return form See the present year Form 1041 Instructions at www. 1040x amended return form irs. 1040x amended return form gov/form1041 for the current dollar amounts. 1040x amended return form Accounting period. 1040x amended return form   A bankruptcy estate may have a fiscal year. 1040x amended return form However, this period cannot be longer than 12 months. 1040x amended return form Change of accounting period. 1040x amended return form   The bankruptcy estate may change its accounting period (tax year) once without IRS approval. 1040x amended return form This rule allows the bankruptcy trustee to close the estate's tax year early, before the expected termination of the bankruptcy estate. 1040x amended return form The trustee can then file a return for the first short tax year to get a quick determination of the estate's tax liability. 1040x amended return form Employer identification number. 1040x amended return form   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. 1040x amended return form The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. 1040x amended return form    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. 1040x amended return form   Obtain an EIN for a bankruptcy estate by applying: Online by clicking on the EIN link at www. 1040x amended return form irs. 1040x amended return form gov/businesses/small. 1040x amended return form The EIN is issued immediately once the application information is validated. 1040x amended return form By telephone at 1-800-829-4933 from 7:00 a. 1040x amended return form m. 1040x amended return form to 7:00 p. 1040x amended return form m. 1040x amended return form in the trustee's or debtor-in-possession's local time zone. 1040x amended return form Assistance provided to callers from Alaska and Hawaii will be based on the hours of operation in the Pacific time zone, or By mailing or faxing Form SS-4, Application for Employer Identification Number. 1040x amended return form   If the trustee or debtor-in-possession has not received the bankruptcy estate's EIN by the time the return is due, write “Applied for” and the date you applied in the space for the EIN. 1040x amended return form For more details, see Pub. 1040x amended return form 583, Starting a Business and Keeping Records. 1040x amended return form   Trustees representing ten or more bankruptcy estates (other than estates that will be filing employment or excise tax returns) may request a series or block of EINs. 1040x amended return form Figuring tax due. 1040x amended return form   The bankruptcy estate figures its taxable income the same way an individual figures taxable income. 1040x amended return form However, the estate uses the tax rates for a married individual filing separately to calculate the tax on its taxable income. 1040x amended return form The estate is entitled to one personal exemption and may either itemize deductions or take the basic standard deduction for a married individual filing a separate return. 1040x amended return form The estate cannot take the higher standard deduction allowed for married persons filing separately who are 65 or older or blind. 1040x amended return form Tax rate schedule. 1040x amended return form The tax on income for bankruptcy estates is calculated using the tax rate schedule for Married Individuals Filing Separately not the Estates and Trusts tax rate schedule. 1040x amended return form When to file. 1040x amended return form   Calendar year bankruptcy estates must file Form 1041 by April 15th. 1040x amended return form Fiscal year bankruptcy estates must file on or before the 15th day of the 4th month following the close of its tax year. 1040x amended return form For example, an estate that has a tax year that ends on June 30th must file Form 1041 by October 15th of the tax year. 1040x amended return form If the due date falls on a Saturday, Sunday, or legal holiday, file on the next business day. 1040x amended return form Note. 1040x amended return form The bankruptcy estate is allowed an automatic 6-month extension of time to file the bankruptcy estate tax return upon filing the required application, Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. 1040x amended return form Transmittal for Form 1040. 1040x amended return form   Form 1041 is used as a transmittal for Form 1040. 1040x amended return form If a return is required, the trustee or debtor-in-possession must complete the identification area at the top of Form 1041 and indicate the chapter under which the bankruptcy estate filed, either chapter 7 or chapter 11. 1040x amended return form   Prepare the bankruptcy estate's return by completing Form 1040. 1040x amended return form In the top margin of Form 1040, write “Attachment to Form 1041 —DO NOT DETACH. 1040x amended return form ” Then, attach Form 1040 to the Form 1041 transmittal. 1040x amended return form Enter the tax and payment amounts on lines 23 through 29 of Form 1041, then sign and date the return. 1040x amended return form An example of a bankruptcy estate's tax return is prepared below. 1040x amended return form Note. 1040x amended return form The filing of the bankruptcy estate's tax return does not relieve a debtor from the requirement to file his or her individual tax return on Form 1040. 1040x amended return form Payment of Tax Due Payment methods. 1040x amended return form   Payment of tax due may be made by check or money order or by credit or debit card. 1040x amended return form For information on how to make payments electronically by credit or debit card, go to irs. 1040x amended return form gov/e-pay. 1040x amended return form      Payments may also be made electronically using the Electronic Federal Tax Payment System (EFTPS), a free tax payment system that allows you to make payments online or by phone. 1040x amended return form To enroll in EFTPS, go to eftps. 1040x amended return form gov or call 1-800-555-4477. 1040x amended return form For more information see Publication 966, Electronic Federal Tax Payment System: A Guide to Getting Started. 1040x amended return form Payment voucher – Form 1041-V. 1040x amended return form   Form 1041-V accompanies payments made by check or money order for Form 1041. 1040x amended return form The voucher includes information about the bankruptcy estate, including the name of the bankruptcy estate, trustee, EIN, and amount due. 1040x amended return form Using Form 1041-V assists the IRS in processing the payment more accurately and efficiently. 1040x amended return form We recommend the use of Form 1041-V; however, there is no penalty if the voucher is not used. 1040x amended return form Estimated tax – Form 1041-ES. 1040x amended return form   In most cases, the trustee or debtor-in-possession must pay any required estimated tax due for the bankruptcy estate. 1040x amended return form See the Form 1041-ES Instructions for information on the minimum threshold amount required for filing Form 1041-ES, paying the estimated tax, and exceptions to filing. 1040x amended return form Employment Taxes The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. 1040x amended return form Until these employment taxes are deposited as required by the IRC, they should be set aside in a separate bank account to ensure that funds are available to satisfy the liability. 1040x amended return form If the employment taxes are not paid as required, the trustee may be held personally liable for payment of the taxes. 1040x amended return form   See Publication 15, (Circular E), Employer's Tax Guide, for details on employer tax responsibilities. 1040x amended return form Also see IRS Notice 931, Deposit Requirements for Employment Taxes, for details on the deposit rules, including the requirement that federal employment tax deposits be made by electronic funds transfer. 1040x amended return form The trustee also has a duty to prepare and file Forms W-2, Wage and Tax Statement, for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. 1040x amended return form If the debtor fails to prepare and file Forms W-2 for wages paid before bankruptcy, the trustee should instruct the employees to file a Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 1040x amended return form , with their individual income tax returns. 1040x amended return form Tax Return Example – Form 1041 This publication is not revised annually. 1040x amended return form Future changes to the forms and their instructions may not be reflected in this example. 1040x amended return form Note. 1040x amended return form The following return was prepared for tax year 2011. 1040x amended return form In 2011, the threshold filing amount for a bankruptcy estate was $9,500 (the sum of the $3,700 personal exemption plus the $5,800 standard deduction for married individuals filing separately). 1040x amended return form Facts and circumstances. 1040x amended return form   On December 15, 2010, Thomas Smith filed a bankruptcy petition under chapter 7. 1040x amended return form Joan Black was appointed trustee to administer the bankruptcy estate and to distribute the assets. 1040x amended return form   The estate received the following assets from Mr. 1040x amended return form Smith: A $100,000 certificate of deposit, Commercial rental real estate with a fair market value (FMV) of $280,000, and His personal residence with an FMV of $200,000. 1040x amended return form   Also, the estate received a $251,500 capital loss carryover. 1040x amended return form   Mr. 1040x amended return form Smith's bankruptcy case was closed on December 31, 2011. 1040x amended return form During 2011, Mr. 1040x amended return form Smith was relieved of $70,000 of debt by the bankruptcy court. 1040x amended return form The estate chose a calendar year as its tax year. 1040x amended return form Joan, the trustee, reviews the estate's transactions and reports the taxable events on the estate's final return. 1040x amended return form Schedule B (Form 1040). 1040x amended return form    The certificate of deposit earned $5,500 of interest during 2011. 1040x amended return form Joan reports this interest on Schedule B. 1040x amended return form She completes this schedule and enters the result on Form 1040. 1040x amended return form Form 4562. 1040x amended return form   Joan enters the depreciation allowed on Form 4562. 1040x amended return form She completes the form and enters the result on Schedule E. 1040x amended return form Schedule E (Form 1040). 1040x amended return form   The commercial real estate was rented through the date of sale. 1040x amended return form Joan reports the income and expenses on Schedule E. 1040x amended return form She enters the net income on Form 1040. 1040x amended return form Form 4797. 1040x amended return form   The commercial real estate was sold on July 1, 2011, for $280,000. 1040x amended return form The property was purchased in 2001 at a cost of $250,000. 1040x amended return form The total depreciation allowable as of the date of sale was $120,000. 1040x amended return form Additionally, $25,000 of selling expenses were incurred. 1040x amended return form Joan reports the gain or loss from the sale on Form 4797. 1040x amended return form She completes the form and enters the gain on Schedule D (Form 1040). 1040x amended return form   Mr. 1040x amended return form Smith's former residence was sold on September 30, 2011. 1040x amended return form The sale price was $200,000, the selling expenses were $20,000, and his adjusted basis was $130,000. 1040x amended return form This sale is excluded from gross income under IRC section 121. 1040x amended return form Note. 1040x amended return form Gains from the sale of personal residences are excluded from gross income up to $250,000 under IRC section 121 ($500,000 for married couples filing a joint return). 1040x amended return form Bankruptcy estates succeed to this exclusion at the commencement of the case. 1040x amended return form See Regulation section 1. 1040x amended return form 1398-3. 1040x amended return form Schedule D (Form 1040). 1040x amended return form   Joan completes Schedule D, taking into account the $250,000 capital loss carryover from 2010 ($251,500 transferred to the estate minus $1,500 used on the estate's 2010 return). 1040x amended return form She enters the results on Form 1040. 1040x amended return form Form 1040, page 1. 1040x amended return form   Joan completes page 1 of the Form 1040 and enters the adjusted gross income on the first line of Form 1040, page 2. 1040x amended return form Schedule A (Form 1040). 1040x amended return form   During 2011, the estate paid mortgage interest and real property tax on Mr. 1040x amended return form Smith's former residence. 1040x amended return form It also paid income tax to the state. 1040x amended return form Joan enters the mortgage interest, real estate tax, and income tax on Schedule A. 1040x amended return form Also, she reports the bankruptcy estate's administrative expenses as a miscellaneous deduction not subject to the 2% floor on miscellaneous itemized deductions. 1040x amended return form She completes the Schedule A and enters the result on page 2 of Form 1040. 1040x amended return form Form 1040, page 2. 1040x amended return form   Joan determines the estate's taxable income and figures its tax using the tax rate schedule for married filing separately. 1040x amended return form She then enters the estate's estimated tax payments and figures the amount the estate still owes. 1040x amended return form Form 982. 1040x amended return form   Joan completes the Schedule D Tax Worksheet to figure the capital loss carryover. 1040x amended return form Because $70,000 of debt was canceled, Joan must reduce the tax attributes of the estate by the amount of the canceled debt. 1040x amended return form See Debt Cancellation, later. 1040x amended return form After the bankruptcy case ends, Mr. 1040x amended return form Smith will assume the estate's tax attributes. 1040x amended return form Mr. 1040x amended return form Smith will assume a capital loss carryover of $53,500 ($123,500 carryover minus the $70,000 attribute reduction) for use in preparation of his individual tax return (Form 1040). 1040x amended return form Note. 1040x amended return form If the bankruptcy estate had continued, the capital loss carryover would be available to the bankruptcy estate for the 2012 tax year. 1040x amended return form Form 1041. 1040x amended return form   Joan enters the total tax, estimated tax payments, and tax due from Form 1040 on Form 1041. 1040x amended return form She completes the identification area at the top of Form 1041, then signs and dates the return as the trustee on behalf of the bankruptcy estate. 1040x amended return form This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Form 1040 - page 1 This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Form 1040 - page 2 This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Schedule A This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Schedule B This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Schedule D This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Schedule E This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Form 4797 - page 1 This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Form 2119 This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Form 4797 - page 2 This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Form 4562 This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Capital Loss Carryover Worksheet This image is too large to be displayed in the current screen. 1040x amended return form Please click the link to view the image. 1040x amended return form Sample Form 982 Capital Loss Carryover Worksheet—Lines 6 and 14 Use this worksheet to figure your capital loss carryovers from 2010 to 2011 if your 2010 Schedule D, line 21, is a loss and (a) that loss is a smaller loss than the loss on your 2010 Schedule D, line 16, or (b) the amount on your 2010 Form 1040, line 41 (or your 2010 Form 1040NR, line 38, if applicable) is less than zero. 1040x amended return form Otherwise, you do not have any carryovers. 1040x amended return form 1. 1040x amended return form Enter the amount from your 2010 Form 1040, line 41, or Form 1040NR, line 38. 1040x amended return form If a loss, enclose the amount in parentheses 1. 1040x amended return form 19,880   2. 1040x amended return form Enter the loss from your 2010 Schedule D, line 21, as a positive amount 2. 1040x amended return form 1,500   3. 1040x amended return form Combine lines 1 and 2. 1040x amended return form If zero or less, enter -0- 3. 1040x amended return form 21,380   4. 1040x amended return form Enter the smaller of line 2 or line 3 4. 1040x amended return form 1,500     If line 7 of your 2010 Schedule D is a loss, go to line 5; otherwise, enter -0- on line 5 and go to line 9. 1040x amended return form       5. 1040x amended return form Enter the loss from your 2010 Schedule D, line 7, as a positive amount 5. 1040x amended return form 0   6. 1040x amended return form Enter any gain from your 2010 Schedule D, line 15. 1040x amended return form If a loss, enter -0- 6. 1040x amended return form         7. 1040x amended return form Add lines 4 and 6 7. 1040x amended return form 1,500   8. 1040x amended return form Short-term capital loss carryover for 2011. 1040x amended return form Subtract line 7 from line 5. 1040x amended return form If zero or less, enter -0-. 1040x amended return form If more than zero, also enter this amount on Schedule D, line 6 8. 1040x amended return form 0     If line 15 of your 2010 Schedule D is a loss, go to line 9; otherwise, skip lines 9 through 13. 1040x amended return form       9. 1040x amended return form Enter the loss from your 2010 Schedule D, line 15, as a positive amount 9. 1040x amended return form 251,500   10. 1040x amended return form Enter any gain from your 2010 Schedule D, line 7. 1040x amended return form If a loss, enter -0- 10. 1040x amended return form 0       11. 1040x amended return form Subtract line 5 from line 4. 1040x amended return form If zero or less, enter -0- 11. 1040x amended return form 1,500       12. 1040x amended return form Add lines 10 and 11 12. 1040x amended return form 1,500   13. 1040x amended return form Long-term capital loss carryover for 2011. 1040x amended return form Subtract line 12 from line 9. 1040x amended return form If zero or less, enter -0-. 1040x amended return form If more than zero, also enter this amount on Schedule D, line 14 13. 1040x amended return form 250,000                       Partnerships and Corporations Filing Requirements A separate taxable estate is not created when a partnership or corporation files a bankruptcy petition and their tax return filing requirements do not change. 1040x amended return form The debtor-in-possession, court appointed trustee, assignee, or receiver must file the entity's income tax returns on Form 1065, Form 1120 or, Form 1120S. 1040x amended return form In cases where a trustee or receiver is not appointed, the debtor-in-possession continues business operations and remains in possession of the business' property during the bankruptcy proceeding. 1040x amended return form The debtor-in-possession, rather than the general partner of a partnership or corporate officer of a corporation, assumes the fiduciary responsibility to file the business' tax returns. 1040x amended return form Partnerships The filing requirements for a partnership in a bankruptcy proceeding do not change. 1040x amended return form However, the responsibility to file the required returns becomes that of the court appointed trustee, receiver, or debtor-in-possession. 1040x amended return form A partnership's debt that is canceled as a result of the bankruptcy proceeding is not included in the partnership's income. 1040x amended return form However, It may or may not be included in the individual partners' income. 1040x amended return form See Partnerships, below under Debt Cancellation. 1040x amended return form Corporations The filing requirements for a corporation in a bankruptcy proceeding also do not change. 1040x amended return form A bankruptcy trustee, receiver, or debtor-in-possession, having possession of or holding title to substantially all of the property or business operations of the debtor corporation, must file the debtor's corporate income tax return for the tax year. 1040x amended return form The following discussion only highlights bankruptcy tax rules applying to corporations. 1040x amended return form The complex details of corporate bankruptcy reorganizations are beyond the scope of this publication. 1040x amended return form Therefore, you may wish to seek the help of a professional tax advisor. 1040x amended return form See Corporations under Debt Cancellation for information about a corporation's debt canceled in a bankruptcy proceeding. 1040x amended return form Tax-Free Reorganizations The tax-free reorganization provisions of the Internal Revenue Code allow a corporation to transfer all or part of its assets to another corporation in a bankruptcy under title 11 of the United States Code or in a similar case. 1040x amended return form However, under the reorganization plan, the stock or securities of the corporation to which the assets are transferred must be distributed in a transaction that qualifies under IRC section 354, 355, or 356. 1040x amended return form A “similar case” includes a receivership, foreclosure, or other similar proceeding in a federal or state court. 1040x amended return form In these cases, any party to the reorganization must be under the jurisdiction of the court and the transfer of assets under the plan of reorganization must be approved by the court. 1040x amended return form In a receivership, foreclosure, or similar proceeding before a federal or state agency involving certain financial institutions, the agency is treated as a court. 1040x amended return form Generally, IRC section 354 provides that no gain or loss is recognized if a corporation's stock is exchanged solely for stock or securities in a corporation that is a party to the reorganization under a qualifying reorganization plan. 1040x amended return form In this case, shareholders in the bankrupt corporation would recognize no gain or loss if they exchange their stock solely for stock or securities of the corporation acquiring the bankrupt corporation's assets. 1040x amended return form IRC section 355 generally provides that no gain or loss is recognized by a shareholder if a corporation distributes solely stock or securities of another corporation that the distributing corporation controls immediately before the distribution. 1040x amended return form IRC section 356 allows tax-free exchanges in situations that would qualify under IRC section 354 or 355, except that other property or money, in addition to the permitted stock or securities, is received by the shareholder. 1040x amended return form In this situation, gain is recognized by the shareholder, but only to the extent of the money and the FMV of the other property received. 1040x amended return form No loss is recognized in this situation. 1040x amended return form Exemption from tax return filing A trustee, receiver, or assignee of a corporation in bankruptcy, receivership, or in the process of dissolving, may apply to the IRS for relief from filing federal income tax returns for the corporation. 1040x amended return form To qualify, the corporation must have ceased business operations and have no assets nor income for the tax year. 1040x amended return form The exemption request must be submitted to the local IRS Insolvency Office handling the case. 1040x amended return form The request to the IRS must include the name, address, and EIN of the corporation and a statement of the facts (with any supporting documents) showing why the debtor needs relief from the filing requirements. 1040x amended return form The request must also include the following statement: “I hereby request relief from filing federal income tax returns for tax years ending _____ for the above-named corporation and declare under penalties of perjury that to the best of my knowledge and belief the information contained herein is correct. 1040x amended return form ” The statement must be signed by the trustee, receiver or assignee. 1040x amended return form The statement must also include notice of appointment to act on behalf of the corporation (this is not required for bankruptcy trustees or debtors-in-possession). 1040x amended return form The IRS will act on your request within 90 days. 1040x amended return form Disclosure of return information to trustee. 1040x amended return form   Upon written request, current and earlier returns of the debtor are open to inspection by or disclosure to the trustee or receiver. 1040x amended return form However, in bankruptcy cases other than those of individuals filing under chapter 7 or 11, such as a corporate bankruptcy, the IRS must find that the trustee has a material interest that will be affected by information on the return. 1040x amended return form Material interest is generally defined as a financial or monetary interest. 1040x amended return form Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. 1040x amended return form Receiverships Court-established receiverships sometimes arise in connection with bankruptcies. 1040x amended return form Certain court-established receiverships should be treated as qualified settlement funds ("QSFs") for purposes of IRC section 468B and the underlying Treasury Regulations. 1040x amended return form QSFs are required to file an annual income tax return, Form 1120-SF, U. 1040x amended return form S. 1040x amended return form Income Tax Return for Settlement Funds. 1040x amended return form More information about QSFs may be found in Treasury Regulation sections 1. 1040x amended return form 468B-1 through -5. 1040x amended return form Determination of Tax The determination of the proper amount of tax due for a tax year begins with the bankruptcy estate's filing of Form 1041, and the individual debtor's filing of Form 1040, or for bankrupt entities filing Forms 1065, 1120, or 1120S. 1040x amended return form After a return is filed, the IRS will either accept the return as filed or select the return for examination. 1040x amended return form Under examination the IRS may redetermine the tax liability shown on the return. 1040x amended return form If the bankruptcy estate or debtor disagrees with the redetermined tax due, the tax as redetermined by the IRS may be contested in the bankruptcy court, or Tax Court, as applicable. 1040x amended return form See Court Jurisdiction over Tax Matters, later. 1040x amended return form Prompt Determination Requests Pursuant to Rev. 1040x amended return form Proc. 1040x amended return form 2006-24, 2006-22 I. 1040x amended return form R. 1040x amended return form B. 1040x amended return form 943, www. 1040x amended return form irs. 1040x amended return form gov/irb/2006-22_IRB/ar12, as modified by Announcement 2011-77, www. 1040x amended return form irs. 1040x amended return form gov/irb/2011-51_IRB/ar13, the bankruptcy trustee may request a determination of any unpaid tax liability incurred by the bankruptcy estate during the administration of the case, by filing a tax return and a request for such determination with the IRS. 1040x amended return form Unless the return is fraudulent or contains a material misrepresentation, the estate, trustee, debtor, and any successor to the debtor are discharged from liability upon payment of the tax: As determined by the IRS, As determined by the bankruptcy court, after completion of the IRS examination, or As shown on the return, if the IRS does not: Notify the trustee within 60 days after the request for determination that the return has been selected for examination, or Complete the examination and notify the trustee of any tax due within 180 days after the request (or any additional time permitted by the bankruptcy court). 1040x amended return form Making the request for determination. 1040x amended return form   As detailed in Rev. 1040x amended return form Proc. 1040x amended return form 2006-24, as modified by Announcement 2011-77, to request a prompt determination of any unpaid tax liability of the estate, the trustee must file a signed written request, in duplicate, with the Internal Revenue Service, Centralized Insolvency Operation, P. 1040x amended return form O. 1040x amended return form Box 7346, Philadelphia, PA 19101–7346 (marked “Request for Prompt Determination”). 1040x amended return form   The request must be submitted in duplicate and must be executed under penalties of perjury. 1040x amended return form In addition, the trustee must submit along with the request an exact copy of the return(s) filed by the trustee with the IRS for each completed tax period. 1040x amended return form The request must contain the following information: A statement indicating that it is a Request for Prompt Determination of Tax Liability, specifying the type of return and tax period for each return being filed. 1040x amended return form The name and location of the office where the return was filed. 1040x amended return form The name of the debtor. 1040x amended return form Debtor's social security number, TIN, or EIN. 1040x amended return form Type of bankruptcy estate. 1040x amended return form Bankruptcy case number. 1040x amended return form Court where the bankruptcy case is pending. 1040x amended return form   The copy of the return(s) submitted with the request must be an exact copy of a valid return. 1040x amended return form A request for prompt determination will be considered incomplete and returned to the trustee if it is filed with a copy of a document that does not qualify as a valid return. 1040x amended return form    To qualify as valid, a return must meet certain criteria, including a signature under penalties of perjury. 1040x amended return form A document filed by the trustee with the jurat stricken, deleted, or modified will not qualify as a valid return. 1040x amended return form Examination of return. 1040x amended return form   The IRS will notify the trustee within 60 days from receipt of the request whether the return filed by the trustee has been selected for examination or has been accepted as filed. 1040x amended return form If the return is selected for examination, it will be examined as soon as possible. 1040x amended return form The IRS will notify the trustee of any tax due within 180 days from receipt of the application or within any additional time permitted by the bankruptcy court. 1040x amended return form   If a prompt determination request is incomplete, all the documents received by the IRS will be returned to the trustee by the assigned Field Insolvency Office with an explanation identifying the missing item(s) and instructions to re-file the request once corrected. 1040x amended return form   Once corrected, the request must be filed with the IRS at the Field Insolvency Office address specified in the correspondence accompanying the returned incomplete request. 1040x amended return form   In the case of an incomplete request submitted with a copy of an invalid return document, the trustee must file a valid original return with the appropriate IRS office and submit a copy of that return with the corrected request when the request is re-filed. 1040x amended return form Note. 1040x amended return form An incomplete request includes those submitted with a copy of a return form, the original of which does not qualify as a valid return. 1040x amended return form   The 60-day period to notify the trustee whether the return is accepted as filed or has been selected for examination does not begin to run until a complete request package is recei
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Fraudulent email posing as the IRS 'Office of Professional Responsibility'

Nov. 10, 2011:
There is a phishing email risk you need to be aware of. It is a message claiming to be from the IRS Office of Professional Responsibility.

What to look for:

  • The subject line contains the text Acquire new EIN.
  • The body of the message instructs the recipient to obtain a new Employer Identification Number in connection with fraudulent actions on your behalf.
    • (Note that the text in the subject line and/or body of the message may read differently, but the message is similar.)

What to do if you receive such a message:

  1. Do not reply to the sender, access links contained in the email or submit any information 
  2. Forward the message as-is immediately to us at phishing@irs.gov
  3. Review How to report and identify phishing, email scams and bogus IRS websites
  4. If you receive a suspicious email or discover a website posing as the IRS, please forward the email or URL information to the IRS at phishing@irs.gov.

Remember
The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

Page Last Reviewed or Updated: 24-Mar-2014

The 1040x Amended Return Form

1040x amended return form Publication 721 - Main Content Table of Contents Part I General InformationRefund of Contributions Tax Withholding and Estimated Tax Filing Requirements Part II Rules for RetireesAnnuity starting date. 1040x amended return form Gross monthly rate. 1040x amended return form Your cost. 1040x amended return form Choosing a survivor annuity after retirement. 1040x amended return form Canceling a survivor annuity after retirement. 1040x amended return form Annuity starting date after 1986. 1040x amended return form Annuity starting date before 1987. 1040x amended return form Simplified Method General Rule Three-Year Rule Alternative Annuity Option Federal Gift Tax Retirement During the Past Year Reemployment After Retirement Nonresident Aliens Thrift Savings Plan Rollover Rules Distributions Used To Pay Insurance Premiums for Public Safety Officers How To Report Benefits Part III Rules for Disability Retirement and Credit for the Elderly or the DisabledDisability Annuity Other Benefits Credit for the Elderly or the Disabled Part IV Rules for Survivors of Federal EmployeesFERS Death Benefit CSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Thrift Savings Plan Federal Estate Tax Part V Rules for Survivors of Federal RetireesCSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Voluntary Contributions Thrift Savings Plan Federal Estate Tax Income Tax Deduction for Estate Tax Paid How To Get Tax HelpLow Income Taxpayer Clinics Part I General Information This part of the publication contains information that can apply to most recipients of civil service retirement benefits. 1040x amended return form Refund of Contributions If you leave federal government service or transfer to a job not under the CSRS or FERS and you are not eligible for an immediate annuity, you can choose to receive a refund of the money in your CSRS or FERS retirement account. 1040x amended return form The refund will include both regular and voluntary contributions you made to the fund, plus any interest payable. 1040x amended return form If the refund includes only your contributions, none of the refund is taxable. 1040x amended return form If it includes any interest, the interest is taxable unless you roll it over directly into another qualified plan or a traditional individual retirement arrangement (IRA). 1040x amended return form If you do not have the Office of Personnel Management (OPM) transfer the interest to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. 1040x amended return form See Rollover Rules in Part II for information on how to make a rollover. 1040x amended return form Interest is not paid on contributions to the CSRS for service after 1956 unless your service was for more than 1 year but not more than 5 years. 1040x amended return form Therefore, many employees who withdraw their contributions under the CSRS do not get interest and do not owe any tax on their refund. 1040x amended return form If you do not roll over interest included in your refund, it may qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040x amended return form If you separate from service before the calendar year in which you reach age 55, it may be subject to an additional 10% tax on early distributions. 1040x amended return form For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040x amended return form A lump-sum distribution is eligible for capital gain treatment or the 10-year tax option only if the plan participant was born before January 2, 1936. 1040x amended return form Tax Withholding and Estimated Tax The CSRS or FERS annuity you receive is subject to federal income tax withholding, unless you choose not to have tax withheld. 1040x amended return form OPM will tell you how to make the choice. 1040x amended return form The choice for no withholding remains in effect until you change it. 1040x amended return form These withholding rules also apply to a disability annuity, whether received before or after minimum retirement age. 1040x amended return form If you choose not to have tax withheld, or if you do not have enough tax withheld, you may have to make estimated tax payments. 1040x amended return form You may owe a penalty if the total of your withheld tax and estimated tax does not cover most of the tax shown on your return. 1040x amended return form Generally, you will owe the penalty for 2014 if the additional tax you must pay with your return is $1,000 or more and more than 10% of the tax to be shown on your 2014 return. 1040x amended return form For more information, including exceptions to the penalty, see chapter 4 of Publication 505, Tax Withholding and Estimated Tax. 1040x amended return form Form CSA 1099R. 1040x amended return form   Form CSA 1099R is mailed to you by OPM each year. 1040x amended return form It will show any tax you had withheld. 1040x amended return form File a copy of Form CSA 1099R with your tax return if any federal income tax was withheld. 1040x amended return form    You also can view and download your Form CSA 1099R by visiting the OPM website at  www. 1040x amended return form servicesonline. 1040x amended return form opm. 1040x amended return form gov. 1040x amended return form To log in, you will need your retirement CSA claim number and your personal identification number. 1040x amended return form Choosing no withholding on payments outside the United States. 1040x amended return form   The choice for no withholding generally cannot be made for annuity payments to be delivered outside the United States and its possessions. 1040x amended return form   To choose no withholding if you are a U. 1040x amended return form S. 1040x amended return form citizen or resident alien, you must provide OPM with your home address in the United States or its possessions. 1040x amended return form Otherwise, OPM has to withhold tax. 1040x amended return form For example, OPM must withhold if you provide a U. 1040x amended return form S. 1040x amended return form address for a nominee, trustee, or agent (such as a bank) to whom the benefits are to be delivered, but you do not provide your own U. 1040x amended return form S. 1040x amended return form home address. 1040x amended return form   If you do not provide a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to OPM that you are not a U. 1040x amended return form S. 1040x amended return form citizen, a U. 1040x amended return form S. 1040x amended return form resident alien, or someone who left the United States to avoid tax. 1040x amended return form But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. 1040x amended return form For details, see Publication 519, U. 1040x amended return form S. 1040x amended return form Tax Guide for Aliens. 1040x amended return form Withholding certificate. 1040x amended return form   If you give OPM a Form W-4P-A, Election of Federal Income Tax Withholding, you can choose not to have tax withheld or you can choose to have tax withheld. 1040x amended return form The amount of tax withheld depends on your marital status, the number of withholding allowances, and any additional amount you designate to be withheld. 1040x amended return form If you do not make either of these choices, OPM must withhold as if you were married with three withholding allowances. 1040x amended return form To change the amount of tax withholding or to stop withholding, call OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040x amended return form C. 1040x amended return form calling area must call 202-606-0500). 1040x amended return form No special form is needed. 1040x amended return form You will need your retirement CSA or CSF claim number, your social security number, and your personal identification number (PIN) when you call. 1040x amended return form If you have TTY/TDD equipment, call 1-855–887–4957. 1040x amended return form If you need a PIN, call OPM's Retirement Information Office. 1040x amended return form You also can change the amount of withholding or stop withholding online by visiting the OPM website at www. 1040x amended return form servicesonline. 1040x amended return form opm. 1040x amended return form gov. 1040x amended return form You will need your retirement CSA or CSF claim number and your PIN. 1040x amended return form Withholding from certain lump-sum payments. 1040x amended return form   If you leave the federal government before becoming eligible to retire and you apply for a refund of your CSRS or FERS contributions, or you die without leaving a survivor eligible for an annuity, you or your beneficiary will receive a distribution of your contributions to the retirement plan plus any interest payable. 1040x amended return form Tax will be withheld at a 20% rate on the interest distributed. 1040x amended return form However, tax will not be withheld if you have OPM transfer (roll over) the interest directly to your traditional IRA or other qualified plan. 1040x amended return form If you have OPM transfer (roll over) the interest directly to a Roth IRA, the entire amount will be taxed in the current year. 1040x amended return form Because no income tax will be withheld at the time of the transfer, you may want to increase your withholding or pay estimated taxes. 1040x amended return form See Rollover Rules in Part II. 1040x amended return form If you receive only your contributions, no tax will be withheld. 1040x amended return form Withholding from Thrift Savings Plan payments. 1040x amended return form   Generally, a distribution that you receive from the TSP is subject to federal income tax withholding. 1040x amended return form The amount withheld is: 20% if the distribution is an eligible rollover distribution, 10% if it is a nonperiodic distribution other than an eligible rollover distribution, or An amount determined as if you were married with three withholding allowances, unless you submit a withholding certificate (Form W-4P), if it is a periodic distribution. 1040x amended return form  However, you usually can choose not to have tax withheld from TSP payments other than eligible rollover distributions. 1040x amended return form By January 31 after the end of the year in which you receive a distribution, the TSP will issue Form 1099-R showing the total distributions you received in the prior year and the amount of tax withheld. 1040x amended return form   For a detailed discussion of withholding on distributions from the TSP, see Important Tax Information About Payments From Your TSP Account, available from your agency personnel office or from the TSP. 1040x amended return form The above document is also available in the “Forms & Publications” section of the TSP website at www. 1040x amended return form tsp. 1040x amended return form gov. 1040x amended return form Estimated tax. 1040x amended return form   Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 (after subtracting your withholding and credits) and you expect your withholding and your credits to be less than the smaller of: 90% of the tax to be shown on your income tax return for 2014, or 100% of the tax shown on your 2013 income tax return (110% of that amount if the adjusted gross income shown on the return was more than $150,000 ($75,000 if your filing status for 2014 will be married filing separately)). 1040x amended return form The return must cover all 12 months. 1040x amended return form   You do not have to pay estimated tax for 2014 if you were a U. 1040x amended return form S. 1040x amended return form citizen or resident alien for all of 2013 and you had no tax liability for the full 12-month 2013 tax year. 1040x amended return form   Publication 505 contains information that you can use to help you figure your estimated tax payments. 1040x amended return form Filing Requirements If your gross income, including the taxable part of your annuity, is less than a certain amount, you generally do not have to file a federal income tax return for that year. 1040x amended return form The gross income filing requirements for the tax year are in the instructions to Form 1040, 1040A, or 1040EZ. 1040x amended return form Children. 1040x amended return form   If you are the surviving spouse of a federal employee or retiree and your monthly annuity check includes a survivor annuity for one or more children, each child's annuity counts as his or her own income (not yours) for federal income tax purposes. 1040x amended return form   If your child can be claimed as a dependent, treat the taxable part of his or her annuity as unearned income when applying the filing requirements for dependents. 1040x amended return form Form CSF 1099R. 1040x amended return form   Form CSF 1099R will be mailed to you by January 31 after the end of each tax year. 1040x amended return form It will show the total amount of the annuity you received in the past year. 1040x amended return form It also should show, separately, the survivor annuity for a child or children. 1040x amended return form Only the part that is each individual's survivor annuity should be shown on that individual's Form 1040 or 1040A. 1040x amended return form   If your Form CSF 1099R does not show separately the amount paid to you for a child or children, attach a statement to your return, along with a copy of Form CSF 1099R, explaining why the amount shown on the tax return differs from the amount shown on Form CSF 1099R. 1040x amended return form    You also can view and download your Form CSF 1099R by visiting the OPM website at  www. 1040x amended return form servicesonline. 1040x amended return form opm. 1040x amended return form gov. 1040x amended return form To log in you will need your retirement CSF claim number and personal identification number. 1040x amended return form    You may request a Summary of Payments, showing the amounts paid to you for your child(ren), from OPM by calling OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040x amended return form C. 1040x amended return form calling area must call 202-606-0500). 1040x amended return form You will need your CSF claim number and your social security number when you call. 1040x amended return form Taxable part of annuity. 1040x amended return form   To find the taxable part of a retiree's annuity when applying the filing requirements, see the discussion in Part II, Rules for Retirees , or Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled , whichever applies. 1040x amended return form To find the taxable part of each survivor annuity when applying the filing requirements, see the discussion in Part IV, Rules for Survivors of Federal Employees , or Part V, Rules for Survivors of Federal Retirees , whichever applies. 1040x amended return form Part II Rules for Retirees This part of the publication is for retirees who retired on nondisability retirement. 1040x amended return form If you retired on disability before you reached your minimum retirement age, see Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled. 1040x amended return form However, on the day after you reach your minimum retirement age, use the rules in this section to report your disability retirement and begin recovering your cost. 1040x amended return form Annuity statement. 1040x amended return form   The statement you received from OPM when your CSRS or FERS annuity was approved shows the commencing date (the annuity starting date), the gross monthly rate of your annuity benefit, and your total contributions to the retirement plan (your cost). 1040x amended return form You will use this information to figure the tax-free recovery of your cost. 1040x amended return form Annuity starting date. 1040x amended return form   If you retire from federal government service on a regular annuity, your annuity starting date is the commencing date on your annuity statement from OPM. 1040x amended return form If something delays payment of your annuity, such as a late application for retirement, it does not affect the date your annuity begins to accrue or your annuity starting date. 1040x amended return form Gross monthly rate. 1040x amended return form   This is the amount you were to get after any adjustment for electing a survivor's annuity or for electing the lump-sum payment under the alternative annuity option (if either applied) but before any deduction for income tax withholding, insurance premiums, etc. 1040x amended return form Your cost. 1040x amended return form   Your monthly annuity payment contains an amount on which you have previously paid income tax. 1040x amended return form This amount represents part of your contributions to the retirement plan. 1040x amended return form Even though you did not receive the money that was contributed to the plan, it was included in your gross income for federal income tax purposes in the years it was taken out of your pay. 1040x amended return form   The cost of your annuity is the total of your contributions to the retirement plan, as shown on your annuity statement from OPM. 1040x amended return form If you elected the alternative annuity option, it includes any deemed deposits and any deemed redeposits that were added to your lump-sum credit. 1040x amended return form (See Lump-sum credit under Alternative Annuity Option, later. 1040x amended return form )   If you repaid contributions that you had withdrawn from the retirement plan earlier, or if you paid into the plan to receive full credit for service not subject to retirement deductions, the entire repayment, including any interest, is a part of your cost. 1040x amended return form You cannot claim an interest deduction for any interest payments. 1040x amended return form You cannot treat these payments as voluntary contributions; they are considered regular employee contributions. 1040x amended return form Recovering your cost tax free. 1040x amended return form   How you figure the tax-free recovery of the cost of your CSRS or FERS annuity depends on your annuity starting date. 1040x amended return form If your annuity starting date is before July 2, 1986, either the Three-Year Rule or the General Rule (both discussed later) applies to your annuity. 1040x amended return form If your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method (discussed later). 1040x amended return form If your annuity starting date is after November 18, 1996, you must use the Simplified Method. 1040x amended return form   Under both the General Rule and the Simplified Method, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your cost, and the taxable part that is the amount of each payment that is more than the part that represents your cost (unless such payment is used for purposes discussed under Distributions Used To Pay Insurance Premiums for Public Safety Officers , later). 1040x amended return form The tax-free part is a fixed dollar amount. 1040x amended return form It remains the same, even if your annuity is increased. 1040x amended return form Generally, this rule applies as long as you receive your annuity. 1040x amended return form However, see Exclusion limit , later. 1040x amended return form Choosing a survivor annuity after retirement. 1040x amended return form    If you retired without a survivor annuity and report your annuity under the Simplified Method, do not change your tax-free monthly amount even if you later choose a survivor annuity. 1040x amended return form   If you retired without a survivor annuity and report your annuity under the General Rule, you must figure the tax-free part of your annuity using a new exclusion percentage if you later choose a survivor annuity and take reduced annuity payments. 1040x amended return form To figure the new exclusion percentage, reduce your cost by the amount you previously recovered tax free. 1040x amended return form Figure the expected return as of the date the reduced annuity begins. 1040x amended return form For details on the General Rule, see Publication 939. 1040x amended return form Canceling a survivor annuity after retirement. 1040x amended return form   If you retired with a survivor annuity payable to your spouse upon your death and you notify OPM that your marriage has ended, your annuity might be increased to remove the reduction for a survivor benefit. 1040x amended return form The increased annuity does not change the cost recovery you figured at the annuity starting date. 1040x amended return form The tax-free part of each annuity payment remains the same. 1040x amended return form    For more information about choosing or canceling a survivor annuity after retirement, contact OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040x amended return form C. 1040x amended return form calling area must call 202-606-0500). 1040x amended return form Exclusion limit. 1040x amended return form   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. 1040x amended return form Annuity starting date after 1986. 1040x amended return form   If your annuity starting date is after 1986, the total amount of annuity income that you (or the survivor annuitant) can exclude over the years as a return of your cost cannot exceed your total cost. 1040x amended return form Annuity payments you or your survivors receive after the total cost in the plan has been recovered are generally fully taxable. 1040x amended return form Example. 1040x amended return form Your annuity starting date is after 1986 and you exclude $100 a month under the Simplified Method. 1040x amended return form If your cost is $12,000, the exclusion ends after 10 years (120 months). 1040x amended return form Thereafter, your entire annuity is generally fully taxable. 1040x amended return form Annuity starting date before 1987. 1040x amended return form   If your annuity starting date is before 1987, you can continue to take your monthly exclusion figured under the General Rule or Simplified Method for as long as you receive your annuity. 1040x amended return form If you chose a joint and survivor annuity, your survivor can continue to take that same exclusion. 1040x amended return form The total exclusion may be more than your cost. 1040x amended return form Deduction of unrecovered cost. 1040x amended return form   If your annuity starting date is after July 1, 1986, and the cost of your annuity has not been fully recovered at your (or the survivor annuitant's) death, a deduction is allowed for the unrecovered cost. 1040x amended return form The deduction is claimed on your (or your survivor's) final tax return as a miscellaneous itemized deduction (not subject to the 2%-of-adjusted-gross-income limit). 1040x amended return form If your annuity starting date is before July 2, 1986, no tax benefit is allowed for any unrecovered cost at death. 1040x amended return form Simplified Method If your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the tax-free part of your CSRS or FERS annuity. 1040x amended return form (OPM has figured the taxable amount of your annuity shown on your Form CSA 1099R using the Simplified Method. 1040x amended return form ) You could have chosen to use either the Simplified Method or the General Rule if your annuity starting date is after July 1, 1986, but before November 19, 1996. 1040x amended return form The Simplified Method does not apply if your annuity starting date is before July 2, 1986. 1040x amended return form Under the Simplified Method, you figure the tax-free part of each full monthly payment by dividing your cost by a number of months based on your age. 1040x amended return form This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. 1040x amended return form If your annuity starting date is after 1997 and your annuity includes a survivor benefit for your spouse, this number is based on your combined ages. 1040x amended return form Worksheet A. 1040x amended return form   Use Worksheet A. 1040x amended return form Simplified Method (near the end of this publication), to figure your taxable annuity. 1040x amended return form Be sure to keep the completed worksheet. 1040x amended return form It will help you figure your taxable amounts for later years. 1040x amended return form Instead of Worksheet A, you generally can use the Simplified Method Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR to figure your taxable annuity. 1040x amended return form However, you must use Worksheet A and Worksheet B in this publication if you chose the alternative annuity option, discussed later. 1040x amended return form Line 2. 1040x amended return form   See Your cost , earlier, for an explanation of your cost in the plan. 1040x amended return form If your annuity starting date is after November 18, 1996, and you chose the alternative annuity option (explained later), you must reduce your cost by the tax-free part of the lump-sum payment you received. 1040x amended return form Line 3. 1040x amended return form   The number you enter on line 3 is the appropriate number from Table 1 or 2 representing approximate life expectancies in months. 1040x amended return form If your annuity starting date is after 1997, use: Table 1 for an annuity without a survivor benefit, or Table 2 for an annuity with a survivor benefit. 1040x amended return form If your annuity starting date is before 1998, use Table 1. 1040x amended return form Line 6. 1040x amended return form   If you received contributions tax free before 2013, the amount previously recovered tax free that you must enter on line 6 is the total amount from line 10 of last year's worksheet. 1040x amended return form If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, this amount includes the tax-free part of the lump-sum payment you received. 1040x amended return form Example. 1040x amended return form Bill Smith retired from the Federal Government on March 31, 2013, under an annuity that will provide a survivor benefit for his wife, Kathy. 1040x amended return form His annuity starting date is April 1, 2013, the annuity is paid in arrears, and he received his first monthly annuity payment on May 1, 2013. 1040x amended return form He must use the Simplified Method to figure the tax-free part of his annuity benefits. 1040x amended return form Bill's monthly annuity benefit is $1,000. 1040x amended return form He had contributed $31,000 to his retirement plan and had received no distributions before his annuity starting date. 1040x amended return form At his annuity starting date, he was 65 and Kathy was 57. 1040x amended return form Bill's completed Worksheet A is shown later. 1040x amended return form To complete line 3, he used Table 2 at the bottom of the worksheet and found that 310 is the number in the second column opposite the age range that includes 122 (his and Kathy's combined ages). 1040x amended return form Bill keeps a copy of the completed worksheet for his records. 1040x amended return form It will help him (and Kathy, if she survives him) figure the taxable amount of the annuity in later years. 1040x amended return form Bill's tax-free monthly amount is $100. 1040x amended return form (See line 4 of the worksheet. 1040x amended return form ) If he lives to collect more than 310 monthly payments, he will generally have to include in his gross income the full amount of any annuity payments received after 310 payments have been made. 1040x amended return form If Bill does not live to collect 310 monthly payments and his wife begins to receive monthly payments, she also will exclude $100 from each monthly payment until 310 payments (Bill's and hers) have been collected. 1040x amended return form If she dies before 310 payments have been made, a miscellaneous itemized deduction (not subject to the 2%-of-adjusted- gross-income limit) will be allowed for the unrecovered cost on her final income tax return. 1040x amended return form General Rule If your annuity starting date is after November 18, 1996, you cannot use the General Rule to figure the tax-free part of your CSRS or FERS annuity. 1040x amended return form If your annuity starting date is after July 1, 1986, but before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. 1040x amended return form If your annuity starting date is before July 2, 1986, you could have chosen to use the General Rule only if you could not use the Three-Year Rule. 1040x amended return form Under the General Rule, you figure the tax-free part of each full monthly payment by multiplying the initial gross monthly rate of your annuity by an exclusion percentage. 1040x amended return form Figuring this percentage is complex and requires the use of actuarial tables. 1040x amended return form For these tables and other information about using the General Rule, see Publication 939. 1040x amended return form Three-Year Rule If your annuity starting date was before July 2, 1986, you probably had to report your annuity using the Three-Year Rule. 1040x amended return form Under this rule, you excluded all the annuity payments from income until you fully recovered your cost. 1040x amended return form After your cost was recovered, all payments became fully taxable. 1040x amended return form You cannot use another rule to again exclude amounts from income. 1040x amended return form The Three-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. 1040x amended return form Worksheet A. 1040x amended return form Simplified Method for Bill Smith See the instructions in Part II of this publication under Simplified Method. 1040x amended return form 1. 1040x amended return form Enter the total pension or annuity payments received this year. 1040x amended return form Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. 1040x amended return form $ 8,000 2. 1040x amended return form Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. 1040x amended return form See Your cost in Part II, Rules for Retirees, earlier 2. 1040x amended return form 31,000 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). 1040x amended return form Otherwise, go to line 3. 1040x amended return form   3. 1040x amended return form Enter the appropriate number from Table 1 below. 1040x amended return form But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. 1040x amended return form 3. 1040x amended return form 310 4. 1040x amended return form Divide line 2 by the number on line 3 4. 1040x amended return form 100 5. 1040x amended return form Multiply line 4 by the number of months for which this year's payments were made. 1040x amended return form If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. 1040x amended return form Otherwise, go to line 6 5. 1040x amended return form 800 6. 1040x amended return form Enter any amounts previously recovered tax free in years after 1986. 1040x amended return form This is the amount shown on line 10 of your worksheet for last year 6. 1040x amended return form 0 7. 1040x amended return form Subtract line 6 from line 2 7. 1040x amended return form 31,000 8. 1040x amended return form Enter the smaller of line 5 or line 7 8. 1040x amended return form 800 9. 1040x amended return form Taxable amount for year. 1040x amended return form Subtract line 8 from line 1. 1040x amended return form Enter the result, but not less than zero. 1040x amended return form Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. 1040x amended return form If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. 1040x amended return form If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. 1040x amended return form If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. 1040x amended return form $7,200 10. 1040x amended return form Was your annuity starting date before 1987?   Yes. 1040x amended return form Do not complete the rest of this worksheet. 1040x amended return form    No. 1040x amended return form Add lines 6 and 8. 1040x amended return form This is the amount you have recovered tax free through 2013. 1040x amended return form You will need this number if you need to fill out this worksheet next year 10. 1040x amended return form 800 11. 1040x amended return form Balance of cost to be recovered. 1040x amended return form Subtract line 10 from line 2. 1040x amended return form If zero, you will not have to complete this worksheet next year. 1040x amended return form The payments you receive next year will generally be fully taxable 11. 1040x amended return form $30,200 Table 1 for Line 3 Above    IF your age on your  annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. 1040x amended return form Alternative Annuity Option If you are eligible, you may choose an alternative form of annuity. 1040x amended return form If you make this choice, you will receive a lump-sum payment equal to your contributions to the plan and a reduced monthly annuity. 1040x amended return form You are eligible to make this choice if you meet all of the following requirements. 1040x amended return form You are retiring, but not on disability. 1040x amended return form You have a life-threatening illness or other critical medical condition. 1040x amended return form You do not have a former spouse entitled to court ordered benefits based on your service. 1040x amended return form If you are not eligible or do not choose this alternative annuity, you can skip the following discussion and go to Federal Gift Tax , later. 1040x amended return form Lump-Sum Payment The lump-sum payment you receive under the alternative annuity option generally has a tax-free part and a taxable part. 1040x amended return form The tax-free part represents part of your cost. 1040x amended return form The taxable part represents part of the earnings on your annuity contract. 1040x amended return form Your lump-sum credit (discussed later) may include a deemed deposit or redeposit that is treated as being included in your lump-sum payment even though you do not actually receive such amounts. 1040x amended return form Deemed deposits and redeposits, which are described later under Lump-sum credit , are taxable to you in the year of retirement. 1040x amended return form Your taxable amount may therefore be more than the lump-sum payment you receive. 1040x amended return form You must include the taxable part of the lump-sum payment in your income for the year you receive the payment unless you roll it over into another qualified plan or an IRA. 1040x amended return form If you do not have OPM transfer the taxable amount to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. 1040x amended return form See Rollover Rules , later, for information on how to make a rollover. 1040x amended return form OPM can make a direct rollover only up to the amount of the lump-sum payment. 1040x amended return form Therefore, to defer tax on the full taxable amount if it is more than the payment, you must add funds from another source. 1040x amended return form The taxable part of the lump-sum payment does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040x amended return form It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55, even if you reach age 55 in the year you receive the lump-sum payment. 1040x amended return form For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040x amended return form Worksheet B. 1040x amended return form   Use Worksheet B. 1040x amended return form Lump-Sum Payment (near the end of this publication), to figure the taxable part of your lump-sum payment. 1040x amended return form Be sure to keep the completed worksheet for your records. 1040x amended return form   To complete the worksheet, you will need to know the amount of your lump-sum credit and the present value of your annuity contract. 1040x amended return form Lump-sum credit. 1040x amended return form   Generally, this is the same amount as the lump-sum payment you receive (the total of your contributions to the retirement system). 1040x amended return form However, for purposes of the alternative annuity option, your lump-sum credit also may include deemed deposits and redeposits that OPM advanced to your retirement account so that you are given credit for the service they represent. 1040x amended return form Deemed deposits (including interest) are for federal employment during which no retirement contributions were taken out of your pay. 1040x amended return form Deemed redeposits (including interest) are for any refunds of retirement contributions that you received and did not repay. 1040x amended return form You are treated as if you had received a lump-sum payment equal to the amount of your lump-sum credit and then had made a repayment to OPM of the advanced amounts. 1040x amended return form Present value of your annuity contract. 1040x amended return form   The present value of your annuity contract is figured using actuarial tables provided by the IRS. 1040x amended return form If you are receiving a lump-sum payment under the Alternative Annuity Option, you can write to the address below to find out the present value of your annuity contract. 1040x amended return form Internal Revenue Service Attn: Actuarial Group 2 TE/GE SE:T:EP:RA:T:A2 NCA-629 1111 Constitution Ave. 1040x amended return form , NW Washington, DC 20224-0002 Example. 1040x amended return form David Brown retired from the federal government in 2013, one month after his 55th birthday. 1040x amended return form He had contributed $31,000 to his retirement plan and chose to receive a lump-sum payment of that amount under the alternative annuity option. 1040x amended return form The present value of his annuity contract was $155,000. 1040x amended return form The tax-free part and the taxable part of the lump-sum payment are figured using Worksheet B, as shown below. 1040x amended return form The taxable part ($24,800) is also his net cost in the plan, which is used to figure the taxable part of his reduced annuity payments. 1040x amended return form See Reduced Annuity , later. 1040x amended return form Worksheet B. 1040x amended return form Lump-Sum Payment for David Brown See the instructions in Part II of this publication under Alternative Annuity Option . 1040x amended return form  1. 1040x amended return form Enter your lump-sum credit (your cost in the plan at the annuity starting date) 1. 1040x amended return form $ 31,000 2. 1040x amended return form Enter the present value of your annuity contract 2. 1040x amended return form 155,000 3. 1040x amended return form Divide line 1 by line 2 3. 1040x amended return form . 1040x amended return form 20 4. 1040x amended return form Tax-free amount. 1040x amended return form Multiply line 1 by line 3. 1040x amended return form (Caution: Do not include this amount on line 6 of Worksheet A in this publication. 1040x amended return form ) 4. 1040x amended return form $6,200 5. 1040x amended return form Taxable amount (net cost in the plan). 1040x amended return form Subtract line 4 from line 1. 1040x amended return form Include this amount in the total on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. 1040x amended return form Also, enter this amount on line 2 of Worksheet A in this publication. 1040x amended return form 5. 1040x amended return form $24,800   Lump-sum payment in installments. 1040x amended return form   If you choose the alternative annuity option, you usually will receive the lump-sum payment in two equal installments. 1040x amended return form You will receive the first installment after you make the choice upon retirement. 1040x amended return form The second installment will be paid to you, with interest, in the next calendar year. 1040x amended return form (Exceptions to the installment rule are provided for cases of critical medical need. 1040x amended return form )   Even though the lump-sum payment is made in installments, the overall tax treatment (explained at the beginning of this discussion) is the same as if the whole payment were paid at once. 1040x amended return form If the payment has a tax-free part, you must treat the taxable part as received first. 1040x amended return form How to report. 1040x amended return form   Add any actual or deemed payment of your lump-sum credit (defined earlier) to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. 1040x amended return form Add the taxable part to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b, unless you roll over the taxable part to your traditional IRA or a qualified retirement plan. 1040x amended return form    If you receive the lump-sum payment in two installments, include any interest paid with the second installment on line 8a of either Form 1040 or Form 1040A, or on line 9a of Form 1040NR. 1040x amended return form Reduced Annuity If you have chosen to receive a lump-sum payment under the alternative annuity option, you also will receive reduced monthly annuity payments. 1040x amended return form These annuity payments each will have a tax-free and a taxable part. 1040x amended return form To figure the tax-free part of each annuity payment, you must use the Simplified Method (Worksheet A). 1040x amended return form For instructions on how to complete the worksheet, see Worksheet A under Simplified Method, earlier. 1040x amended return form To complete Worksheet A, line 2, you must reduce your cost in the plan by the tax-free part of the lump-sum payment you received. 1040x amended return form Enter as your net cost on line 2 the amount from Worksheet B, line 5. 1040x amended return form Do not include the tax-free part of the lump-sum payment with other amounts recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. 1040x amended return form Example. 1040x amended return form The facts are the same as in the example for David Brown in the preceding discussion. 1040x amended return form In addition, David received 10 annuity payments in 2013 of $1,200 each. 1040x amended return form Using Worksheet A, he figures the taxable part of his annuity payments. 1040x amended return form He completes line 2 by reducing his $31,000 cost by the $6,200 tax-free part of his lump-sum payment. 1040x amended return form His entry on line 2 is his $24,800 net cost in the plan (the amount from Worksheet B, line 5). 1040x amended return form He does not include the tax-free part of his lump-sum payment on Worksheet A, line 6. 1040x amended return form David's filled-in Worksheet A is shown on the next page. 1040x amended return form Worksheet A. 1040x amended return form Simplified Method for David Brown See the instructions in Part II of this publication under Simplified Method . 1040x amended return form 1. 1040x amended return form Enter the total pension or annuity payments received this year. 1040x amended return form Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. 1040x amended return form $ 12,000 2. 1040x amended return form Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. 1040x amended return form See Your cost in Part II, Rules for Retirees, earlier 2. 1040x amended return form 24,800 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). 1040x amended return form Otherwise, go to line 3. 1040x amended return form   3. 1040x amended return form Enter the appropriate number from Table 1 below. 1040x amended return form But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. 1040x amended return form 3. 1040x amended return form 360 4. 1040x amended return form Divide line 2 by the number on line 3 4. 1040x amended return form 68. 1040x amended return form 89 5. 1040x amended return form Multiply line 4 by the number of months for which this year's payments were made. 1040x amended return form If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. 1040x amended return form Otherwise, go to line 6 5. 1040x amended return form 688. 1040x amended return form 90 6. 1040x amended return form Enter any amounts previously recovered tax free in years after 1986. 1040x amended return form This is the amount shown on line 10 of your worksheet for last year 6. 1040x amended return form 0 7. 1040x amended return form Subtract line 6 from line 2 7. 1040x amended return form 24,800 8. 1040x amended return form Enter the smaller of line 5 or line 7 8. 1040x amended return form 688. 1040x amended return form 90 9. 1040x amended return form Taxable amount for year. 1040x amended return form Subtract line 8 from line 1. 1040x amended return form Enter the result, but not less than zero. 1040x amended return form Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. 1040x amended return form If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. 1040x amended return form If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. 1040x amended return form If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. 1040x amended return form $11,311. 1040x amended return form 10 10. 1040x amended return form Was your annuity starting date before 1987?   Yes. 1040x amended return form Do not complete the rest of this worksheet. 1040x amended return form    No. 1040x amended return form Add lines 6 and 8. 1040x amended return form This is the amount you have recovered tax free through 2013. 1040x amended return form You will need this number if you need to fill out this worksheet next year 10. 1040x amended return form 688. 1040x amended return form 90 11. 1040x amended return form Balance of cost to be recovered. 1040x amended return form Subtract line 10 from line 2. 1040x amended return form If zero, you will not have to complete this worksheet next year. 1040x amended return form The payments you receive next year will generally be fully taxable 11. 1040x amended return form $24,111. 1040x amended return form 10 Table 1 for Line 3 Above    IF your age on your annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. 1040x amended return form Reemployment after choosing the alternative annuity option. 1040x amended return form If you chose this option when you retired and then you were reemployed by the Federal Government before retiring again, your Form CSA 1099R may show only the amount of your contributions to your retirement plan during your reemployment. 1040x amended return form If the amount on the form does not include all your contributions, disregard it and use your total contributions to figure the taxable part of your annuity payments. 1040x amended return form Annuity starting date before November 19, 1996. 1040x amended return form   If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, the taxable and tax-free parts of your lump-sum payment and your annuity payments are figured using different rules. 1040x amended return form Under those rules, you do not reduce your cost in the plan (Worksheet A, line 2) by the tax-free part of the lump-sum payment. 1040x amended return form However, you must include that tax-free amount with other amounts previously recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. 1040x amended return form Federal Gift Tax If, through the exercise or nonexercise of an election or option, you provide an annuity for your beneficiary at or after your death, you have made a gift. 1040x amended return form The gift may be taxable for gift tax purposes. 1040x amended return form The value of the gift is equal to the value of the annuity. 1040x amended return form Joint and survivor annuity. 1040x amended return form   If the gift is an interest in a joint and survivor annuity where only you and your spouse can receive payments before the death of the last spouse to die, the gift generally will qualify for the unlimited marital deduction. 1040x amended return form This will eliminate any gift tax liability with regard to that gift. 1040x amended return form   If you provide survivor annuity benefits for someone other than your current spouse, such as your former spouse, the unlimited marital deduction will not apply. 1040x amended return form This may result in a taxable gift. 1040x amended return form More information. 1040x amended return form   For information about the gift tax, see Publication 950, Introduction to Estate and Gift Taxes, and Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. 1040x amended return form Retirement During the Past Year If you have recently retired, the following discussions covering annual leave, voluntary contributions, and community property may apply to you. 1040x amended return form Annual leave. 1040x amended return form   A payment for accrued annual leave received on retirement is a salary payment. 1040x amended return form It is taxable as wages in the tax year you receive it. 1040x amended return form Voluntary contributions. 1040x amended return form   Voluntary contributions to the retirement fund are those made in addition to the regular contributions that were deducted from your salary. 1040x amended return form They also include the regular contributions withheld from your salary after you have the years of service necessary for the maximum annuity allowed by law. 1040x amended return form Voluntary contributions are not the same as employee contributions to the Thrift Savings Plan. 1040x amended return form See Thrift Savings Plan , later. 1040x amended return form Additional annuity benefit. 1040x amended return form   If you choose to receive an additional annuity benefit from your voluntary contributions, it is treated separately from the annuity benefit that comes from the regular contributions deducted from your salary. 1040x amended return form This separate treatment applies for figuring the amounts to be excluded from, and included in, gross income. 1040x amended return form It does not matter that you receive only one monthly check covering both benefits. 1040x amended return form Each year you will receive a Form CSA 1099R that will show how much of your total annuity received in the past year was from each type of benefit. 1040x amended return form   Figure the taxable and tax-free parts of your additional monthly benefits from voluntary contributions using the rules that apply to regular CSRS and FERS annuities, as explained earlier. 1040x amended return form Refund of voluntary contributions. 1040x amended return form   If you choose to receive a refund of your voluntary contributions plus accrued interest, the interest is taxable to you in the tax year it is distributed unless you roll it over to a traditional IRA or another qualified retirement plan. 1040x amended return form If you do not have OPM transfer the interest to a traditional IRA or other qualified retirement plan in a direct rollover, tax will be withheld at a 20% rate. 1040x amended return form See Rollover Rules , later. 1040x amended return form The interest does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040x amended return form It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55. 1040x amended return form For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040x amended return form Community property laws. 1040x amended return form   State community property laws apply to your annuity. 1040x amended return form These laws will affect your income tax only if you file a return separately from your spouse. 1040x amended return form   Generally, the determination of whether your annuity is separate income (taxable to you) or community income (taxable to both you and your spouse) is based on your marital status and domicile when you were working. 1040x amended return form Regardless of whether you are now living in a community property state or a noncommunity property state, your current annuity may be community income if it is based on services you performed while married and domiciled in a community property state. 1040x amended return form   At any time, you have only one domicile even though you may have more than one home. 1040x amended return form Your domicile is your fixed and permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. 1040x amended return form The question of your domicile is mainly a matter of your intentions as indicated by your actions. 1040x amended return form   If your annuity is a mixture of community income and separate income, you must divide it between the two kinds of income. 1040x amended return form The division is based on your periods of service and domicile in community and noncommunity property states while you were married. 1040x amended return form   For more information, see Publication 555, Community Property. 1040x amended return form Reemployment After Retirement If you retired from federal service and are later rehired by the Federal Government as an employee, you can continue to receive your annuity during reemployment. 1040x amended return form The employing agency usually will pay you the difference between your salary for your period of reemployment and your annuity. 1040x amended return form This amount is taxable as wages. 1040x amended return form Your annuity will continue to be taxed just as it was before. 1040x amended return form If you are still recovering your cost, you continue to do so. 1040x amended return form If you have recovered your cost, the annuity you receive while you are reemployed generally is fully taxable. 1040x amended return form Nonresident Aliens The following special rules apply to nonresident alien federal employees performing services outside the United States and to nonresident alien retirees and beneficiaries. 1040x amended return form A nonresident alien is an individual who is not a citizen or a resident alien of the United States. 1040x amended return form Special rule for figuring your total contributions. 1040x amended return form   Your contributions to the retirement plan (your cost) also include the government's contributions to the plan to a certain extent. 1040x amended return form You include government contributions that would not have been taxable to you at the time they were contributed if they had been paid directly to you. 1040x amended return form For example, government contributions would not have been taxable to you if, at the time made, your services were performed outside the United States. 1040x amended return form Thus, your cost is increased by these government contributions and the benefits that you, or your beneficiary, must include in income are reduced. 1040x amended return form   This method of figuring your total contributions does not apply to any contributions the government made on your behalf after you became a citizen or a resident alien of the United States. 1040x amended return form Limit on taxable amount. 1040x amended return form   There is a limit on the taxable amount of payments received from the CSRS, the FERS, or the TSP by a nonresident alien retiree or nonresident alien beneficiary. 1040x amended return form Figure this limited taxable amount by multiplying the otherwise taxable amount by a fraction. 1040x amended return form The numerator of the fraction is the retiree's total U. 1040x amended return form S. 1040x amended return form Government basic pay, other than tax-exempt pay for services performed outside the United States. 1040x amended return form The denominator is the retiree's total U. 1040x amended return form S. 1040x amended return form Government basic pay for all services. 1040x amended return form    Basic pay includes regular pay plus any standby differential. 1040x amended return form It does not include bonuses, overtime pay, certain retroactive pay, uniform or other allowances, or lump-sum leave payments. 1040x amended return form   To figure the limited taxable amount of your CSRS or FERS annuity or your TSP distributions, use Worksheet C. 1040x amended return form (For an annuity, first complete Worksheet A in this publication. 1040x amended return form ) Worksheet C. 1040x amended return form Limited Taxable Amount for Nonresident Alien 1. 1040x amended return form Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040x amended return form   2. 1040x amended return form Enter the total U. 1040x amended return form S. 1040x amended return form Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040x amended return form   3. 1040x amended return form Enter the total U. 1040x amended return form S. 1040x amended return form Government basic pay for all services 3. 1040x amended return form   4. 1040x amended return form Divide line 2 by line 3 4. 1040x amended return form   5. 1040x amended return form Limited taxable amount. 1040x amended return form Multiply line 1 by line 4. 1040x amended return form Enter this amount on Form 1040NR, line 17b 5. 1040x amended return form   Example 1. 1040x amended return form You are a nonresident alien who performed all services for the U. 1040x amended return form S. 1040x amended return form Government abroad as a nonresident alien. 1040x amended return form You retired and began to receive a monthly annuity of $200. 1040x amended return form Your total basic pay for all services for the U. 1040x amended return form S. 1040x amended return form Government was $100,000. 1040x amended return form All of your basic pay was tax exempt because it was not U. 1040x amended return form S. 1040x amended return form source income. 1040x amended return form The taxable amount of your annuity using Worksheet A in this publication is $720. 1040x amended return form You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. 1040x amended return form Worksheet C. 1040x amended return form Limited Taxable Amount for Nonresident Alien — Example 1 1. 1040x amended return form Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040x amended return form $ 720 2. 1040x amended return form Enter the total U. 1040x amended return form S. 1040x amended return form Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040x amended return form 0 3. 1040x amended return form Enter the total U. 1040x amended return form S. 1040x amended return form Government basic pay for all services 3. 1040x amended return form 100,000 4. 1040x amended return form Divide line 2 by line 3 4. 1040x amended return form 0 5. 1040x amended return form Limited taxable amount. 1040x amended return form Multiply line 1 by line 4. 1040x amended return form Enter this amount on Form 1040NR, line 17b 5. 1040x amended return form 0 Example 2. 1040x amended return form You are a nonresident alien who performed services for the U. 1040x amended return form S. 1040x amended return form Government as a nonresident alien both within the United States and abroad. 1040x amended return form You retired and began to receive a monthly annuity of $240. 1040x amended return form Your total basic pay for your services for the U. 1040x amended return form S. 1040x amended return form Government was $120,000; $40,000 was for work done in the United States and $80,000 was for your work done in a foreign country. 1040x amended return form The part of your total basic pay for your work done in a foreign country was tax exempt because it was not U. 1040x amended return form S. 1040x amended return form source income. 1040x amended return form The taxable amount of your annuity figured using Worksheet A in this publication is $1,980. 1040x amended return form You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. 1040x amended return form Worksheet C. 1040x amended return form Limited Taxable Amount for Nonresident Alien — Example 2 1. 1040x amended return form Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040x amended return form $ 1,980 2. 1040x amended return form Enter the total U. 1040x amended return form S. 1040x amended return form Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040x amended return form 40,000 3. 1040x amended return form Enter the total U. 1040x amended return form S. 1040x amended return form Government basic pay for all services 3. 1040x amended return form 120,000 4. 1040x amended return form Divide line 2 by line 3 4. 1040x amended return form . 1040x amended return form 333 5. 1040x amended return form Limited taxable amount. 1040x amended return form Multiply line 1 by line 4. 1040x amended return form Enter this amount on Form 1040NR, line 17b 5. 1040x amended return form 659 Thrift Savings Plan Generally, all of the money in your TSP account is taxed as ordinary income when you receive it. 1040x amended return form (However, see Roth TSP balance and Uniformed services TSP accounts, next. 1040x amended return form ) This is because neither the contributions to your traditional TSP balance nor its earnings have been included previously in your taxable income. 1040x amended return form The way that you withdraw your account balance determines when you must pay the tax. 1040x amended return form Roth TSP balance. 1040x amended return form   The TSP also offers a Roth TSP option, which allows you to make after-tax contributions into your TSP account. 1040x amended return form This means Roth TSP contributions are included in your income. 1040x amended return form The contribution limits are the same as the traditional TSP. 1040x amended return form You can elect to have part or all of your TSP contributions designated as a Roth TSP. 1040x amended return form Agency contributions will be part of your traditional TSP balance. 1040x amended return form Also, you cannot roll over any portion of your traditional TSP into your Roth TSP. 1040x amended return form   Qualified distributions from your Roth TSP are not included in income. 1040x amended return form This applies to both your cost in the account and income earned on that account. 1040x amended return form A qualified distribution is generally a distribution that is: Made after a 5-tax-year period of participation, and Made on or after the date you reach age 59½, made to a beneficiary or your estate on or after your death, or attributable to your being disabled. 1040x amended return form   For more information, go to the TSP website, www. 1040x amended return form tsp. 1040x amended return form gov, or the TSP Service Office. 1040x amended return form See Publication 575, Pension and Annuity Income, for more information about designated Roth accounts. 1040x amended return form Uniformed services TSP accounts. 1040x amended return form   If you have a uniformed services TSP account that includes contributions from combat zone pay, the distributions attributable to those contributions are tax exempt. 1040x amended return form However, any earnings on those contributions to a traditional TSP balance are subject to tax when they are distributed. 1040x amended return form See Roth TSP balance discussed previously to get more information about Roth contributions. 1040x amended return form The statement you receive from the TSP will separately state the total amount of your distribution and the amount of your taxable distribution for the year. 1040x amended return form You can get more information from the TSP website, www. 1040x amended return form tsp. 1040x amended return form gov, or the TSP Service Office. 1040x amended return form Direct rollover by the TSP. 1040x amended return form   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a traditional IRA or other qualified retirement plan, the tax on that part is deferred until you receive payments from the traditional IRA or other plan. 1040x amended return form However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. 1040x amended return form Also, see Rollover Rules , later. 1040x amended return form Direct rollover by the TSP to a Roth IRA. 1040x amended return form   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a Roth IRA, the amount transferred will be taxed in the current year. 1040x amended return form However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. 1040x amended return form Also, see Rollovers to Roth IRAs for more information, later. 1040x amended return form Note. 1040x amended return form A direct rollover of your Roth contributions and its earnings (if certain conditions are met, see Roth TSP balance , earlier) in your TSP account to a Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA are not subject to tax when they are transferred or when you receive payments from those accounts at a later date. 1040x amended return form This is because you already paid tax on those contributions. 1040x amended return form You cannot rollover Roth contributions and its earnings in your TSP account to a traditional IRA. 1040x amended return form TSP annuity. 1040x amended return form   If you ask the TSP to buy an annuity with the money in your account, from traditional contributions and its earnings, the annuity payments are taxed when you receive them. 1040x amended return form The payments are not subject to the additional 10% tax on early distributions, even if you are under age 55 when they begin. 1040x amended return form However, there is no tax on the annuity payments if the annuity is purchased using the money in your account from Roth contributions and its earnings if certain conditions are met. 1040x amended return form See Roth TSP balance , earlier. 1040x amended return form This is because you already paid tax on those contributions. 1040x amended return form Cash withdrawals. 1040x amended return form   If you withdraw any of the money in your TSP account, from traditional contributions and its earnings, it is generally taxed as ordinary income when you receive it unless you roll it over into a traditional IRA or other qualified plan. 1040x amended return form (See Rollover Rules , later. 1040x amended return form ) If you receive your entire TSP account balance in a single tax year, you may be able to use the 10-year tax option to figure your tax. 1040x amended return form See Lump-Sum Distributions in Publication 575 for details. 1040x amended return form However, there is no tax if you withdraw money in your TSP account from Roth contributions and its earnings if certain conditions are met. 1040x amended return form See Roth TSP balance , earlier. 1040x amended return form    To qualify for the 10-year tax option, the plan participant must have been born before January 2, 1936. 1040x amended return form   If you receive a single payment or you choose to receive your account balance in monthly payments over a period of less than 10 years, the TSP generally must withhold 20% for federal income tax. 1040x amended return form If you choose to receive your account balance in monthly payments over a period of 10 or more years or a period based on your life expectancy, the payments are subject to withholding as if you are married with three withholding allowances, unless you submit a withholding certificate. 1040x amended return form See also Withholding from Thrift Savings Plan payments earlier under Tax Withholding and Estimated Tax in Part I. 1040x amended return form However, there is no withholding requirement for amounts withdrawn from your TSP account that is from Roth contributions and its earnings, if certain conditions are met. 1040x amended return form See Roth TSP balance , earlier, for a discussion of those conditions. 1040x amended return form Tax on early distributions. 1040x amended return form   Any money paid to you from your TSP account before you reach age 59½ may be subject to an additional 10% tax on early distributions. 1040x amended return form However, this additional tax does not apply in certain situations, including any of the following. 1040x amended return form You receive the distribution and separate from government service during or after the calendar year in which you reach age 55. 1040x amended return form You choose to receive your account balance in monthly payments based on your life expectancy. 1040x amended return form You are totally and permanently disabled. 1040x amended return form You receive amounts from your Roth contributions since that represents a return of your cost (after-tax money). 1040x amended return form The earnings may be subject to the 10% tax depending on whether you met certain conditions. 1040x amended return form See Roth TSP balance , earlier. 1040x amended return form   For more information, see Tax on Early Distributions in Publication 575. 1040x amended return form Outstanding loan. 1040x amended return form   If the TSP declares a distribution from your account because money you borrowed has not been repaid when you separate from government service, your account is reduced and the amount of the distribution (your unpaid loan balance and any unpaid interest), from traditional contributions and its earnings, is taxed in the year declared. 1040x amended return form The distribution also may be subject to the additional 10% tax on early distributions. 1040x amended return form However, the tax will be deferred if you make a rollover contribution to a traditional IRA or other qualified plan equal to the declared distribution amount. 1040x amended return form See Rollover Rules , later. 1040x amended return form   If you withdraw any money from your TSP account in that same year, the TSP must withhold income tax of 20% of the total of the declared distribution and the amount withdrawn. 1040x amended return form However, no withholding is required for portions of the distribution that is from Roth contributions and its earnings, if certain conditions are met. 1040x amended return form See Roth TSP balance , earlier. 1040x amended return form More information. 1040x amended return form   For more information about the TSP, see Summary of the Thrift Savings Plan, distributed to all federal employees. 1040x amended return form Also, see Important Tax Information About Payments From Your TSP Account and Special Tax Withholding Rules for Thrift Savings Plan Payments to Nonresident Aliens, which are available from your agency personnel office or from the TSP by calling 1-TSP-YOU-FIRST (1-877-968-3778) and for participants who are deaf, hard of hearing, or have a speech disability, call 1-TSP-THRIFT5 (1-877-847-4385). 1040x amended return form    The above documents are also available on the TSP website at www. 1040x amended return form tsp. 1040x amended return form gov. 1040x amended return form Select “Forms & Publications. 1040x amended return form ” Rollover Rules Generally, a rollover is a tax-free withdrawal of cash or other assets from one qualified retirement plan or traditional IRA and its reinvestment in another qualified retirement plan or traditional IRA. 1040x amended return form You do not include the amount rolled over in your income, and you cannot take a deduction for it. 1040x amended return form The amount rolled over is taxed later as the new program pays that amount to you. 1040x amended return form If you roll over amounts into a traditional IRA, later distributions of these amounts from the traditional IRA do not qualify for the capital gain or the 10-year tax option. 1040x amended return form However, capital gain treatment or the 10-year tax option will be restored if the traditional IRA contains only amounts rolled over from a qualified plan and these amounts are rolled over from the traditional IRA into a qualified retirement plan. 1040x amended return form To qualify for the capital gain treatment or 10-year tax option, the plan participant must have been born before January 2, 1936. 1040x amended return form You can also roll over a distribution from a qualified retirement plan into a Roth IRA. 1040x amended return form Although the transfer of a distribution into a Roth IRA is considered a rollover for Roth IRA purposes, it is not a tax-free transfer unless you are rolling over amounts from Roth contributions and its earnings. 1040x amended return form See Rollovers to Roth IRAs , later, for more information. 1040x amended return form Qualified retirement plan. 1040x amended return form   For this purpose, a qualified retirement plan generally is: A qualified employee plan, A qualified employee annuity, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan. 1040x amended return form The CSRS, FERS, and TSP are considered qualified retirement plans. 1040x amended return form Distributions eligible for rollover treatment. 1040x amended return form   If you receive a refund of your CSRS or FERS contributions when you leave government service, you can roll over any interest you receive on the contributions. 1040x amended return form You cannot roll over any part of your CSRS or FERS annuity payments. 1040x amended return form   You can roll over a distribution of any part of your TSP account balance except: A distribution of your account balance that you choose to receive in monthly payments over: Your life expectancy, The joint life expectancies of you and your beneficiary, or A period of 10 years or more, A required minimum distribution generally beginning at age 70½, A declared distribution because of an unrepaid loan, if you have not separated from government service (see Outstanding loan under Thrift Savings Plan, earlier), or A hardship distribution. 1040x amended return form   In addition, a distribution to your beneficiary generally is not treated as an eligible rollover distribution. 1040x amended return form However, see Qualified domestic relations order (QDRO) and Rollovers by surviving spouse , and Rollovers by nonspouse beneficiary , later. 1040x amended return form Direct rollover option. 1040x amended return form   You can choose to have the OPM or TSP transfer any part of an eligible rollover distribution directly to another qualified retirement plan that accepts rollover distributions or to a traditional IRA or Roth IRA. 1040x amended return form   There is an automatic rollover requirement for mandatory distributions. 1040x amended return form A mandatory distribution is a distribution made without your consent and before you reach age 62 or normal retirement age, whichever is later. 1040x amended return form The automatic rollover requirement applies if the distribution is more than $1,000 and is an eligible rollover distribution. 1040x amended return form You can choose to have the distribution paid directly to you or rolled over directly to your traditional or Roth IRA or another qualified retirement plan. 1040x amended return form If you do not make this choice, OPM will automatically roll over the distribution into an IRA of a designated trustee or issuer. 1040x amended return form No tax withheld. 1040x amended return form   If you choose the direct rollover option or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. 1040x amended return form However, if the rollover is to a Roth IRA, you may want to choose to have tax withheld since any amount rolled over is generally included in income. 1040x amended return form Any part of the eligible rollover distribution paid to you is subject to withholding at a 20% rate. 1040x amended return form Direct roll over amounts from Roth contributions and its earnings do not have tax withheld because you already paid tax on those amounts. 1040x amended return form Payment to you option. 1040x amended return form   If an eligible rollover distribution is paid to you, the OPM or TSP must withhold 20% for income tax even if you plan to roll over the distribution to another qualified retirement plan, traditional or Roth IRA. 1040x amended return form However, the full amount is treated as distributed to you even though you actually receive only 80%. 1040x amended return form You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional IRA. 1040x amended return form Rollovers to Roth IRAs are generally included in income. 1040x amended return form Eligible rollover distributions that are from Roth contributions do not have tax withheld because you already paid tax on those amounts. 1040x amended return form If you leave government service before the calendar year in which you reach age 55 and are under age 59½ when a distribution is paid to you, you may have to pay an additional 10% tax on any part, including any tax withheld, that you do not roll over. 1040x amended return form However, distributions from Roth contributions will not be subject to the 10% additional tax because it is a return of your cost (after-tax money). 1040x amended return form Earnings from those contributions may be subject to the 10% additional tax if certain conditions are not met. 1040x amended return form See Roth TSP balance , earlier. 1040x amended return form Also, see Tax on Early Distributions in Publication 575. 1040x amended return form Exception to withholding. 1040x amended return form   Withholding from an eligible rollover distribution paid to you is not required if the distributions for your tax year total less than $200. 1040x amended return form Partial rollovers. 1040x amended return form   A lump-sum distribution may qualify for capital gain treatment or the 10-year tax option if the plan participant was born before January 2, 1936. 1040x amended return form See Lump-Sum Distributions in Publication 575. 1040x amended return form However, if you roll over any part of the distribution, the part you keep does not qualify for this special tax treatment. 1040x amended return form Rolling over more than amount received. 1040x amended return form   If you want to roll over more of an eligible rollover distribution than the amount you received after income tax was withheld, you will have to add funds from some other source (such as your savings or borrowed amounts). 1040x amended return form Example. 1040x amended return form You left government service at age 53. 1040x amended return form On February 1, 2013, you receive an eligible rollover distribution of $10,000 from you