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2011 Irs Form 1040

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2011 Irs Form 1040

2011 irs form 1040 8. 2011 irs form 1040   Distributions and Rollovers Table of Contents DistributionsMinimum Required Distributions No Special 10-Year Tax Option Transfer of Interest in 403(b) ContractAfter-tax contributions. 2011 irs form 1040 Permissive service credit. 2011 irs form 1040 Tax-Free RolloversHardship exception to rollover rules. 2011 irs form 1040 Eligible retirement plans. 2011 irs form 1040 Nonqualifying distributions. 2011 irs form 1040 Second rollover. 2011 irs form 1040 Gift Tax Distributions Permissible distributions. 2011 irs form 1040   Generally, a distribution cannot be made from a 403(b) account until the employee: Reaches age 59½, Has a severance from employment, Dies, Becomes disabled, In the case of elective deferrals, encounters financial hardship, or Has a qualified reservist distribution. 2011 irs form 1040 In most cases, the payments you receive or that are made available to you under your 403(b) account are taxable in full as ordinary income. 2011 irs form 1040 In general, the same tax rules apply to distributions from 403(b) plans that apply to distributions from other retirement plans. 2011 irs form 1040 These rules are explained in Publication 575. 2011 irs form 1040 Publication 575 also discusses the additional tax on early distributions from retirement plans. 2011 irs form 1040 Retired public safety officers. 2011 irs form 1040   If you are an eligible retired public safety officer, distributions of up to $3,000, made directly from your 403(b) plan to pay accident, health, or long-term care insurance, are not included in your taxable income. 2011 irs form 1040 The premiums can be for you, your spouse, or your dependents. 2011 irs form 1040   A public safety officer is a law enforcement officer, fire fighter, chaplain, or member of a rescue squad or ambulance crew. 2011 irs form 1040   For additional information, see Publication 575. 2011 irs form 1040 Distribution for active reservist. 2011 irs form 1040   The 10% penalty for early withdrawals will not apply to a qualified reservist distribution attributable to elective deferrals from a 403(b) plan. 2011 irs form 1040 A qualified reservist distribution is a distribution that is made: To an individual who is a reservist or national guardsman and who was ordered or called to active duty for a period in excess of 179 days or for an indefinite period; and During the period beginning on the date of the order or call to duty and ending at the close of the active duty period. 2011 irs form 1040 Minimum Required Distributions You must receive all, or at least a certain minimum, of your interest accruing after 1986 in the 403(b) plan by April 1 of the calendar year following the later of the calendar year in which you become age 70½, or the calendar year in which you retire. 2011 irs form 1040 Check with your employer, plan administrator, or provider to find out whether this rule also applies to pre-1987 accruals. 2011 irs form 1040 If not, a minimum amount of these accruals must begin to be distributed by the later of the end of the calendar year in which you reach age 75 or April 1 of the calendar year following retirement. 2011 irs form 1040 For each year thereafter, the minimum distribution must be made by the last day of the year. 2011 irs form 1040 If you do not receive the required minimum distribution, you are subject to a nondeductible 50% excise tax on the difference between the required minimum distribution and the amount actually distributed. 2011 irs form 1040 No Special 10-Year Tax Option A distribution from a 403(b) plan does not qualify as a lump-sum distribution. 2011 irs form 1040 This means you cannot use the special 10-year tax option to calculate the taxable portion of a 403(b) distribution. 2011 irs form 1040 For more information, see Publication 575. 2011 irs form 1040 Transfer of Interest in 403(b) Contract Contract exchanges. 2011 irs form 1040   If you transfer all or part of your interest from a 403(b) contract to another 403(b) contract (held in the same plan), the transfer is tax free, and is referred to as a contract exchange. 2011 irs form 1040 This was previously known as a 90-24 transfer. 2011 irs form 1040 A contract exchange is similar to a 90-24 transfer with one major difference. 2011 irs form 1040 Previously, you were able to accomplish the transfer without your employer’s involvement. 2011 irs form 1040 After September 24, 2007, all such transfers are accomplished through a contract exchange requiring your employer’s involvement. 2011 irs form 1040 In addition, the plan must provide for the exchange and the transferred interest must be subject to the same or stricter distribution restrictions. 2011 irs form 1040 Finally, your accumulated benefit after the exchange must be equal to what it was before the exchange. 2011 irs form 1040   Transfers that do not satisfy this rule are plan distributions and are generally taxable as ordinary income. 2011 irs form 1040 Plan-to-plan transfers. 2011 irs form 1040   You may also transfer part or all of your interest from a 403(b) plan to another 403(b) plan if you are an employee of (or were formerly employed by) the employer of the plan to which you would like to transfer. 2011 irs form 1040 Both the initial plan and the receiving plan must provide for transfers. 2011 irs form 1040 Your accumulated benefit after the transfer must be at least equal to what it was before the transfer. 2011 irs form 1040 The new plan’s restrictions on distributions must be the same or stricter than those of the original plan. 2011 irs form 1040 Tax-free transfers for certain cash distributions. 2011 irs form 1040   A tax-free transfer may also apply to a cash distribution of your 403(b) account from an insurance company that is subject to a rehabilitation, conservatorship, insolvency, or similar state proceeding. 2011 irs form 1040 To receive tax-free treatment, you must do all of the following: Withdraw all the cash to which you are entitled in full settlement of your contract rights or, if less, the maximum permitted by the state. 2011 irs form 1040 Reinvest the cash distribution in a single policy or contract issued by another insurance company or in a single custodial account subject to the same or stricter distribution restrictions as the original contract not later than 60 days after you receive the cash distribution. 2011 irs form 1040 Assign all future distribution rights to the new contract or account for investment in that contract or account if you received an amount that is less than what you are entitled to because of state restrictions. 2011 irs form 1040   In addition to the preceding requirements, you must provide the new insurer with a written statement containing all of the following information: The gross amount of cash distributed under the old contract. 2011 irs form 1040 The amount of cash reinvested in the new contract. 2011 irs form 1040 Your investment in the old contract on the date you receive your first cash distribution. 2011 irs form 1040   Also, you must attach the following items to your timely filed income tax return in the year you receive the first distribution of cash. 2011 irs form 1040 A copy of the statement you gave the new insurer. 2011 irs form 1040 A statement that includes: The words ELECTION UNDER REV. 2011 irs form 1040 PROC. 2011 irs form 1040 92-44, The name of the company that issued the new contract, and The new policy number. 2011 irs form 1040 Direct trustee-to-trustee transfer. 2011 irs form 1040   If you make a direct trustee-to-trustee transfer, from your governmental 403(b) account to a defined benefit governmental plan, it may not be includible in gross income. 2011 irs form 1040   The transfer amount is not includible in gross income if it is made to: Purchase permissive service credits, or Repay contributions and earnings that were previously refunded under a forfeiture of service credit under the plan, or under another plan maintained by a state or local government employer within the same state. 2011 irs form 1040 After-tax contributions. 2011 irs form 1040   For distributions beginning after December 31, 2006, after-tax contributions can be rolled over between a 403(b) plan and a defined benefit plan, IRA, or a defined contribution plan. 2011 irs form 1040 If the rollover is to or from a 403(b) plan, it must occur through a direct trustee-to-trustee transfer. 2011 irs form 1040 Permissive service credit. 2011 irs form 1040   A permissive service credit is credit for a period of service recognized by a defined benefit governmental plan only if you voluntarily contribute to the plan an amount that does not exceed the amount necessary to fund the benefit attributable to the period of service and the amount contributed is in addition to the regular employee contribution, if any, under the plan. 2011 irs form 1040   A permissive service credit may also include service credit for up to 5 years where there is no performance of service, or service credited to provide an increased benefit for service credit which a participant is receiving under the plan. 2011 irs form 1040   Check with your plan administrator as to the type and extent of service that may be purchased by this transfer. 2011 irs form 1040 Tax-Free Rollovers You can generally roll over tax free all or any part of a distribution from a 403(b) plan to a traditional IRA or a non-Roth eligible retirement plan, except for any nonqualifying distributions, described later. 2011 irs form 1040 You may also roll over any part of a distribution from a 403(b) plan by converting it through a direct rollover, described below, to a Roth IRA. 2011 irs form 1040 Conversion amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. 2011 irs form 1040 See Publication 590 for more information about conversion into a Roth IRA. 2011 irs form 1040 Note. 2011 irs form 1040 A participant is required to roll over distribution amounts received within 60 days in order for the amount to be treated as nontaxable. 2011 irs form 1040 Distribution amounts that are rolled over within the 60 days are not subject to the 10% early distribution penalty. 2011 irs form 1040 Rollovers to and from 403(b) plans. 2011 irs form 1040   You can generally roll over tax free all or any part of a distribution from an eligible retirement plan to a 403(b) plan. 2011 irs form 1040 Beginning January 1, 2008, distributions from tax-qualified retirement plans and tax-sheltered annuities can be converted by making a direct rollover into a Roth IRA subject to the restrictions that currently apply to rollovers from a traditional IRA into a Roth IRA. 2011 irs form 1040 Converted amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. 2011 irs form 1040 See Publication 590 for more information on conversion into a Roth IRA. 2011 irs form 1040   If a distribution includes both pre-tax contributions and after-tax contributions, the portion of the distribution that is rolled over is treated as consisting first of pre-tax amounts (contributions and earnings that would be includible in income if no rollover occurred). 2011 irs form 1040 This means that if you roll over an amount that is at least as much as the pre-tax portion of the distribution, you do not have to include any of the distribution in income. 2011 irs form 1040   For more information on rollovers and eligible retirement plans, see Publication 575. 2011 irs form 1040 If you roll over money or other property from a 403(b) plan to an eligible retirement plan, see Publication 575 for information about possible effects on later distributions from the eligible retirement plan. 2011 irs form 1040 Hardship exception to rollover rules. 2011 irs form 1040   The IRS may waive the 60-day rollover period if the failure to waive such requirement would be against equity or good conscience, including cases of casualty, disaster, or other events beyond the reasonable control of an individual. 2011 irs form 1040   To obtain a hardship exception, you must apply to the IRS for a waiver of the 60-day rollover requirement. 2011 irs form 1040 You apply for the waiver by following the general instructions used in requesting a letter ruling. 2011 irs form 1040 These instructions are stated in Revenue Procedure 2013-4, 2013-1 I. 2011 irs form 1040 R. 2011 irs form 1040 B. 2011 irs form 1040 126 available at www. 2011 irs form 1040 irs. 2011 irs form 1040 gov/irb/2013-01_IRB/ar09. 2011 irs form 1040 html, or see the latest annual update. 2011 irs form 1040 You must also pay a user fee with the application. 2011 irs form 1040 The user fee for a rollover that is less than $50,000 is $500. 2011 irs form 1040 For rollovers that are $50,000 or more, see Revenue Procedure 2013-8, 2013-1 I. 2011 irs form 1040 R. 2011 irs form 1040 B. 2011 irs form 1040 237 available at www. 2011 irs form 1040 irs. 2011 irs form 1040 gov/irb/2013-01_IRB/ar13. 2011 irs form 1040 html, or see the latest annual update. 2011 irs form 1040   In determining whether to grant a waiver, the IRS will consider all relevant facts and circumstances, including: Whether errors were made by the financial institution; Whether you were unable to complete the rollover due to death, disability, hospitalization, incarceration, restrictions imposed by a foreign country, or postal error; Whether you used the amount distributed (for example, in the case of payment by check, whether you cashed the check); and How much time has passed since the date of distribution. 2011 irs form 1040   For additional information on rollovers, see Publication 590. 2011 irs form 1040 Eligible retirement plans. 2011 irs form 1040   The following are considered eligible retirement plans. 2011 irs form 1040 Individual retirement arrangements. 2011 irs form 1040 Roth IRA. 2011 irs form 1040 403(b) plans. 2011 irs form 1040 Government eligible 457 plans. 2011 irs form 1040 Qualified retirement plans. 2011 irs form 1040  If the distribution is from a designated Roth account, then the only eligible retirement plan is another designated Roth account or a Roth IRA. 2011 irs form 1040 Nonqualifying distributions. 2011 irs form 1040   You cannot roll over tax free: Minimum required distributions (generally required to begin at age 70½), Substantially equal payments over your life or life expectancy, Substantially equal payments over the joint lives or life expectancies of your beneficiary and you, Substantially equal payments for a period of 10 years or more, Hardship distributions, or Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or excess annual additions and any allocable gains. 2011 irs form 1040 Rollover of nontaxable amounts. 2011 irs form 1040    You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another eligible retirement plan, traditional IRA, or Roth IRA. 2011 irs form 1040 The transfer must be made either through a direct rollover to an eligible plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional IRA or Roth IRA. 2011 irs form 1040   If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution. 2011 irs form 1040 Direct rollovers of 403(b) plan distributions. 2011 irs form 1040   You have the option of having your 403(b) plan make the rollover directly to a traditional IRA, Roth IRA, or new plan. 2011 irs form 1040 Before you receive a distribution, your plan will give you information on this. 2011 irs form 1040 It is generally to your advantage to choose this option because your plan will not withhold tax on the distribution if you choose it. 2011 irs form 1040 Distribution received by you. 2011 irs form 1040   If you receive a distribution that qualifies to be rolled over, you can roll over all or any part of the distribution. 2011 irs form 1040 Generally, you will receive only 80% of the distribution because 20% must be withheld. 2011 irs form 1040 If you roll over only the 80% you receive, you must pay tax on the 20% you did not roll over. 2011 irs form 1040 You can replace the 20% that was withheld with other money within the 60-day period to make a 100% rollover. 2011 irs form 1040 Voluntary deductible contributions. 2011 irs form 1040   For tax years 1982 through 1986, employees could make deductible contributions to a 403(b) plan under the individual retirement arrangement (IRA) rules instead of deducting contributions to a traditional IRA. 2011 irs form 1040   If you made voluntary deductible contributions to a 403(b) plan under these traditional IRA rules, the distribution of all or part of the accumulated deductible contributions may be rolled over if it otherwise qualifies as a distribution you can roll over. 2011 irs form 1040 Accumulated deductible contributions are the deductible contributions: Plus Income allocable to the contributions, Gain allocable to the contributions, and Minus Expenses and losses allocable to the contributions, and Distributions from the contributions, income, or gain. 2011 irs form 1040 Excess employer contributions. 2011 irs form 1040   The portion of a distribution from a 403(b) plan transferred to a traditional IRA that was previously included in income as excess employer contributions (discussed earlier) is not an eligible rollover distribution. 2011 irs form 1040   Its transfer does not affect the rollover treatment of the eligible portion of the transferred amounts. 2011 irs form 1040 However, the ineligible portion is subject to the traditional IRA contribution limits and may create an excess IRA contribution subject to a 6% excise tax (see chapter 1 of Publication 590). 2011 irs form 1040 Qualified domestic relations order. 2011 irs form 1040   You may be able to roll over tax free all or any part of an eligible rollover distribution from a 403(b) plan that you receive under a qualified domestic relations order (QDRO). 2011 irs form 1040 If you receive the interest in the 403(b) plan as an employee's spouse or former spouse under a QDRO, all of the rollover rules apply to you as if you were the employee. 2011 irs form 1040 You can roll over your interest in the plan to a traditional IRA or another 403(b) plan. 2011 irs form 1040 For more information on the treatment of an interest received under a QDRO, see Publication 575. 2011 irs form 1040 Spouses of deceased employees. 2011 irs form 1040   If you are the spouse of a deceased employee, you can roll over the qualifying distribution attributable to the employee. 2011 irs form 1040 You can make the rollover to any eligible retirement plan. 2011 irs form 1040   After you roll money and other property over from a 403(b) plan to an eligible retirement plan, and you take a distribution from that plan, you will not be eligible to receive the capital gain treatment or the special averaging treatment for the distribution. 2011 irs form 1040 Second rollover. 2011 irs form 1040   If you roll over a qualifying distribution to a traditional IRA, you can, if certain conditions are satisfied, later roll the distribution into another 403(b) plan. 2011 irs form 1040 For more information, see IRA as a holding account (conduit IRA) for rollovers to other eligible plans in chapter 1 of Publication 590. 2011 irs form 1040 Nonspouse beneficiary. 2011 irs form 1040   A nonspouse beneficiary may make a direct rollover of a distribution from a 403(b) plan of a deceased participant if the rollover is a direct transfer to an inherited IRA established to receive the distribution. 2011 irs form 1040 If the rollover is a direct trustee-to-trustee transfer to an IRA established to receive the distribution: The transfer will be treated as an eligible rollover distribution. 2011 irs form 1040 The IRA will be considered an inherited account. 2011 irs form 1040 The required minimum distribution rules that apply in instances where the participant dies before the entire interest is distributed will apply to the transferred IRA. 2011 irs form 1040    For more information on IRAs, see Publication 590. 2011 irs form 1040 Frozen deposits. 2011 irs form 1040   The 60-day period usually allowed for completing a rollover is extended for any time that the amount distributed is a frozen deposit in a financial institution. 2011 irs form 1040 The 60-day period cannot end earlier than 10 days after the deposit ceases to be a frozen deposit. 2011 irs form 1040   A frozen deposit is any deposit that on any day during the 60-day period cannot be withdrawn because: The financial institution is bankrupt or insolvent, or The state where the institution is located has placed limits on withdrawals because one or more banks in the state are (or are about to be) bankrupt or insolvent. 2011 irs form 1040 Gift Tax If, by choosing or not choosing an election, or option, you provide an annuity for your beneficiary at or after your death, you may have made a taxable gift equal to the value of the annuity. 2011 irs form 1040 Joint and survivor annuity. 2011 irs form 1040   If the gift is an interest in a joint and survivor annuity where only you and your spouse have the right to receive payments, the gift will generally be treated as qualifying for the unlimited marital deduction. 2011 irs form 1040 More information. 2011 irs form 1040   For information on the gift tax, see Publication 559, Survivors, Executors, and Administrators. 2011 irs form 1040 Prev  Up  Next   Home   More Online Publications
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Questions and Answers on the Individual Shared Responsibility Provision


Basic Information

1. What is the individual shared responsibility provision?

Under the Affordable Care Act, the federal government, state governments, insurers, employers and individuals are given shared responsibility to reform and improve the availability, quality and affordability of health insurance coverage in the United States. Starting in 2014, the individual shared responsibility provision calls for each individual to have minimum essential health coverage (known as minimum essential coverage) for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.

2. Who is subject to the individual shared responsibility provision?

The provision applies to individuals of all ages, including children. The adult or married couple who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the payment if the dependent does not have coverage or an exemption.

3. When does the individual shared responsibility provision go into effect?

The provision goes into effect on Jan. 1, 2014. It applies to each month in the calendar year. 

4.  Is transition relief available in certain circumstances?

Yes. Notice 2013-42, published on June 26, 2013, provides transition relief from the shared responsibility payment for individuals who are eligible to enroll in eligible employer-sponsored health plans with a plan year other than a calendar year (non-calendar year plans) if the plan year begins in 2013 and ends in 2014 (2013-2014 plan year). The transition relief applies to an employee, or an individual having a relationship to the employee. The transition relief begins in January 2014 and continues through the month in which the 2013-2014 plan year ends.

In addition, Notice 2014-10, published on Jan. 23, 2014, provides transition relief for individuals covered under certain limited-benefit government-sponsored programs. Coverage under these programs is not minimum essential coverage unless it is designated as such by the Department of Health and Human Services. Under Notice 2014-10, individuals who have coverage under these government-sponsored programs will not be held liable for the shared responsibility payment for months in 2014 when they have that coverage. The specific government-sponsored programs are optional family planning coverage of family services under title XIX of the Social Security Act, optional coverage of tuberculosis-related services under title XIX of the Social Security Act, coverage of pregnancy-related services under title XIX of the Social Security Act, coverage limited to treatment of emergency medical conditions (in accordance with section 1611(b)(12)(A) of title 8 of the United States Code) under title XIX of the Social Security Act, coverage for medically needy individuals under title XIX of the Social Security Act, coverage authorized under section 1115(a)(2) of the Social Security Act, limited-benefit TRICARE coverage of space available care provided under chapter 55 of title 10 of the United States Code and limited-benefit TRICARE coverage of line of duty care under chapter 55 of title 10 of the United States Code.  

5. What counts as minimum essential coverage?

Minimum essential coverage includes the following:

  • Employer-sponsored coverage, including self-insured plans, COBRA coverage and retiree coverage
  • Coverage purchased in the individual market, including a qualified health plan offered by the Health Insurance Marketplace 
  • Medicare Part A coverage and Medicare Advantage plans
  • Most Medicaid coverage
  • Children's Health Insurance Program (CHIP) coverage
  • Certain types of veterans health coverage administered by the Veterans Administration
  • Most types of TRICARE coverage under chapter 55 of title 10 of the United States Code
  • Coverage provided to Peace Corps volunteers
  • Coverage under the Nonappropriated Fund Health Benefit Program
  • Refugee Medical Assistance supported by the Administration for Children and Families
  • Self-funded health coverage offered to students by universities for plan or policy years that begin on or before Dec. 31, 2014 (for later plan or policy years, sponsors of these programs may apply to HHS to be recognized as minimum essential coverage)
  • State high risk pools for plan or policy years that begin on or before Dec. 31, 2014 (for later plan or policy years, sponsors of these program may apply to HHS to be recognized as minimum essential coverage)
  • Other coverage recognized by the Secretary of HHS as minimum essential coverage

Minimum essential coverage does not include coverage providing only limited benefits, such as the following:

  • Coverage consisting solely of excepted benefits, such as:
    • Stand-alone vision care or dental care
    • Workers' compensation
    • Accident or disability policies
  • Medicaid providing only family planning services
  • Medicaid providing only tuberculosis-related services
  • Medicaid providing only coverage limited to treatment of emergency medical conditions
  •  Pregnancy-related Medicaid coverage*
  • Medicaid coverage for the medically needy*
  • Section 1115 Medicaid demonstration projects*
  • Space available TRICARE coverage provided under chapter 55 of title 10 of the United States Code for individuals who are not eligible for TRICARE coverage for health care services from private sector providers*
  • Line of duty TRICARE coverage provided under chapter 55 of title 10 of the United States Code*

* These categories of coverage are generally not minimum essential coverage. However, to the extent that certain programs within these categories provide comprehensive coverage, the Secretary of HHS may recognize these programs as minimum essential coverage in the future. The IRS in Notice 2014-10 announced relief from the shared responsibility payment for months in 2014 in which individuals are covered under any of these programs to the extent that they are not minimum essential coverage. Information will be made available later about how the income tax return will take account of coverage under one of these programs. 

6. What are the statutory exemptions from the requirement to obtain minimum essential coverage?

  1. Religious conscience. You are a member of a religious sect that is recognized as conscientiously opposed to accepting any insurance benefits. The Social Security Administration administers the process for recognizing these sects according to the criteria in the law.
  2. Health care sharing ministry. You are a member of a recognized health care sharing ministry.
  3. Indian tribes. You are (1) a member of a federally recognized Indian tribe or (2) an individual eligible for services through an Indian care provider.
  4. Income below the income tax return filing requirement. Your income is below the minimum threshold for filing a tax return. The requirement to file a federal tax return depends on your filing status, age and types and amounts of income. To find out if you are required to file a federal tax return, use the IRS Interactive Tax Assistant (ITA).
  5. Short coverage gap. You went without coverage for less than three consecutive months during the year. For more information, see question 22.
  6. Hardship. You have suffered a hardship that makes you unable to obtain coverage, as defined in final regulations issued by the Department of Health and Human Services. See question 21 for more information on claiming hardship exemptions..
  7. Affordability. You can’t afford coverage because the minimum amount you must pay for the premiums is more than eight percent of your household income.
  8. Incarceration. You are in a jail, prison, or similar penal institution or correctional facility after the disposition of charges against you.
  9. Not lawfully present. You are not a U.S. citizen, a U.S. national or an alien lawfully present in the U.S.

7. What do I need to do if I want to be sure I have minimum essential coverage or an exemption for 2014?

The vast majority of coverage that people have today counts as minimum essential coverage. For those who do not have coverage, who anticipate discontinuing the coverage they have currently, or who want to explore whether more affordable options are available, the Health Insurance Marketplace is open in every state and the District of Columbia. The Marketplace helps individuals compare available coverage options, assess their eligibility for financial assistance and find minimum essential coverage that fits their budget.

For those seeking an exemption from the individual responsibility provision, the Marketplace is able to provide certificates of exemption for many of the exemption categories. HHS has issued final regulations on how the Health Insurance Marketplace grants these exemptions. Individuals will also be able to claim certain exemptions for 2014 when they file their federal income tax returns in 2015. Individuals who are not required to file a federal income tax return because their gross income falls below the return filing threshold do not need to take any further action to secure an exemption. See question 21 for further information on how to claim an exemption.

For more information about the Marketplace, visit the Health Insurance Marketplace website. For more information about financial assistance, see our Questions and Answers on the premium tax credit.

8. Is more detailed information available about the individual shared responsibility provision?

Yes. The Treasury Department and the IRS have issued final regulations on the new individual shared responsibility provision, and the IRS has created an individual shared responsibility page. In addition, the Treasury Department and the IRS have issued proposed regulations, which provide guidance on additional issues that were identified in the preamble to the final regulations. Additional information on exemptions and minimum essential coverage is available in final regulations issued by the Department of Health and Human Services and in a Shared Responsibility Provision Question and Answer issued by the Centers for Medicare & Medicaid Services

Who is Affected?

9. Are children subject to the individual shared responsibility provision?

Yes. Each child must have minimum essential coverage or qualify for an exemption for each month in the calendar year. Otherwise, the adult or married couple who can claim the child as a dependent for federal income tax purposes will generally owe a shared responsibility payment for the child..

10. Are senior citizens subject to the individual shared responsibility provision?

Yes. Senior citizens must have minimum essential coverage or qualify for an exemption for each month in a calendar year. Both Medicare Part A and Medicare Part C (also known as Medicare Advantage) qualify as minimum essential coverage.  

11. Are all individuals living in the United States subject to the individual shared responsibility provision?

All U.S. citizens living in the United States are subject to the individual shared responsibility provision as are all permanent residents and all foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes. Foreign nationals who live in the United States for a short enough period that they do not become resident aliens for federal income tax purposes are not subject to the individual shared responsibility payment even though they may have to file a U.S. income tax return. The IRS has more information available on when a foreign national becomes a resident alien for federal income tax purposes.

12. Are US citizens living abroad subject to the individual shared responsibility provision?

Yes. However, U.S. citizens who are not physically present in the United States for at least 330 full days within a 12-month period are treated as having minimum essential coverage for that 12-month period. In addition, U.S. citizens who are bona fide residents of a foreign country (or countries) for an entire taxable year are treated as having minimum essential coverage for that year. In general, these are individuals who qualify for a foreign earned income exclusion under section 911 of the Internal Revenue Code. Individuals may qualify for this rule even if they cannot use the exclusion for all of their foreign earned income because, for example, they are employees of the United States. Individuals that qualify for this rule need take no further action to comply with the individual shared responsibility provision during the months when they qualify. See Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, for further information on the foreign earned income exclusion.  

U.S. citizens who meet neither the physical presence nor residency requirements will need to maintain minimum essential coverage, qualify for an exemption or make a shared responsibility payment for each month of the year. For this purpose, minimum essential coverage includes a group health plan provided by an overseas employer. One exemption that may be particularly relevant to U.S. citizens living abroad for a small part of a year is the exemption for a short coverage gap. This exemption provides that no shared responsibility payment will be due for a once-per-year gap in coverage that lasts less than three months.  

13. Are residents of the territories subject to the individual shared responsibility provision?

All bona fide residents of the United States territories are treated by law as having minimum essential coverage. They are not required to take any action to comply with the individual shared responsibility provision.

Minimum Essential Coverage

14. If I receive my coverage from my spouse’s employer, will I have minimum essential coverage?

Yes. Employer-sponsored coverage is generally minimum essential coverage. (See question 5 for information on specialized types of coverage that are not minimum essential coverage.) If an employee enrolls in employer-sponsored coverage that provides minimum value for himself and his family, the employee and all of the covered family members have minimum essential coverage.

15. Do my spouse and dependent children have to be covered under the same policy or plan that covers me?

No. You, your spouse and your dependent children do not have to be covered under the same policy or plan. However, you, your spouse and each dependent child for whom you may claim a personal exemption on your federal income tax return must have minimum essential coverage or qualify for an exemption, or you will owe a shared responsibility payment when you file a return.

16. My employer tells me that our company’s health plan is “grandfathered.” Does my employer’s plan provide minimum essential coverage?

Yes. Grandfathered group health plans provide minimum essential coverage.

17. I am a retiree, and I am too young to be eligible for Medicare. I receive my health coverage through a retiree plan made available by my former employer. Is the retiree plan minimum essential coverage?

Yes. Retiree health plans are generally minimum essential coverage.

18. I work for a local government that provides me with health coverage. Is my coverage minimum essential coverage?

Yes. Employer-sponsored coverage is minimum essential coverage regardless of whether the employer is a governmental, nonprofit or for-profit entity.

19. Do I have to be covered for an entire calendar month to avoid the shared responsibility payment liability for not having minimum essential coverage for that month?

No. You will be treated as having minimum essential coverage for a month as long as you have coverage for at least one day during that month.

20. If I change health coverage during the year and end up with a gap when I am not covered, will I owe a payment?

Individuals are treated as having minimum essential coverage for a calendar month if they have coverage for at least one day during that month. Additionally, as long as the gap in coverage is less than three months, you may qualify for an exemption and not owe a payment. See question 22 for more information on the exemption for a short coverage gap.

Exemptions

21. If I think I qualify for an exemption, how do I obtain it?

It depends upon the exemption for which you qualify.

  • The religious conscience exemption and most hardship exemptions are available only by going to the Health Insurance Marketplace and applying for an exemption certificate. Information on obtaining these exemptions is available in final rules issued by the Department of Health and Human Services.
  • The exemptions for members of federally recognized Indian tribes, members of health care sharing ministries and individuals who are incarcerated are available either by going to a Marketplace or Exchange and applying for an exemption certificate or by claiming the exemption as part of filing a federal income tax return.
  • The exemptions for lack of affordable coverage, a short coverage gap, certain hardships, household income below the filing threshold and individuals who are not lawfully present in the United States may be claimed only as part of filing a federal income tax return.

22. What qualifies as a short coverage gap?

In general, a gap in coverage that lasts less than three months qualifies as a short coverage gap. If an individual has more than one short coverage gap during a year, the short coverage gap exemption only applies to the first gap.

23. If my income is so low that I am not required to file a federal income tax return, do I need to do anything special to claim an exemption from the individual shared responsibility provision?

No. If you are not required to file a federal income tax return for a year because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption. If you are not required to file a tax return for a year but file one anyway, you will be able to claim the exemption on your tax return.

24. If I am exempt from the shared responsibility payment, can I still be eligible for the premium tax credit?

In many cases, yes, but it depends upon the exemption. If you are exempt because you are incarcerated or because you are not lawfully present in the United States, you are not eligible to enroll in a qualified health plan through the Marketplace and therefore cannot claim a premium tax credit. However, individuals with other types of exemptions may obtain coverage through the Marketplace and claim a premium tax credit if they otherwise qualify for the credit.

Reporting Coverage or Exemptions or Making Payments

25. Will I have to do something on my federal income tax return to show that I had coverage or an exemption?

The individual shared responsibility provision goes into effect in 2014. You will not have to account for coverage or exemptions or to make any payments until you file your 2014 federal income tax return in 2015. Information will be made available later about how the income tax return will take account of coverage and exemptions. Insurers will be required to provide everyone that they cover each year with information that will help them demonstrate they had coverage beginning with the 2015 tax year.

26. What happens if I do not have minimum essential coverage or an exemption, and I cannot afford to make the shared responsibility payment when filing my tax return?

The IRS routinely works with taxpayers who owe amounts they cannot afford to pay. The law prohibits the IRS from using liens or levies to collect any individual shared responsibility payment. However, if you owe a shared responsibility payment, the IRS may offset that liability against any tax refund that may be due to you.

Page Last Reviewed or Updated: 25-Mar-2014

The 2011 Irs Form 1040

2011 irs form 1040 2. 2011 irs form 1040   The Tax and Filing Requirements Table of Contents Returns and Filing Requirements Payment of TaxFederal Tax Deposits Must be Made by Electronic Funds Transfer All organizations subject to the tax on unrelated business income, except the exempt trusts described in section 511(b)(2), are taxable at corporate rates on that income. 2011 irs form 1040 All exempt trusts subject to the tax on unrelated business income that, if not exempt, would be taxable as trusts are taxable at trust rates on that income. 2011 irs form 1040 However, an exempt trust may not claim the deduction for a personal exemption that is normally allowed to a trust. 2011 irs form 1040 The tax is imposed on the organization's unrelated business taxable income (described in chapter 4). 2011 irs form 1040 The tax is reduced by any applicable tax credits, including the general business credits (such as the investment credit) and the foreign tax credit. 2011 irs form 1040 Alternative minimum tax. 2011 irs form 1040   Organizations liable for tax on unrelated business income may be liable for alternative minimum tax on certain adjustments and tax preference items. 2011 irs form 1040 Returns and Filing Requirements An exempt organization subject to the tax on unrelated business income must file Form 990-T and attach any required supporting schedules and forms. 2011 irs form 1040 The obligation to file Form 990-T is in addition to the obligation to file any other required returns. 2011 irs form 1040 Form 990-T is required if the organization's gross income from unrelated businesses is $1,000 or more. 2011 irs form 1040 An exempt organization must report income from all its unrelated businesses on a single Form 990-T. 2011 irs form 1040 Each organization must file a separate Form 990-T, except section 501(c)(2) title holding corporations and organizations receiving their earnings that file a consolidated return under section 1501. 2011 irs form 1040 The various provisions of tax law relating to accounting periods, accounting methods, at-risk limits (described in section 465), assessments, and collection penalties that apply to tax returns generally also apply to Form 990-T. 2011 irs form 1040 When to file. 2011 irs form 1040   The Form 990-T of an employees' trust described in section 401(a), an IRA (including a traditional, SEP, SIMPLE, Roth, or Coverdell IRA), or an MSA must be filed by the 15th day of the 4th month after the end of its tax year. 2011 irs form 1040 The Form 990-T of any other exempt organization must be filed by the 15th day of the 5th month after the end of its tax year. 2011 irs form 1040 If the due date falls on a Saturday, Sunday, or legal holiday, the return is due by the next business day. 2011 irs form 1040 Extension of time to file. 2011 irs form 1040   A Form 990-T filer may request an automatic 3-month (6 months for corporation) extension of time to file a return by submitting Form 8868, Application for Extension of Time To File an Exempt Organization Return. 2011 irs form 1040 The Form 990-T filer may also use Form 8868 to apply for an additional (not automatic) 3-month extension to file the return if the original 3-month extension was not enough time. 2011 irs form 1040 Public Inspection Requirements of Section 501(c)(3) Organizations. 2011 irs form 1040   Under section 6104(d), a section 501(c)(3) organization that has gross income from an unrelated trade or business of $1,000 or more must make its annual exempt organization business income tax return (including amended returns) available for public inspection. 2011 irs form 1040    A section 501(c)(3) organization filing the Form 990-T only to request a credit for certain federal excise taxes paid does not have to make the Form 990-T available for public inspection. 2011 irs form 1040 Payment of Tax Estimated tax. 2011 irs form 1040   A tax-exempt organization must make estimated tax payments if it expects its tax (unrelated business income tax after certain adjustments) to be $500 or more. 2011 irs form 1040 Estimated tax payments are generally due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. 2011 irs form 1040 If any due date falls on a Saturday, Sunday, or legal holiday, the payment is due on the next business day. 2011 irs form 1040   Any organization that fails to pay the proper estimated tax when due may be charged an underpayment penalty for the period of underpayment. 2011 irs form 1040 Generally, to avoid the estimated tax penalty, the organization must make estimated tax payments that total 100% of the organization's current tax year liability. 2011 irs form 1040 However, an organization can base its required estimated tax payments on 100% of the tax shown on its return for the preceding year (unless no tax is shown) if its taxable income for each of the 3 preceding tax years was less than $1 million. 2011 irs form 1040 If an organization's taxable income for any of those years was $1 million or more, it can base only its first required installment payment on its last year's tax. 2011 irs form 1040   All tax-exempt organizations should use Form 990-W (Worksheet), to figure their estimated tax. 2011 irs form 1040    Tax due with Form 990-T. 2011 irs form 1040   Any tax due with Form 990-T must be paid in full when the return is filed, but no later than the date the return is due (determined without extensions). 2011 irs form 1040 Federal Tax Deposits Must be Made by Electronic Funds Transfer You must use electronic funds transfer to make all federal deposits (such as deposits of estimated tax, employment tax, and excise tax). 2011 irs form 1040 Forms 8109 and 8109-B, Federal Tax Deposit Coupon, are no longer in use. 2011 irs form 1040 Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). 2011 irs form 1040 If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make deposits on your behalf. 2011 irs form 1040 Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. 2011 irs form 1040 EFTPS is a free service provided by the Department of Treasury. 2011 irs form 1040 Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. 2011 irs form 1040 To get more information about EFTPS or to enroll in EFTPS, visit www. 2011 irs form 1040 eftps. 2011 irs form 1040 gov or call 1-800-555-4477. 2011 irs form 1040 Additional information about EFTPS is available in Publication 966, The Secure Way to Pay Your Federal Taxes. 2011 irs form 1040 Deposits on business days only. 2011 irs form 1040   If a deposit is required to be made on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. 2011 irs form 1040 A business day is any day other than a Saturday, Sunday, or legal holiday. 2011 irs form 1040 For example, if a deposit is required to be made on a Friday and Friday is a legal holiday, the deposit will be considered timely if it is made by the following Monday (if that Monday is a business day). 2011 irs form 1040 The term "legal holiday" means any legal holiday in the District of Columbia. 2011 irs form 1040 Prev  Up  Next   Home   More Online Publications