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2013 Federal Tax Forms 1040ez

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2013 Federal Tax Forms 1040ez

2013 federal tax forms 1040ez Publication 1212 - Main Content Table of Contents Definitions Debt Instruments on the OID List Debt Instruments Not on the OID List Information for Brokers and Other MiddlemenShort-Term Obligations Redeemed at Maturity Long-Term Debt Instruments Certificates of Deposit Bearer Bonds and Coupons Backup Withholding Information for Owners of OID Debt InstrumentsExceptions. 2013 federal tax forms 1040ez Adjustment for premium. 2013 federal tax forms 1040ez Adjustment for acquisition premium. 2013 federal tax forms 1040ez Adjustment for market discount. 2013 federal tax forms 1040ez Form 1099-OID How To Report OID Figuring OID on Long-Term Debt Instruments Figuring OID on Stripped Bonds and Coupons How To Get Tax HelpLow Income Taxpayer Clinics Definitions The following terms are used throughout this publication. 2013 federal tax forms 1040ez “Original issue discount” is defined first. 2013 federal tax forms 1040ez The other terms are listed alphabetically. 2013 federal tax forms 1040ez Original issue discount (OID). 2013 federal tax forms 1040ez   OID is a form of interest. 2013 federal tax forms 1040ez It is the excess of a debt instrument's stated redemption price at maturity over its issue price (acquisition price for a stripped bond or coupon). 2013 federal tax forms 1040ez Zero coupon bonds and debt instruments that pay no stated interest until maturity are examples of debt instruments that have OID. 2013 federal tax forms 1040ez Accrual period. 2013 federal tax forms 1040ez   An accrual period is an interval of time used to measure OID. 2013 federal tax forms 1040ez The length of an accrual period can be 6 months, a year, or some other period, depending on when the debt instrument was issued. 2013 federal tax forms 1040ez Acquisition premium. 2013 federal tax forms 1040ez   Acquisition premium is the excess of a debt instrument's adjusted basis immediately after purchase, including purchase at original issue, over the debt instrument's adjusted issue price at that time. 2013 federal tax forms 1040ez A debt instrument does not have acquisition premium, however, if the debt instrument was purchased at a premium. 2013 federal tax forms 1040ez See Premium, later. 2013 federal tax forms 1040ez Adjusted issue price. 2013 federal tax forms 1040ez   The adjusted issue price of a debt instrument at the beginning of an accrual period is used to figure the OID allocable to that period. 2013 federal tax forms 1040ez In general, the adjusted issue price at the beginning of the debt instrument's first accrual period is its issue price. 2013 federal tax forms 1040ez The adjusted issue price at the beginning of any subsequent accrual period is the sum of the issue price and all the OID includible in income before that accrual period minus any payment previously made on the debt instrument, other than a payment of qualified stated interest. 2013 federal tax forms 1040ez Debt instrument. 2013 federal tax forms 1040ez   The term “debt instrument” means any instrument or contractual arrangement that constitutes indebtedness under general principles of federal income tax law (including, for example, a bond, debenture, note, certificate, or other evidence of indebtedness). 2013 federal tax forms 1040ez It generally does not include an annuity contract. 2013 federal tax forms 1040ez Issue price. 2013 federal tax forms 1040ez   For debt instruments listed in Section I-A and Section I-B, the issue price generally is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of these instruments was sold. 2013 federal tax forms 1040ez Market discount. 2013 federal tax forms 1040ez   Market discount arises when a debt instrument purchased in the secondary market has decreased in value since its issue date, generally because of an increase in interest rates. 2013 federal tax forms 1040ez An OID debt instrument has market discount if your adjusted basis in the debt instrument immediately after you acquired it (usually its purchase price) was less than the debt instrument's issue price plus the total OID that accrued before you acquired it. 2013 federal tax forms 1040ez The market discount is the difference between the issue price plus accrued OID and your adjusted basis. 2013 federal tax forms 1040ez Premium. 2013 federal tax forms 1040ez   A debt instrument is purchased at a premium if its adjusted basis immediately after purchase is greater than the total of all amounts payable on the debt instrument after the purchase date, other than qualified stated interest. 2013 federal tax forms 1040ez The premium is the excess of the adjusted basis over the payable amounts. 2013 federal tax forms 1040ez See Publication 550 for information on the tax treatment of bond premium. 2013 federal tax forms 1040ez Qualified stated interest. 2013 federal tax forms 1040ez   In general, qualified stated interest is stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually over the term of the debt instrument at a single fixed rate. 2013 federal tax forms 1040ez Stated redemption price at maturity. 2013 federal tax forms 1040ez   A debt instrument's stated redemption price at maturity is the sum of all amounts (principal and interest) payable on the debt instrument other than qualified stated interest. 2013 federal tax forms 1040ez Yield to maturity (YTM). 2013 federal tax forms 1040ez   In general, the YTM is the discount rate that, when used in figuring the present value of all principal and interest payments, produces an amount equal to the issue price of the debt instrument. 2013 federal tax forms 1040ez The YTM is generally shown on the face of the debt instrument or in the literature you receive from your broker. 2013 federal tax forms 1040ez If you do not have this information, consult your broker, tax advisor, or the issuer. 2013 federal tax forms 1040ez Debt Instruments on the OID List The OID list on the IRS website can be used by brokers and other middlemen to prepare information returns. 2013 federal tax forms 1040ez If you own a listed debt instrument, you generally should not rely on the information in the OID list to determine (or compare) the OID to be reported on your tax return. 2013 federal tax forms 1040ez The OID amounts listed are figured without reference to the price or date at which you acquired the debt instrument. 2013 federal tax forms 1040ez For information about determining the OID to be reported on your tax return, see the instructions for figuring OID under Information for Owners of OID Debt Instruments, later. 2013 federal tax forms 1040ez The following discussions explain what information is contained in each section of the list. 2013 federal tax forms 1040ez Section I. 2013 federal tax forms 1040ez   This section contains publicly offered, long-term debt instruments. 2013 federal tax forms 1040ez Section I-A: Corporate Debt Instruments Issued Before 1985. 2013 federal tax forms 1040ez Section I-B: Corporate Debt Instruments Issued After 1984. 2013 federal tax forms 1040ez Section I-C: Inflation-Indexed Debt Instruments. 2013 federal tax forms 1040ez For each publicly offered debt instrument in Section I, the list contains the following information. 2013 federal tax forms 1040ez The name of the issuer. 2013 federal tax forms 1040ez The Committee on Uniform Security Identification Procedures (CUSIP) number. 2013 federal tax forms 1040ez The issue date. 2013 federal tax forms 1040ez The maturity date. 2013 federal tax forms 1040ez The issue price expressed as a percent of principal or of stated redemption price at maturity. 2013 federal tax forms 1040ez The annual stated or coupon interest rate. 2013 federal tax forms 1040ez (This rate is shown as 0. 2013 federal tax forms 1040ez 00 if no annual interest payments are provided. 2013 federal tax forms 1040ez ) The yield to maturity will be added to Section I-B for bonds issued after December 31, 2006. 2013 federal tax forms 1040ez The total OID accrued up to January 1 of a calendar year. 2013 federal tax forms 1040ez (This information is not available for every instrument. 2013 federal tax forms 1040ez ) For long-term debt instruments issued after July 1, 1982, the daily OID for the accrual periods falling in a calendar year and a subsequent year. 2013 federal tax forms 1040ez The total OID per $1,000 of principal or maturity value for a calendar year and a subsequent year. 2013 federal tax forms 1040ez Section II. 2013 federal tax forms 1040ez   This section contains stripped coupons and principal components of U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Treasury and Government-Sponsored Enterprise debt instruments. 2013 federal tax forms 1040ez These stripped components are available through the Department of the Treasury's Separate Trading of Registered Interest and Principal of Securities (STRIPS) program and government-sponsored enterprises such as the Resolution Funding Corporation. 2013 federal tax forms 1040ez This section also includes debt instruments backed by U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Treasury securities that represent ownership interests in those securities. 2013 federal tax forms 1040ez   The obligations listed in Section II are arranged by maturity date. 2013 federal tax forms 1040ez The amounts listed are the total OID for a calendar year per $1,000 of redemption price. 2013 federal tax forms 1040ez Section III. 2013 federal tax forms 1040ez   This section contains short-term discount obligations. 2013 federal tax forms 1040ez Section III-A: Short-Term U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Treasury Bills. 2013 federal tax forms 1040ez Section III-B: Federal Home Loan Banks. 2013 federal tax forms 1040ez Section III-C: Federal National Mortgage Association. 2013 federal tax forms 1040ez Section III-D: Federal Farm Credit Banks. 2013 federal tax forms 1040ez Section III-E: Federal Home Loan Mortgage Corporation. 2013 federal tax forms 1040ez Section III-F: Federal Agricultural Mortgage Corporation. 2013 federal tax forms 1040ez    Information that supplements Section III-A is available on the Internet at http://www. 2013 federal tax forms 1040ez treasurydirect. 2013 federal tax forms 1040ez gov/tdhome. 2013 federal tax forms 1040ez htm. 2013 federal tax forms 1040ez   The short-term obligations listed in this section are arranged by maturity date. 2013 federal tax forms 1040ez For each obligation, the list contains the CUSIP number, maturity date, issue date, issue price (expressed as a percent of principal), and discount to be reported as interest for a calendar year per $1,000 of redemption price. 2013 federal tax forms 1040ez Brokers and other middlemen should rely on the issue price information in Section III only if they are unable to determine the price actually paid by the owner. 2013 federal tax forms 1040ez Debt Instruments Not on the OID List The list of debt instruments discussed earlier does not contain the following items. 2013 federal tax forms 1040ez U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez savings bonds. 2013 federal tax forms 1040ez Certificates of deposit and other face-amount certificates issued at a discount, including syndicated certificates of deposit. 2013 federal tax forms 1040ez Obligations issued by tax-exempt organizations. 2013 federal tax forms 1040ez OID debt instruments that matured or were entirely called by the issuer before the tables were posted on the IRS website. 2013 federal tax forms 1040ez Mortgage-backed securities and mortgage participation certificates. 2013 federal tax forms 1040ez Long-term OID debt instruments issued before May 28, 1969. 2013 federal tax forms 1040ez Short-term obligations, other than the obligations listed in Section III. 2013 federal tax forms 1040ez Debt instruments issued at a discount by states or their political subdivisions. 2013 federal tax forms 1040ez REMIC regular interests and CDOs. 2013 federal tax forms 1040ez Commercial paper and banker's acceptances issued at a discount. 2013 federal tax forms 1040ez Obligations issued at a discount by individuals. 2013 federal tax forms 1040ez Foreign obligations not traded in the United States and obligations not issued in the United States. 2013 federal tax forms 1040ez Information for Brokers and Other Middlemen The following discussions contain specific instructions for brokers and middlemen who hold or redeem a debt instrument for the owner. 2013 federal tax forms 1040ez In general, you must file a Form 1099 for the debt instrument if the interest or OID to be included in the owner's income for a calendar year totals $10 or more. 2013 federal tax forms 1040ez You also must file a Form 1099 if you were required to deduct and withhold tax, even if the interest or OID is less than $10. 2013 federal tax forms 1040ez See Backup Withholding, later. 2013 federal tax forms 1040ez If you must file a Form 1099, furnish a copy to the owner of the debt instrument by January 31 in the year it is due. 2013 federal tax forms 1040ez File all your Forms 1099 with the IRS, accompanied by Form 1096, by February 28 in the year it is due (March 31 if you file electronically). 2013 federal tax forms 1040ez Electronic payee statements. 2013 federal tax forms 1040ez   You can issue Form 1099-OID electronically with the consent of the recipient. 2013 federal tax forms 1040ez More information. 2013 federal tax forms 1040ez   For more information, including penalties for failure to file (or furnish) required information returns or statements, see the General Instructions for Certain Information Returns (Forms 1098, 1099, 3921, 3922, 5498, and W-2G) for the appropriate calendar year. 2013 federal tax forms 1040ez Short-Term Obligations Redeemed at Maturity If you redeem a short-term discount obligation for the owner at maturity, you must report the discount as interest on Form 1099-INT. 2013 federal tax forms 1040ez To figure the discount, use the purchase price shown on the owner's copy of the purchase confirmation receipt or similar record, or the price shown in your transaction records. 2013 federal tax forms 1040ez If you sell the obligation for the owner before maturity, you must file Form 1099-B to reflect the gross proceeds to the seller. 2013 federal tax forms 1040ez Do not report the accrued discount to the date of sale on either Form 1099-INT or Form 1099-OID. 2013 federal tax forms 1040ez If the owner's purchase price cannot be determined, figure the discount as if the owner had purchased the obligation at its original issue price. 2013 federal tax forms 1040ez A special rule is used to determine the original issue price for information reporting on U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Treasury bills (T-bills) listed in Section III-A. 2013 federal tax forms 1040ez Under this rule, you treat as the original issue price of the T-bill the noncompetitive (weighted average of accepted auction bids) discount price for the longest-maturity T-bill maturing on the same date as the T-bill being redeemed. 2013 federal tax forms 1040ez This noncompetitive discount price is the issue price (expressed as a percent of principal) shown in Section III-A. 2013 federal tax forms 1040ez A similar rule is used to figure the discount on short-term discount obligations issued by the organizations listed in Section III-B through Section III-F. 2013 federal tax forms 1040ez Example 1. 2013 federal tax forms 1040ez There are 13-week and 26-week T-bills maturing on the same date as the T-bill being redeemed. 2013 federal tax forms 1040ez The price actually paid by the owner cannot be established by owner or middleman records. 2013 federal tax forms 1040ez You treat as the issue price of the T-bill the noncompetitive discount price (expressed as a percent of principal) shown in Section III-A for a 26-week bill maturing on the same date as the T-bill redeemed. 2013 federal tax forms 1040ez The interest you report on Form 1099-INT is the OID (per $1,000 of principal) shown in Section III-A for that obligation. 2013 federal tax forms 1040ez Long-Term Debt Instruments If you hold a long-term OID debt instrument as a nominee for the true owner, you generally must file Form 1099-OID. 2013 federal tax forms 1040ez For this purpose, you can rely on Section I of the OID list to determine the following information. 2013 federal tax forms 1040ez Whether a debt instrument has OID. 2013 federal tax forms 1040ez The OID to be reported on the Form 1099-OID. 2013 federal tax forms 1040ez In general, you must report OID on publicly offered, long-term debt instruments listed in Section I. 2013 federal tax forms 1040ez You also can report OID on other long-term debt instruments. 2013 federal tax forms 1040ez Form 1099-OID. 2013 federal tax forms 1040ez   On Form 1099-OID for a calendar year show the following information. 2013 federal tax forms 1040ez Box 1. 2013 federal tax forms 1040ez The OID for the actual dates the owner held the debt instruments during a calendar year. 2013 federal tax forms 1040ez To determine this amount, see Figuring OID, next. 2013 federal tax forms 1040ez Box 2. 2013 federal tax forms 1040ez The qualified stated interest paid or credited during the calendar year. 2013 federal tax forms 1040ez Interest reported here is not reported on Form 1099-INT. 2013 federal tax forms 1040ez The qualified stated interest on Treasury inflation-protected securities may be reported on Form 1099-INT in box 3 instead. 2013 federal tax forms 1040ez Box 3. 2013 federal tax forms 1040ez Any interest or principal forfeited because of an early withdrawal that the owner can deduct from gross income. 2013 federal tax forms 1040ez Do not reduce the amounts in boxes 1 and 2 by the forfeiture. 2013 federal tax forms 1040ez Box 4. 2013 federal tax forms 1040ez Any backup withholding for this debt instrument. 2013 federal tax forms 1040ez Box 7. 2013 federal tax forms 1040ez The CUSIP number, if any. 2013 federal tax forms 1040ez If there is no CUSIP number, give a description of the debt instrument, including the abbreviation for the stock exchange, the abbreviation used by the stock exchange for the issuer, the coupon rate, and the year of maturity (for example, NYSE XYZ 12. 2013 federal tax forms 1040ez 50 2006). 2013 federal tax forms 1040ez If the issuer of the debt instrument is other than the payer, show the name of the issuer in this box. 2013 federal tax forms 1040ez Box 8. 2013 federal tax forms 1040ez The OID on a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Treasury obligation for the part of the year the owner held the debt instrument. 2013 federal tax forms 1040ez Box 9. 2013 federal tax forms 1040ez Investment expenses passed on to holders of a single-class REMIC. 2013 federal tax forms 1040ez Boxes 10-12. 2013 federal tax forms 1040ez Use to report any state income tax withheld for this debt instrument. 2013 federal tax forms 1040ez Figuring OID. 2013 federal tax forms 1040ez   You can determine the OID on a long-term debt instrument by using either of the following. 2013 federal tax forms 1040ez Section I of the OID list. 2013 federal tax forms 1040ez The income tax regulations. 2013 federal tax forms 1040ez Using Section I. 2013 federal tax forms 1040ez   If the owner held the debt instrument for the entire calendar year, report the OID shown in Section I for the calendar year. 2013 federal tax forms 1040ez Because OID is listed for each $1,000 of stated redemption price at maturity, you must adjust the listed amount to reflect the debt instrument's actual stated redemption price at maturity. 2013 federal tax forms 1040ez For example, if the debt instrument's stated redemption price at maturity is $500, report one-half the listed OID. 2013 federal tax forms 1040ez   If the owner held the debt instrument for less than the entire calendar year, figure the OID to report as follows. 2013 federal tax forms 1040ez Look up the daily OID for the first accrual period in the calendar year during which the owner held the debt instrument. 2013 federal tax forms 1040ez Multiply the daily OID by the number of days the owner held the debt instrument during that accrual period. 2013 federal tax forms 1040ez Repeat steps (1) and (2) for any remaining accrual periods for the year during which the owner held the debt instrument. 2013 federal tax forms 1040ez Add the results in steps (2) and (3) to determine the owner's OID per $1,000 of stated redemption price at maturity. 2013 federal tax forms 1040ez If necessary, adjust the OID in (4) to reflect the debt instrument's stated redemption price at maturity. 2013 federal tax forms 1040ez Report the result on Form 1099-OID in box 1. 2013 federal tax forms 1040ez Using the income tax regulations. 2013 federal tax forms 1040ez   Instead of using Section I to figure OID, you can use the regulations under sections 1272 through 1275 of the Internal Revenue Code. 2013 federal tax forms 1040ez For example, under the regulations, you can use monthly accrual periods in figuring OID for a debt instrument issued after April 3, 1994, that provides for monthly payments. 2013 federal tax forms 1040ez (If you use Section I-B, the OID is figured using 6-month accrual periods. 2013 federal tax forms 1040ez )   For a general explanation of the rules for figuring OID under the regulations, see Figuring OID on Long-Term Debt Instruments under Information for Owners of OID Debt Instruments, later. 2013 federal tax forms 1040ez Certificates of Deposit If you hold a bank certificate of deposit (CD) as a nominee, you must determine whether the CD has OID and any OID includible in the income of the owner. 2013 federal tax forms 1040ez You must file an information return showing the reportable interest and OID, if any, on the CD. 2013 federal tax forms 1040ez These rules apply whether or not you sold the CD to the owner. 2013 federal tax forms 1040ez Report OID on a CD in the same way as OID on other debt instruments. 2013 federal tax forms 1040ez See Short-Term Obligations Redeemed at Maturity and Long-Term Debt Instruments, earlier. 2013 federal tax forms 1040ez Bearer Bonds and Coupons If a coupon from a bearer bond is presented to you for collection before the bond matures, you generally must report the interest on Form 1099-INT. 2013 federal tax forms 1040ez However, do not report the interest if either of the following apply. 2013 federal tax forms 1040ez You hold the bond as a nominee for the true owner. 2013 federal tax forms 1040ez The payee is a foreign person. 2013 federal tax forms 1040ez See Payments to foreign person under Backup Withholding, later. 2013 federal tax forms 1040ez Because you cannot assume the presenter of the coupon also owns the bond, you should not report OID on the bond on Form 1099-OID. 2013 federal tax forms 1040ez The coupon may have been “stripped” (separated) from the bond and separately purchased. 2013 federal tax forms 1040ez However, if a long-term bearer bond on the OID list is presented to you for redemption upon call or maturity, you should prepare a Form 1099-OID showing the OID for that calendar year, as well as any coupon interest payments collected at the time of redemption. 2013 federal tax forms 1040ez Backup Withholding If you report OID on Form 1099-OID or interest on Form 1099-INT for a calendar year, you may be required to apply backup withholding to the reportable payment at a rate of 28%. 2013 federal tax forms 1040ez The backup withholding is deducted at the time a cash payment is made. 2013 federal tax forms 1040ez See Pub. 2013 federal tax forms 1040ez 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), for more information. 2013 federal tax forms 1040ez Backup withholding generally applies in the following situations. 2013 federal tax forms 1040ez The payee does not give you a taxpayer identification number (TIN). 2013 federal tax forms 1040ez The IRS notifies you that the payee gave an incorrect TIN. 2013 federal tax forms 1040ez The IRS notifies you that the payee is subject to backup withholding due to payee underreporting. 2013 federal tax forms 1040ez For debt instruments acquired after 1983: The payee does not certify, under penalties of perjury, that he or she is not subject to backup withholding under (3), or The payee does not certify, under penalties of perjury, that the TIN given is correct. 2013 federal tax forms 1040ez However, for short-term discount obligations (other than government obligations), bearer bonds and coupons, and U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez savings bonds, backup withholding applies only if the payee does not give you a TIN or gives you an obviously incorrect number for a TIN. 2013 federal tax forms 1040ez Short-term obligations. 2013 federal tax forms 1040ez   Backup withholding applies to OID on a short-term obligation only when the OID is paid at maturity. 2013 federal tax forms 1040ez However, backup withholding applies to any interest payable before maturity when the interest is paid or credited. 2013 federal tax forms 1040ez   If the owner of a short-term obligation at maturity is not the original owner and can establish the purchase price of the obligation, the amount subject to backup withholding must be determined by treating the purchase price as the issue price. 2013 federal tax forms 1040ez However, you can choose to disregard that price if it would require significant manual intervention in the computer or recordkeeping system used for the obligation. 2013 federal tax forms 1040ez If the purchase price of a listed obligation is not established or is disregarded, you must use the issue price shown in Section III. 2013 federal tax forms 1040ez Long-term obligations. 2013 federal tax forms 1040ez   If no cash payments are made on a long-term obligation before maturity, backup withholding applies only at maturity. 2013 federal tax forms 1040ez The amount subject to backup withholding is the OID includible in the owner's gross income for the calendar year when the obligation matures. 2013 federal tax forms 1040ez The amount to be withheld is limited to the cash paid. 2013 federal tax forms 1040ez Registered long-term obligations with cash payments. 2013 federal tax forms 1040ez   If a registered long-term obligation has cash payments before maturity, backup withholding applies when a cash payment is made. 2013 federal tax forms 1040ez The amount subject to backup withholding is the total of the qualified stated interest (defined earlier under Definitions) and OID includible in the owner's gross income for the calendar year when the payment is made. 2013 federal tax forms 1040ez If more than one cash payment is made during the year, the OID subject to withholding for the year must be allocated among the expected cash payments in the ratio that each bears to the total of the expected cash payments. 2013 federal tax forms 1040ez For any payment, the required withholding is limited to the cash paid. 2013 federal tax forms 1040ez Payee not the original owner. 2013 federal tax forms 1040ez   If the payee is not the original owner of the obligation, the OID subject to backup withholding is the OID includible in the gross income of all owners during the calendar year (without regard to any amount paid by the new owner at the time of transfer). 2013 federal tax forms 1040ez The amount subject to backup withholding at maturity of a listed obligation must be determined using the issue price shown in Section I. 2013 federal tax forms 1040ez Bearer long-term obligations with cash payments. 2013 federal tax forms 1040ez   If a bearer long-term obligation has cash payments before maturity, backup withholding applies when the cash payments are made. 2013 federal tax forms 1040ez For payments before maturity, the amount subject to withholding is the qualified stated interest (defined earlier under Definitions) includible in the owner's gross income for the calendar year. 2013 federal tax forms 1040ez For a payment at maturity, the amount subject to withholding is only the total of any qualified stated interest paid at maturity and the OID includible in the owner's gross income for the calendar year when the obligation matures. 2013 federal tax forms 1040ez The required withholding at maturity is limited to the cash paid. 2013 federal tax forms 1040ez Sales and redemptions. 2013 federal tax forms 1040ez   If you report the gross proceeds from a sale, exchange, or redemption of a debt instrument on Form 1099-B for a calendar year, you may be required to withhold 28% of the amount reported. 2013 federal tax forms 1040ez Backup withholding applies in the following situations. 2013 federal tax forms 1040ez The payee does not give you a TIN. 2013 federal tax forms 1040ez The IRS notifies you that the payee gave an incorrect TIN. 2013 federal tax forms 1040ez For debt instruments held in an account opened after 1983, the payee does not certify, under penalties of perjury, that the TIN given is correct. 2013 federal tax forms 1040ez Payments outside the United States to U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez person. 2013 federal tax forms 1040ez   The requirements for backup withholding and information reporting apply to payments of OID and interest made outside the United States to a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez person, a controlled foreign corporation, or a foreign person at least 50% of whose income for the preceding 3-year period is effectively connected with the conduct of a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez trade or business. 2013 federal tax forms 1040ez Payments to foreign person. 2013 federal tax forms 1040ez   The following discussions explain the rules for backup withholding and information reporting on payments to foreign persons. 2013 federal tax forms 1040ez U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez -source amount. 2013 federal tax forms 1040ez   Backup withholding and information reporting are not required for payments of U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez -source OID, interest, or proceeds from a sale or redemption of an OID instrument if the payee has given you proof (generally the appropriate Form W-8 or an acceptable substitute) that the payee is a foreign person. 2013 federal tax forms 1040ez A U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez resident is not a foreign person. 2013 federal tax forms 1040ez For proof of the payee's foreign status, you can rely on the appropriate Form W-8 or on documentary evidence for payments made outside the United States to an offshore account or, in case of broker proceeds, a sale effected outside the United States. 2013 federal tax forms 1040ez Receipt of the appropriate Form W-8 does not relieve you from information reporting and backup withholding if you actually know the payee is a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez person. 2013 federal tax forms 1040ez   For information about the 28% withholding tax that may apply to payments of U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez -source OID or interest to foreign persons, see Publication 515. 2013 federal tax forms 1040ez Foreign-source amount. 2013 federal tax forms 1040ez   Backup withholding and information reporting are not required for payments of foreign-source OID and interest made outside the United States. 2013 federal tax forms 1040ez However, if the payments are made inside the United States, the requirements for backup withholding and information reporting will apply unless the payee has given you the appropriate Form W-8 or acceptable substitute as proof that the payee is a foreign person. 2013 federal tax forms 1040ez More information. 2013 federal tax forms 1040ez   For more information about backup withholding and information reporting on foreign-source amounts or payments to foreign persons, see Regulations section 1. 2013 federal tax forms 1040ez 6049-5. 2013 federal tax forms 1040ez Information for Owners of OID Debt Instruments This section is for persons who prepare their own tax returns. 2013 federal tax forms 1040ez It discusses the income tax rules for figuring and reporting OID on long-term debt instruments. 2013 federal tax forms 1040ez It also includes a similar discussion for stripped bonds and coupons, such as zero coupon bonds available through the Department of the Treasury's STRIPS program and government-sponsored enterprises such as the Resolution Funding Corporation. 2013 federal tax forms 1040ez However, the information provided does not cover every situation. 2013 federal tax forms 1040ez More information can be found in the regulations under sections 1271 through 1275 of the Internal Revenue Code. 2013 federal tax forms 1040ez Including OID in income. 2013 federal tax forms 1040ez   Generally, you include OID in income as it accrues each year, whether or not you receive any payments from the debt instrument issuer. 2013 federal tax forms 1040ez Exceptions. 2013 federal tax forms 1040ez   The rules for including OID in income as it accrues generally do not apply to the following debt instruments. 2013 federal tax forms 1040ez U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez savings bonds. 2013 federal tax forms 1040ez Tax-exempt obligations. 2013 federal tax forms 1040ez (However, see Tax-Exempt Bonds and Coupons, later. 2013 federal tax forms 1040ez ) Obligations issued by individuals before March 2, 1984. 2013 federal tax forms 1040ez Loans of $10,000 or less between individuals who are not in the business of lending money. 2013 federal tax forms 1040ez (The dollar limit includes outstanding prior loans by the lender to the borrower. 2013 federal tax forms 1040ez ) This exception does not apply if a principal purpose of the loan is to avoid any federal tax. 2013 federal tax forms 1040ez   See chapter 1 of Publication 550 for information about the rules for these and other types of discounted debt instruments, such as short-term and market discount obligations. 2013 federal tax forms 1040ez Publication 550 also discusses rules for holders of REMIC interests and CDOs. 2013 federal tax forms 1040ez De minimis rule. 2013 federal tax forms 1040ez   You can treat OID as zero if the total OID on a debt instrument is less than one-fourth of 1% (. 2013 federal tax forms 1040ez 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. 2013 federal tax forms 1040ez Debt instruments with de minimis OID are not listed in this publication. 2013 federal tax forms 1040ez There are special rules to determine the de minimis amount in the case of debt instruments that provide for more than one payment of principal. 2013 federal tax forms 1040ez Also, the de minimis rules generally do not apply to tax-exempt obligations. 2013 federal tax forms 1040ez Example 2. 2013 federal tax forms 1040ez You bought at issuance a 10-year debt instrument with a stated redemption price at maturity of $1,000, issued at $980 with OID of $20. 2013 federal tax forms 1040ez One-fourth of 1% of $1,000 (the stated redemption price) times 10 (the number of full years from the date of original issue to maturity) equals $25. 2013 federal tax forms 1040ez Under the de minimis rule, you can treat the OID as zero because the $20 discount is less than $25. 2013 federal tax forms 1040ez Example 3. 2013 federal tax forms 1040ez Assume the same facts as Example 2, except the debt instrument was issued at $950. 2013 federal tax forms 1040ez You must report part of the $50 OID each year because it is more than $25. 2013 federal tax forms 1040ez Choice to report all interest as OID. 2013 federal tax forms 1040ez   Generally, you can choose to treat all interest on a debt instrument acquired after April 3, 1994, as OID and include it in gross income by using the constant yield method. 2013 federal tax forms 1040ez See Constant yield method under Debt Instruments Issued After 1984, later, for more information. 2013 federal tax forms 1040ez   For this choice, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. 2013 federal tax forms 1040ez For more information, see Regulations section 1. 2013 federal tax forms 1040ez 1272-3. 2013 federal tax forms 1040ez Purchase after date of original issue. 2013 federal tax forms 1040ez   A debt instrument you purchased after the date of original issue may have premium, acquisition premium, or market discount. 2013 federal tax forms 1040ez If so, the OID reported to you on Form 1099-OID may have to be adjusted. 2013 federal tax forms 1040ez For more information, see Showing an OID adjustment under How To Report OID, later. 2013 federal tax forms 1040ez The following rules generally do not apply to contingent payment debt instruments. 2013 federal tax forms 1040ez Adjustment for premium. 2013 federal tax forms 1040ez   If your debt instrument (other than an inflation-indexed debt instrument) has premium, do not report any OID as ordinary income. 2013 federal tax forms 1040ez Your adjustment is the total OID shown on your Form 1099-OID. 2013 federal tax forms 1040ez Adjustment for acquisition premium. 2013 federal tax forms 1040ez   If your debt instrument has acquisition premium, reduce the OID you report. 2013 federal tax forms 1040ez Your adjustment is the difference between the OID shown on your Form 1099-OID and the reduced OID amount figured using the rules explained later under Figuring OID on Long-Term Debt Instruments. 2013 federal tax forms 1040ez Adjustment for market discount. 2013 federal tax forms 1040ez   If your debt instrument has market discount that you choose to include in income currently, increase the OID you report. 2013 federal tax forms 1040ez Your adjustment is the accrued market discount for the year. 2013 federal tax forms 1040ez See Market Discount Bonds in chapter 1 of Publication 550 for information on how to figure accrued market discount and include it in your income currently and for other information about market discount bonds. 2013 federal tax forms 1040ez If you choose to use the constant yield method to figure accrued market discount, also see Figuring OID on Long-Term Debt Instruments, later. 2013 federal tax forms 1040ez The constant yield method of figuring accrued OID, explained in those discussions under Constant yield method, is also used to figure accrued market discount. 2013 federal tax forms 1040ez For more information concerning premium or market discount on an inflation-indexed debt instrument, see Regulations section 1. 2013 federal tax forms 1040ez 1275-7. 2013 federal tax forms 1040ez Sale, exchange, or redemption. 2013 federal tax forms 1040ez   Generally, you treat your gain or loss from the sale, exchange, or redemption of a discounted debt instrument as a capital gain or loss if you held the debt instrument as a capital asset. 2013 federal tax forms 1040ez If you sold the debt instrument through a broker, you should receive Form 1099-B or an equivalent statement from the broker. 2013 federal tax forms 1040ez Use the Form 1099-B or other statement and your brokerage statements to complete Form 8949, and Schedule D (Form 1040). 2013 federal tax forms 1040ez   Your gain or loss is the difference between the amount you realized on the sale, exchange, or redemption and your basis in the debt instrument. 2013 federal tax forms 1040ez Your basis, generally, is your cost increased by the OID you have included in income each year you held it. 2013 federal tax forms 1040ez In general, to determine your gain or loss on a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. 2013 federal tax forms 1040ez   See chapter 4 of Publication 550 for more information about the tax treatment of the sale or redemption of discounted debt instruments. 2013 federal tax forms 1040ez Example 4. 2013 federal tax forms 1040ez Larry, a calendar year taxpayer, bought a corporate debt instrument at original issue for $86,235. 2013 federal tax forms 1040ez 00 on November 1 of Year 1. 2013 federal tax forms 1040ez The 15-year debt instrument matures on October 31 of Year 16 at a stated redemption price of $100,000. 2013 federal tax forms 1040ez The debt instrument provides for semiannual payments of interest at 10%. 2013 federal tax forms 1040ez Assume the debt instrument is a capital asset in Larry's hands. 2013 federal tax forms 1040ez The debt instrument has $13,765. 2013 federal tax forms 1040ez 00 of OID ($100,000 stated redemption price at maturity minus $86,235. 2013 federal tax forms 1040ez 00 issue price). 2013 federal tax forms 1040ez Larry sold the debt instrument for $90,000 on November 1 of Year 4. 2013 federal tax forms 1040ez Including the OID he will report for the period he held the debt instrument in Year 4, Larry has included $4,556. 2013 federal tax forms 1040ez 00 of OID in income and has increased his basis by that amount to $90,791. 2013 federal tax forms 1040ez 00. 2013 federal tax forms 1040ez Larry has realized a loss of $791. 2013 federal tax forms 1040ez 00. 2013 federal tax forms 1040ez All of Larry's loss is capital loss. 2013 federal tax forms 1040ez Form 1099-OID The issuer of the debt instrument (or your broker, if you purchased or held the debt instrument through a broker) should give you a copy of Form 1099-OID or a similar statement if the accrued OID for the calendar year is $10 or more and the term of the debt instrument is more than 1 year. 2013 federal tax forms 1040ez Form 1099-OID shows all OID income in box 1 except OID on a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Treasury obligation, which is shown in box 8. 2013 federal tax forms 1040ez It also shows, in box 2, any qualified stated interest you must include in income. 2013 federal tax forms 1040ez (However, any qualified stated interest on Treasury inflation-protected securities can be reported on Form 1099-INT in box 3. 2013 federal tax forms 1040ez ) A copy of Form 1099-OID will be sent to the IRS. 2013 federal tax forms 1040ez Do not attach your copy to your tax return. 2013 federal tax forms 1040ez Keep it for your records. 2013 federal tax forms 1040ez If you are required to file a tax return and you receive Form 1099-OID showing taxable amounts, you must report these amounts on your return. 2013 federal tax forms 1040ez A 20% accuracy-related penalty may be charged for underpayment of tax due to either negligence or disregard of rules and regulations or substantial understatement of tax. 2013 federal tax forms 1040ez Form 1099-OID not received. 2013 federal tax forms 1040ez   If you held an OID debt instrument for a calendar year but did not receive a Form 1099-OID, refer to the discussions under Figuring OID on Long-Term Debt Instruments, later, for information on the OID you must report. 2013 federal tax forms 1040ez Refiguring OID. 2013 federal tax forms 1040ez   You must refigure the OID shown on Form 1099-OID, in box 1 or box 8, to determine the proper amount to include in income if one of the following applies. 2013 federal tax forms 1040ez You bought the debt instrument at a premium or at an acquisition premium. 2013 federal tax forms 1040ez The debt instrument is a stripped bond or coupon (including zero coupon bonds backed by U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Treasury securities). 2013 federal tax forms 1040ez The debt instrument is a contingent payment or inflation-indexed debt instrument. 2013 federal tax forms 1040ez See the discussions under Figuring OID on Long-Term Debt Instruments or Figuring OID on Stripped Bonds and Coupons, later, for the specific computations. 2013 federal tax forms 1040ez Refiguring interest. 2013 federal tax forms 1040ez   If you disposed of a debt instrument or acquired it from another holder between interest dates, see the discussion under Bonds Sold Between Interest Dates in chapter 1 of Publication 550 for information about refiguring the interest shown on Form 1099-OID in box 2. 2013 federal tax forms 1040ez Nominee. 2013 federal tax forms 1040ez   If you are the holder of an OID debt instrument and you receive a Form 1099-OID that shows your taxpayer identification number and includes amounts belonging to another person, you are considered a “nominee. 2013 federal tax forms 1040ez ” You must file another Form 1099-OID for each actual owner, showing the OID for the owner. 2013 federal tax forms 1040ez Show the owner of the debt instrument as the “recipient” and you as the “payer. 2013 federal tax forms 1040ez ”   Complete Form 1099-OID and Form 1096 and file the forms with the Internal Revenue Service Center for your area. 2013 federal tax forms 1040ez You must also give a copy of the Form 1099-OID to the actual owner. 2013 federal tax forms 1040ez However, you are not required to file a nominee return to show amounts belonging to your spouse. 2013 federal tax forms 1040ez See the Form 1099 instructions for more information. 2013 federal tax forms 1040ez   When preparing your tax return, follow the instructions under Showing an OID adjustment in the next discussion. 2013 federal tax forms 1040ez How To Report OID Generally, you report your taxable interest and OID income on the interest line of Form 1040EZ, Form 1040A, or Form 1040. 2013 federal tax forms 1040ez Form 1040 or Form 1040A required. 2013 federal tax forms 1040ez   You must use Form 1040 or Form 1040A (you cannot use Form 1040EZ) under either of the following conditions. 2013 federal tax forms 1040ez You received a Form 1099-OID as a nominee for the actual owner. 2013 federal tax forms 1040ez Your total interest and OID income for the year was more than $1,500. 2013 federal tax forms 1040ez Form 1040 required. 2013 federal tax forms 1040ez   You must use Form 1040 (you cannot use Form 1040A or Form 1040EZ) if you are reporting more or less OID than the amount shown on Form 1099-OID, other than because you are a nominee. 2013 federal tax forms 1040ez For example, if you paid a premium or an acquisition premium when you purchased the debt instrument, you must use Form 1040 because you will report less OID than shown on Form 1099-OID. 2013 federal tax forms 1040ez Also, you must use Form 1040 if you were charged an early withdrawal penalty. 2013 federal tax forms 1040ez Where to report. 2013 federal tax forms 1040ez   List each payer's name (if a brokerage firm gave you a Form 1099, list the brokerage firm as the payer) and the amount received from each payer on Form 1040A, Schedule B, Part I, line 1, or Form 1040, Schedule B, line 1. 2013 federal tax forms 1040ez Include all OID and periodic interest shown on any Form 1099-OID, boxes 1, 2, and 8, you received for the tax year. 2013 federal tax forms 1040ez Also include any other OID and interest income for which you did not receive a Form 1099. 2013 federal tax forms 1040ez Showing an OID adjustment. 2013 federal tax forms 1040ez   If you use Form 1040 to report more or less OID than shown on Form 1099-OID, list the full OID on Schedule B, Part I, line 1, and follow the instructions under 1 or 2, next. 2013 federal tax forms 1040ez   If you use Form 1040A to report the OID shown on a Form 1099-OID you received as a nominee for the actual owner, list the full OID on Schedule B, Part I, line 1 and follow the instructions under 1. 2013 federal tax forms 1040ez If the OID, as adjusted, is less than the amount shown on Form 1099-OID, show the adjustment as follows. 2013 federal tax forms 1040ez Under your last entry on line 1, subtotal all interest and OID income listed on line 1. 2013 federal tax forms 1040ez Below the subtotal, write “Nominee Distribution” or “OID Adjustment” and show the OID you are not required to report. 2013 federal tax forms 1040ez Subtract that OID from the subtotal and enter the result on line 2. 2013 federal tax forms 1040ez If the OID, as adjusted, is more than the amount shown on Form 1099-OID, show the adjustment as follows. 2013 federal tax forms 1040ez Under your last entry on line 1, subtotal all interest and OID income listed on line 1. 2013 federal tax forms 1040ez Below the subtotal, write “OID Adjustment” and show the additional OID. 2013 federal tax forms 1040ez Add that OID to the subtotal and enter the result on line 2. 2013 federal tax forms 1040ez Figuring OID on Long-Term Debt Instruments How you figure the OID on a long-term debt instrument depends on the date it was issued. 2013 federal tax forms 1040ez It also may depend on the type of the debt instrument. 2013 federal tax forms 1040ez There are different rules for each of the following debt instruments. 2013 federal tax forms 1040ez Corporate debt instruments issued after 1954 and before May 28, 1969, and government debt instruments issued after 1954 and before July 2, 1982. 2013 federal tax forms 1040ez Corporate debt instruments issued after May 27, 1969, and before July 2, 1982. 2013 federal tax forms 1040ez Debt instruments issued after July 1, 1982, and before 1985. 2013 federal tax forms 1040ez Debt instruments issued after 1984 (other than debt instruments described in (5) and (6)). 2013 federal tax forms 1040ez Contingent payment debt instruments issued after August 12, 1996. 2013 federal tax forms 1040ez Inflation-indexed debt instruments (including Treasury inflation-protected securities) issued after January 5, 1997. 2013 federal tax forms 1040ez Zero coupon bonds. 2013 federal tax forms 1040ez   The rules for figuring OID on zero coupon bonds backed by U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Treasury securities are discussed under Figuring OID on Stripped Bonds and Coupons, later. 2013 federal tax forms 1040ez Corporate Debt Instruments Issued After 1954 and Before May 28, 1969, and Government Debt Instruments Issued After 1954 and Before July 2, 1982 If you hold these debt instruments as capital assets, you include OID in income only in the year the debt instrument is sold, exchanged, or redeemed, and only if you have a gain. 2013 federal tax forms 1040ez The OID, which is taxed as ordinary income, generally equals the following amount. 2013 federal tax forms 1040ez   number of full months you held the debt instrument  number of full months from date of original issue to date of maturity X original issue discount The balance of the gain is capital gain. 2013 federal tax forms 1040ez If there is a loss on the sale of the debt instrument, the entire loss is a capital loss and no OID is reported. 2013 federal tax forms 1040ez Corporate Debt Instruments Issued After May 27, 1969, and Before July 2, 1982 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments. 2013 federal tax forms 1040ez For information about showing the correct OID on your tax return, see the discussion under How To Report OID, earlier. 2013 federal tax forms 1040ez Your basis in the debt instrument is increased by the OID you include in income. 2013 federal tax forms 1040ez Form 1099-OID. 2013 federal tax forms 1040ez   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. 2013 federal tax forms 1040ez However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. 2013 federal tax forms 1040ez See Reduction for acquisition premium, later. 2013 federal tax forms 1040ez If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. 2013 federal tax forms 1040ez irs. 2013 federal tax forms 1040ez gov/pub1212 by clicking the link under Recent Developments. 2013 federal tax forms 1040ez Form 1099-OID not received. 2013 federal tax forms 1040ez    The OID listed is for each $1,000 of redemption price. 2013 federal tax forms 1040ez You must adjust the listed amount if your debt instrument has a different principal amount. 2013 federal tax forms 1040ez For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. 2013 federal tax forms 1040ez   If you held the debt instrument the entire year, use the OID shown in Section I-A for a calendar year. 2013 federal tax forms 1040ez (If your debt instrument is not listed in Section I-A, consult the issuer for information about the issue price and the OID that accrued for that year. 2013 federal tax forms 1040ez ) If you did not hold the debt instrument the entire year, figure your OID using the following method. 2013 federal tax forms 1040ez Divide the OID shown by 12. 2013 federal tax forms 1040ez Multiply the result in (1) by the number of complete and partial months (for example, 6½ months) you held the debt instrument during a calendar year. 2013 federal tax forms 1040ez This is the OID to include in income unless you paid an acquisition premium. 2013 federal tax forms 1040ez The reduction for acquisition premium is discussed next. 2013 federal tax forms 1040ez Reduction for acquisition premium. 2013 federal tax forms 1040ez   If you bought the debt instrument at an acquisition premium, figure the OID to include in income as follows. 2013 federal tax forms 1040ez Divide the total OID on the debt instrument by the number of complete months, and any part of a month, from the date of original issue to the maturity date. 2013 federal tax forms 1040ez This is the monthly OID. 2013 federal tax forms 1040ez Subtract from your cost the issue price and the accumulated OID from the date of issue to the date of purchase. 2013 federal tax forms 1040ez (If the result is zero or less, stop here. 2013 federal tax forms 1040ez You did not pay an acquisition premium. 2013 federal tax forms 1040ez ) Divide the amount figured in (2) by the number of complete months, and any part of a month, from the date of your purchase to the maturity date. 2013 federal tax forms 1040ez Subtract the amount figured in (3) from the amount figured in (1). 2013 federal tax forms 1040ez This is the OID to include in income for each month you hold the debt instrument during the year. 2013 federal tax forms 1040ez Transfers during the month. 2013 federal tax forms 1040ez   If you buy or sell a debt instrument on any day other than the same day of the month as the date of original issue, the ratable monthly portion of OID for the month of sale is divided between the seller and the buyer according to the number of days each held the debt instrument. 2013 federal tax forms 1040ez Your holding period for this purpose begins the day you acquire the debt instrument and ends the day before you dispose of it. 2013 federal tax forms 1040ez Debt Instruments Issued After July 1, 1982, and Before 1985 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments and increase your basis by the amount included. 2013 federal tax forms 1040ez For information about showing the correct OID on your tax return, see How To Report OID, earlier. 2013 federal tax forms 1040ez Form 1099-OID. 2013 federal tax forms 1040ez   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. 2013 federal tax forms 1040ez However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. 2013 federal tax forms 1040ez See Constant yield method and the discussions on acquisition premium that follow, later. 2013 federal tax forms 1040ez If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. 2013 federal tax forms 1040ez irs. 2013 federal tax forms 1040ez gov/pub1212 by clicking the link under Recent Developments. 2013 federal tax forms 1040ez Form 1099-OID not received. 2013 federal tax forms 1040ez    The OID listed is for each $1,000 of redemption price. 2013 federal tax forms 1040ez You must adjust the listed amount if your debt instrument has a different principal amount. 2013 federal tax forms 1040ez For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. 2013 federal tax forms 1040ez   If you held the debt instrument the entire year, use the OID shown in Section I-A. 2013 federal tax forms 1040ez (If your instrument is not listed in Section I-A, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. 2013 federal tax forms 1040ez ) If you did not hold the debt instrument the entire year, figure your OID using either of the following methods. 2013 federal tax forms 1040ez Method 1. 2013 federal tax forms 1040ez    Divide the total OID for a calendar year by 365 (366 for leap years). 2013 federal tax forms 1040ez Multiply the result in (1) by the number of days you held the debt instrument during that particular year. 2013 federal tax forms 1040ez  This computation is an approximation and may result in a slightly higher OID than Method 2. 2013 federal tax forms 1040ez Method 2. 2013 federal tax forms 1040ez    Look up the daily OID for the first accrual period you held the debt instrument during a calendar year. 2013 federal tax forms 1040ez (See Accrual period under Constant yield method, next. 2013 federal tax forms 1040ez ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. 2013 federal tax forms 1040ez If you held the debt instrument for part of both accrual periods, repeat (1) and (2) for the second accrual period. 2013 federal tax forms 1040ez Add the results of (2) and (3). 2013 federal tax forms 1040ez This is the OID to include in income, unless you paid an acquisition premium. 2013 federal tax forms 1040ez (The reduction for acquisition premium is discussed later. 2013 federal tax forms 1040ez ) Constant yield method. 2013 federal tax forms 1040ez   This discussion shows how to figure OID on debt instruments issued after July 1, 1982, and before 1985, using a constant yield method. 2013 federal tax forms 1040ez OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. 2013 federal tax forms 1040ez   Figure the OID allocable to any accrual period as follows. 2013 federal tax forms 1040ez Multiply the adjusted issue price at the beginning of the accrual period by the debt instrument's yield to maturity. 2013 federal tax forms 1040ez Subtract from the result in (1) any qualified stated interest allocable to the accrual period. 2013 federal tax forms 1040ez Accrual period. 2013 federal tax forms 1040ez   An accrual period for any OID debt instrument issued after July 1, 1982, and before 1985 is each 1-year period beginning on the date of the issue of the obligation and each anniversary thereafter, or the shorter period to maturity for the last accrual period. 2013 federal tax forms 1040ez Your tax year will usually include parts of two accrual periods. 2013 federal tax forms 1040ez Daily OID. 2013 federal tax forms 1040ez   The OID for any accrual period is allocated equally to each day in the accrual period. 2013 federal tax forms 1040ez You must include in income the sum of the OID amounts for each day you hold the debt instrument during the year. 2013 federal tax forms 1040ez If your tax year includes parts of two or more accrual periods, you must include the proper daily OID amounts for each accrual period. 2013 federal tax forms 1040ez Figuring daily OID. 2013 federal tax forms 1040ez   The daily OID for the initial accrual period is figured using the following formula. 2013 federal tax forms 1040ez   (ip × ytm) − qsi     p   ip = issue price ytm = yield to maturity qsi = qualified stated interest p = number of days in accrual period         The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. 2013 federal tax forms 1040ez Reduction for acquisition premium on debt instruments purchased before July 19, 1984. 2013 federal tax forms 1040ez   If you bought the debt instrument at an acquisition premium before July 19, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. 2013 federal tax forms 1040ez Figure the daily acquisition premium by dividing the total acquisition premium by the number of days in the period beginning on your purchase date and ending on the day before the date of maturity. 2013 federal tax forms 1040ez Reduction for acquisition premium on debt instruments purchased after July 18, 1984. 2013 federal tax forms 1040ez   If you bought the debt instrument at an acquisition premium after July 18, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. 2013 federal tax forms 1040ez However, the method of figuring the daily acquisition premium is different from the method described in the preceding discussion. 2013 federal tax forms 1040ez To figure the daily acquisition premium under this method, multiply the daily OID by the following fraction. 2013 federal tax forms 1040ez The numerator is the acquisition premium. 2013 federal tax forms 1040ez The denominator is the total OID remaining for the debt instrument after your purchase date. 2013 federal tax forms 1040ez Section I-A is available at www. 2013 federal tax forms 1040ez irs. 2013 federal tax forms 1040ez gov/pub1212 and clicking the link under Recent Developments. 2013 federal tax forms 1040ez Using Section I-A to figure accumulated OID. 2013 federal tax forms 1040ez   If you bought your corporate debt instrument in a calendar year or the subsequent year, you can figure the accumulated OID to the date of purchase by adding the following amounts. 2013 federal tax forms 1040ez The amount from the “Total OID to January 1, YYYY” column for your debt instrument. 2013 federal tax forms 1040ez The OID from January 1 of a calendar year to the date of purchase, figured as follows. 2013 federal tax forms 1040ez Multiply the daily OID for the first accrual period in the calendar year by the number of days from January 1 to the date of purchase, or the end of the accrual period if the debt instrument was purchased in the second or third accrual period. 2013 federal tax forms 1040ez Multiply the daily OID for each subsequent accrual period by the number of days in the period to the date of purchase or the end of the accrual period, whichever applies. 2013 federal tax forms 1040ez Add the amounts figured in (2a) and (2b). 2013 federal tax forms 1040ez Debt Instruments Issued After 1984 If you hold debt instruments issued after 1984, you must report part of the OID in gross income each year that you own the debt instruments. 2013 federal tax forms 1040ez You must include the OID in gross income whether or not you hold the debt instrument as a capital asset. 2013 federal tax forms 1040ez Your basis in the debt instrument is increased by the OID you include in income. 2013 federal tax forms 1040ez For information about showing the correct OID on your tax return, see How To Report OID, earlier. 2013 federal tax forms 1040ez Form 1099-OID. 2013 federal tax forms 1040ez   You should receive a Form 1099-OID showing OID for the part of a calendar year you held the debt instrument. 2013 federal tax forms 1040ez However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. 2013 federal tax forms 1040ez See Constant yield method and Reduction for acquisition premium, later. 2013 federal tax forms 1040ez   You may also need to refigure the OID for a contingent payment or inflation-indexed debt instrument on which the amount reported on Form 1099-OID is inaccurate. 2013 federal tax forms 1040ez See Contingent Payment Debt Instruments or Inflation-Indexed Debt Instruments, later. 2013 federal tax forms 1040ez If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-B available at www. 2013 federal tax forms 1040ez irs. 2013 federal tax forms 1040ez gov/pub1212 by clicking the link under Recent Developments. 2013 federal tax forms 1040ez Form 1099-OID not received. 2013 federal tax forms 1040ez   The OID listed is for each $1,000 of redemption price. 2013 federal tax forms 1040ez You must adjust the listed amount if your debt instrument has a different principal amount. 2013 federal tax forms 1040ez For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. 2013 federal tax forms 1040ez   Use the OID shown in Section I-B for a calendar year if you held the debt instrument the entire year. 2013 federal tax forms 1040ez (If your debt instrument is not listed in Section I-B, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. 2013 federal tax forms 1040ez ) If you did not hold the debt instrument the entire year, figure your OID as follows. 2013 federal tax forms 1040ez Look up the daily OID for the first accrual period in which you held the debt instrument during a calendar year. 2013 federal tax forms 1040ez (See Accrual period under Constant yield method, later. 2013 federal tax forms 1040ez ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. 2013 federal tax forms 1040ez Repeat (1) and (2) for any remaining accrual periods in which you held the debt instrument. 2013 federal tax forms 1040ez Add the results of (2) and (3). 2013 federal tax forms 1040ez This is the OID to include in income for that year, unless you paid an acquisition premium. 2013 federal tax forms 1040ez (The reduction for acquisition premium is discussed later. 2013 federal tax forms 1040ez ) Tax-exempt bond. 2013 federal tax forms 1040ez   If you own a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. 2013 federal tax forms 1040ez You need to make this adjustment to determine if you have a gain or loss on a later disposition of the bond. 2013 federal tax forms 1040ez In general, use the rules that follow to determine your OID. 2013 federal tax forms 1040ez Constant yield method. 2013 federal tax forms 1040ez   This discussion shows how to figure OID on debt instruments issued after 1984 using a constant yield method. 2013 federal tax forms 1040ez (The special rules that apply to contingent payment debt instruments and inflation-indexed debt instruments are explained later. 2013 federal tax forms 1040ez ) OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. 2013 federal tax forms 1040ez   Figure the OID allocable to any accrual period as follows. 2013 federal tax forms 1040ez Multiply the adjusted issue price at the beginning of the accrual period by a fraction. 2013 federal tax forms 1040ez The numerator of the fraction is the debt instrument's yield to maturity and the denominator is the number of accrual periods per year. 2013 federal tax forms 1040ez The yield must be stated appropriately taking into account the length of the particular accrual period. 2013 federal tax forms 1040ez Subtract from the result in (1) any qualified stated interest allocable to the accrual period. 2013 federal tax forms 1040ez Accrual period. 2013 federal tax forms 1040ez   For debt instruments issued after 1984 and before April 4, 1994, an accrual period is each 6-month period that ends on the day that corresponds to the stated maturity date of the debt instrument or the date 6 months before that date. 2013 federal tax forms 1040ez For example, a debt instrument maturing on March 31 has accrual periods that end on September 30 and March 31 of each calendar year. 2013 federal tax forms 1040ez Any short period is included as the first accrual period. 2013 federal tax forms 1040ez   For debt instruments issued after April 3, 1994, accrual periods may be of any length and may vary in length over the term of the debt instrument, as long as each accrual period is no longer than 1 year and all payments are made on the first or last day of an accrual period. 2013 federal tax forms 1040ez However, the OID listed for these debt instruments in Section I-B has been figured using 6-month accrual periods. 2013 federal tax forms 1040ez Daily OID. 2013 federal tax forms 1040ez   The OID for any accrual period is allocated equally to each day in the accrual period. 2013 federal tax forms 1040ez Figure the amount to include in income by adding the OID for each day you hold the debt instrument during the year. 2013 federal tax forms 1040ez Since your tax year will usually include parts of two or more accrual periods, you must include the proper daily OID for each accrual period. 2013 federal tax forms 1040ez If your debt instrument has 6-month accrual periods, your tax year will usually include one full 6-month accrual period and parts of two other 6-month periods. 2013 federal tax forms 1040ez Figuring daily OID. 2013 federal tax forms 1040ez   The daily OID for the initial accrual period is figured using the following formula. 2013 federal tax forms 1040ez   (ip × ytm/n) − qsi     p   ip = issue price ytm = yield to maturity n = number of accrual periods in 1 year qsi = qualified stated interest p = number of days in accrual period       The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. 2013 federal tax forms 1040ez Example 5. 2013 federal tax forms 1040ez On January 1 of Year 1, you bought a 15-year, 10% debt instrument of A Corporation at original issue for $86,235. 2013 federal tax forms 1040ez 17. 2013 federal tax forms 1040ez According to the prospectus, the debt instrument matures on December 31 of Year 15 at a stated redemption price of $100,000. 2013 federal tax forms 1040ez The yield to maturity is 12%, compounded semiannually. 2013 federal tax forms 1040ez The debt instrument provides for qualified stated interest payments of $5,000 on June 30 and December 31 of each calendar year. 2013 federal tax forms 1040ez The accrual periods are the 6-month periods ending on each of these dates. 2013 federal tax forms 1040ez The number of days for the first accrual period (January 1 through June 30) is 181 days (182 for leap years). 2013 federal tax forms 1040ez The daily OID for the first accrual period is figured as follows. 2013 federal tax forms 1040ez   ($86,235. 2013 federal tax forms 1040ez 17 x . 2013 federal tax forms 1040ez 12/2) – $5,000     181 days     = $174. 2013 federal tax forms 1040ez 11020 = $. 2013 federal tax forms 1040ez 96193   181           The adjusted issue price at the beginning of the second accrual period is the issue price plus the OID previously includible in income ($86,235. 2013 federal tax forms 1040ez 17 + $174. 2013 federal tax forms 1040ez 11), or $86,409. 2013 federal tax forms 1040ez 28. 2013 federal tax forms 1040ez The number of days for the second accrual period (July 1 through December 31) is 184 days. 2013 federal tax forms 1040ez The daily OID for the second accrual period is figured as follows. 2013 federal tax forms 1040ez   ($86,409. 2013 federal tax forms 1040ez 28 x . 2013 federal tax forms 1040ez 12/2) – $5,000     184 days     = $184. 2013 federal tax forms 1040ez 55681 = $1. 2013 federal tax forms 1040ez 00303   184 Since the first and second accrual periods coincide exactly with your tax year, you include in income for Year 1 the OID allocable to the first two accrual periods, $174. 2013 federal tax forms 1040ez 11 ($. 2013 federal tax forms 1040ez 95665 × 182 days) plus $184. 2013 federal tax forms 1040ez 56 ($1. 2013 federal tax forms 1040ez 00303 × 184 days), or $358. 2013 federal tax forms 1040ez 67. 2013 federal tax forms 1040ez Add the OID to the $10,000 interest you report on your income tax return for Year 1. 2013 federal tax forms 1040ez Example 6. 2013 federal tax forms 1040ez Assume the same facts as in Example 5, except that you bought the debt instrument at original issue on May 1 of Year 1, with a maturity date of April 30, Year 16. 2013 federal tax forms 1040ez Also, the interest payment dates are October 31 and April 30 of each calendar year. 2013 federal tax forms 1040ez The accrual periods are the 6-month periods ending on each of these dates. 2013 federal tax forms 1040ez The number of days for the first accrual period (May 1 through October 31) is 184 days. 2013 federal tax forms 1040ez The daily OID for the first accrual period is figured as follows. 2013 federal tax forms 1040ez   ($86,235. 2013 federal tax forms 1040ez 17 x . 2013 federal tax forms 1040ez 12/2) – $5,000     184 days     = $174. 2013 federal tax forms 1040ez 11020 = $. 2013 federal tax forms 1040ez 94625   184           The number of days for the second accrual period (November 1 through April 30) is 181 days (182 for leap years). 2013 federal tax forms 1040ez The daily OID for the second accrual period is figured as follows. 2013 federal tax forms 1040ez   ($86,409. 2013 federal tax forms 1040ez 28 x . 2013 federal tax forms 1040ez 12/2) – $5,000     181 days     = $184. 2013 federal tax forms 1040ez 55681 = $1. 2013 federal tax forms 1040ez 01965   181 If you hold the debt instrument through the end of Year 1, you must include $236. 2013 federal tax forms 1040ez 31 of OID in income. 2013 federal tax forms 1040ez This is $174. 2013 federal tax forms 1040ez 11 ($. 2013 federal tax forms 1040ez 94625 × 184 days) for the period May 1 through October 31 plus $62. 2013 federal tax forms 1040ez 20 ($1. 2013 federal tax forms 1040ez 01965 × 61 days) for the period November 1 through December 31. 2013 federal tax forms 1040ez The OID is added to the $5,000 interest income paid on October 31 of Year 1. 2013 federal tax forms 1040ez Your basis in the debt instrument is increased by the OID you include in income. 2013 federal tax forms 1040ez On January 1 of Year 2, your basis in the A Corporation debt instrument is $86,471. 2013 federal tax forms 1040ez 48 ($86,235. 2013 federal tax forms 1040ez 17 + $236. 2013 federal tax forms 1040ez 31). 2013 federal tax forms 1040ez Short first accrual period. 2013 federal tax forms 1040ez   You may have to make adjustments if a debt instrument has a short first accrual period. 2013 federal tax forms 1040ez For example, a debt instrument with 6-month accrual periods that is issued on February 15 and matures on October 31 has a short first accrual period that ends April 30. 2013 federal tax forms 1040ez (The remaining accrual periods begin on May 1 and November 1. 2013 federal tax forms 1040ez ) For this short period, figure the daily OID as described earlier, but adjust the yield for the length of the short accrual period. 2013 federal tax forms 1040ez You may use any reasonable compounding method in determining OID for a short period. 2013 federal tax forms 1040ez Examples of reasonable compounding methods include continuous compounding and monthly compounding (that is, simple interest within a month). 2013 federal tax forms 1040ez Consult your tax advisor for more information about making this computation. 2013 federal tax forms 1040ez   The OID for the final accrual period is the difference between the amount payable at maturity (other than a payment of qualified stated interest) and the adjusted issue price at the beginning of the final accrual period. 2013 federal tax forms 1040ez Reduction for acquisition premium. 2013 federal tax forms 1040ez   If you bought the debt instrument at an acquisition premium, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. 2013 federal tax forms 1040ez To figure the daily acquisition premium, multiply the daily OID by the following fraction. 2013 federal tax forms 1040ez The numerator is the acquisition premium. 2013 federal tax forms 1040ez The denominator is the total OID remaining for the debt instrument after your purchase date. 2013 federal tax forms 1040ez Example 7. 2013 federal tax forms 1040ez Assume the same facts as in Example 6, except that you bought the debt instrument on November 1 of Year 1 for $87,000, after its original issue on May 1 of Year 1. 2013 federal tax forms 1040ez The adjusted issue price on November 1 of Year 1 is $86,409. 2013 federal tax forms 1040ez 28 ($86,235. 2013 federal tax forms 1040ez 17 + $174. 2013 federal tax forms 1040ez 11). 2013 federal tax forms 1040ez In this case, you paid an acquisition premium of $590. 2013 federal tax forms 1040ez 72 ($87,000 − $86,409. 2013 federal tax forms 1040ez 28). 2013 federal tax forms 1040ez The daily OID for the accrual period November 1 through April 30, reduced for the acquisition premium, is figured as follows. 2013 federal tax forms 1040ez 1) Daily OID on date of purchase (2nd accrual period) $1. 2013 federal tax forms 1040ez 01965*  2)  Acquisition premium $590. 2013 federal tax forms 1040ez 72    3)  Total OID remaining after purchase date ($13,764. 2013 federal tax forms 1040ez 83 − $174. 2013 federal tax forms 1040ez 11) 13,590. 2013 federal tax forms 1040ez 72   4) Line 2 ÷ line 3 . 2013 federal tax forms 1040ez 04346  5)  Line 1 × line 4 . 2013 federal tax forms 1040ez 04432  6)  Daily OID reduced for the acquisition premium. 2013 federal tax forms 1040ez Line 1 − line 5 $0. 2013 federal tax forms 1040ez 97533  * As shown in Example 6. 2013 federal tax forms 1040ez The total OID to include in income for Year 1 is $59. 2013 federal tax forms 1040ez 50 ($. 2013 federal tax forms 1040ez 97533 × 61 days). 2013 federal tax forms 1040ez Contingent Payment Debt Instruments This discussion shows how to figure OID on a contingent payment debt instrument issued after August 12, 1996, that was issued for cash or publicly traded property. 2013 federal tax forms 1040ez In general, a contingent payment debt instrument provides for one or more payments that are contingent as to timing or amount. 2013 federal tax forms 1040ez If you hold a contingent payment bond, you must report OID as it accrues each year. 2013 federal tax forms 1040ez Because the actual payments on a contingent payment debt instrument cannot be known in advance, issuers and holders cannot use the constant yield method (discussed earlier under Debt Instruments Issued After 1984) without making certain assumptions about the payments on the debt instrument. 2013 federal tax forms 1040ez To figure OID accruals on contingent payment debt instruments, holders and issuers must use the noncontingent bond method. 2013 federal tax forms 1040ez Noncontingent bond method. 2013 federal tax forms 1040ez    Under this method, the issuer must compute a comparable yield for the debt instrument and, based on this yield, construct a projected payment schedule for the instrument, which includes a projected fixed amount for each contingent payment. 2013 federal tax forms 1040ez In general, holders and issuers accrue OID on this projected payment schedule using the constant yield method that applies to fixed payment debt instruments. 2013 federal tax forms 1040ez When a contingent payment differs from the projected fixed amount, the holders and issuers make adjustments to their OID accruals. 2013 federal tax forms 1040ez If the actual contingent payment is larger than expected, both the issuer and the holder increase their OID accruals. 2013 federal tax forms 1040ez If the actual contingent payment is smaller than expected, holders and issuers generally decrease their OID accruals. 2013 federal tax forms 1040ez Form 1099-OID. 2013 federal tax forms 1040ez   The amount shown on Form 1099-OID in box 1 you receive for a contingent payment debt instrument may not be the correct amount to include in income. 2013 federal tax forms 1040ez For example, the amount may not be correct if the contingent payment was different from the projected amount. 2013 federal tax forms 1040ez If the amount in box 1 is not correct, you must figure the OID to report on your return under the following rules. 2013 federal tax forms 1040ez For information on showing an OID adjustment on your tax return, see How To Report OID, earlier. 2013 federal tax forms 1040ez Figuring OID. 2013 federal tax forms 1040ez   To figure OID on a contingent payment debt instrument, you need to know the “comparable yield” and “projected payment schedule” of the debt instrument. 2013 federal tax forms 1040ez The issuer must make these available to you. 2013 federal tax forms 1040ez Comparable yield. 2013 federal tax forms 1040ez   The comparable yield generally is the yield at which the issuer would issue a fixed rate debt instrument with terms and conditions similar to those of the contingent payment debt instrument. 2013 federal tax forms 1040ez The comparable yield is determined as of the debt instrument's issue date. 2013 federal tax forms 1040ez Projected payment schedule. 2013 federal tax forms 1040ez   The projected payment schedule for a contingent payment debt instrument includes all fixed payments due under the instrument and a projected fixed amount for each contingent payment. 2013 federal tax forms 1040ez The projected payment schedule is created by the issuer as of the debt instrument's issue date. 2013 federal tax forms 1040ez It is used to determine the issuer's and holder's interest accruals and adjustments. 2013 federal tax forms 1040ez Steps for figuring OID. 2013 federal tax forms 1040ez   Figure the OID on a contingent payment debt instrument in two steps. 2013 federal tax forms 1040ez Figure the OID using the constant yield method (discussed earlier under Debt Instruments Issued After 1984 ) that applies to fixed payment debt instruments. 2013 federal tax forms 1040ez Use the comparable yield as the yield to maturity. 2013 federal tax forms 1040ez In general, use the projected payment schedule to determine the instrument's adjusted issue price at the beginning of each accrual period (other than the initial period). 2013 federal tax forms 1040ez Do not treat any amount payable as qualified stated interest. 2013 federal tax forms 1040ez Adjust the OID in (1) to account for actual contingent payments. 2013 federal tax forms 1040ez If the contingent payment is greater than the projected fixed amount, you have a positive adjustment. 2013 federal tax forms 1040ez If the contingent payment is less than the projected fixed amount, you have a negative adjustment. 2013 federal tax forms 1040ez Net positive adjustment. 2013 federal tax forms 1040ez   A net positive adjustment exists for a tax year when the total of any positive adjustments described in (2) above for the tax year is more than the total of any negative adjustments for the tax year. 2013 federal tax forms 1040ez Treat a net positive adjustment as additional OID for the tax year. 2013 federal tax forms 1040ez Net negative adjustment. 2013 federal tax forms 1040ez   A net negative adjustment exists for a tax year when the total of any negative adjustments described in (2) above for the tax year is more than the total of any positive adjustments for the tax year. 2013 federal tax forms 1040ez Use a net negative adjustment to offset OID on the debt instrument for the tax year. 2013 federal tax forms 1040ez If the net negative adjustment is more than the OID on the debt instrument for the tax year, you can claim the difference as an ordinary loss. 2013 federal tax forms 1040ez However, the amount you can claim as an ordinary loss is limited to the OID on the debt instrument you included in income in prior tax years. 2013 federal tax forms 1040ez You must carry forward any net negative adjustment that is more than the total OID for the tax year and prior tax years and treat it as a negative adjustment in the next tax year. 2013 federal tax forms 1040ez Basis adjustments. 2013 federal tax forms 1040ez   In general, increase your basis in a contingent payment debt instrument by the OID included in income. 2013 federal tax forms 1040ez Your basis, however, is not affected by any negative or positive adjustments. 2013 federal tax forms 1040ez Decrease your basis by any noncontingent payment received and the projected contingent payment scheduled to be received. 2013 federal tax forms 1040ez Treatment of gain or loss on sale or exchange. 2013 federal tax forms 1040ez   If you sell a contingent payment debt instrument at a gain, your gain is ordinary income (interest income), even if you hold the debt instrument as a capital asset. 2013 federal tax forms 1040ez If you sell a contingent payment debt instrument at a loss, your loss is an ordinary loss to the extent of your prior OID accruals on the debt instrument. 2013 federal tax forms 1040ez If the debt instrument is a capital asset, treat any loss that is more than your prior OID accruals as a capital loss. 2013 federal tax forms 1040ez See Regulations section 1. 2013 federal tax forms 1040ez 1275-4 for exceptions to these rules. 2013 federal tax forms 1040ez Premium, acquisition premium, and market discount. 2013 federal tax forms 1040ez   The rules for accruing premium, acquisition premium, and market discount do not apply to a contingent payment debt instrument. 2013 federal tax forms 1040ez See Regulations section 1. 2013 federal tax forms 1040ez 1275-4 to determine how to account for these items. 2013 federal tax forms 1040ez Inflation-Indexed Debt Instruments This discussion shows how you figure OID on certain inflation-indexed debt instruments issued after January 5, 1997. 2013 federal tax forms 1040ez An inflation-indexed debt instrument is generally a debt instrument on which the payments are adjusted for inflation and d
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Letter 2271C Frequently Asked Questions (FAQs)

What is the letter telling me?

This letter confirms your financial request for an Installment Agreement has been approved.  It explains the fees we charge for establishing your agreement.  It also explains what to do if you qualify for a Low Income Fee Reduction.  This letter can also request missing information need based on the financial you previously provided.

What do I have to do?

The letter tells you what your payment due date is. You should mail your payment to us 10 days prior to the due date.  It tells you what items you need to put on your check so it can be correctly identified and applied to your account. If the letter is requesting more information, please provid the requested information.

How much time do I have?

The letter tells you the date when you first payment is due or the date you should return the requested information.

What happens if I don't take any action?

If installment payments are not received as agreed or requested documentation is not received, we can proceed with enforcement action and may file a levy on your wages or bank account or file a lien on your personal property.

Who should I contact?

If you have any questions about this letter, call us at the number printed in the letter. The person who answers the phone will assist you.

What if I don't agree or have already taken corrective action?

If you do not agree with this letter, call us immediately at the number included. We will do our best to help you.  If you have called us about this matter before, but we did not correct the problem, you may want to contact the Office of the Taxpayer Advocate.

Page Last Reviewed or Updated: 30-Jan-2014

The 2013 Federal Tax Forms 1040ez

2013 federal tax forms 1040ez 36. 2013 federal tax forms 1040ez   Earned Income Credit (EIC) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Do You Qualify for the Credit?If Improper Claim Made in Prior Year Part A. 2013 federal tax forms 1040ez Rules for EveryoneRule 1. 2013 federal tax forms 1040ez Your AGI Must Be Less Than: Rule 2. 2013 federal tax forms 1040ez You Must Have a Valid Social Security Number (SSN) Rule 3. 2013 federal tax forms 1040ez Your Filing Status Cannot Be Married Filing Separately Rule 4. 2013 federal tax forms 1040ez You Must Be a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Citizen or Resident Alien All Year Rule 5. 2013 federal tax forms 1040ez You Cannot File Form 2555 or Form 2555-EZ Rule 6. 2013 federal tax forms 1040ez Your Investment Income Must Be $3,300 or Less Rule 7. 2013 federal tax forms 1040ez You Must Have Earned Income Part B. 2013 federal tax forms 1040ez Rules If You Have a Qualifying ChildRule 8. 2013 federal tax forms 1040ez Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9. 2013 federal tax forms 1040ez Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Rule 10. 2013 federal tax forms 1040ez You Cannot Be a Qualifying Child of Another Taxpayer Part C. 2013 federal tax forms 1040ez Rules If You Do Not Have a Qualifying ChildRule 11. 2013 federal tax forms 1040ez You Must Be at Least Age 25 but Under Age 65 Rule 12. 2013 federal tax forms 1040ez You Cannot Be the Dependent of Another Person Rule 13. 2013 federal tax forms 1040ez You Cannot Be a Qualifying Child of Another Taxpayer Rule 14. 2013 federal tax forms 1040ez You Must Have Lived in the United States More Than Half of the Year Part D. 2013 federal tax forms 1040ez Figuring and Claiming the EICRule 15. 2013 federal tax forms 1040ez Your Earned Income Must Be Less Than: IRS Will Figure the EIC for You How To Figure the EIC Yourself ExamplesExample 1. 2013 federal tax forms 1040ez John and Janet Smith (Form 1040A) Example 2. 2013 federal tax forms 1040ez Kelly Green (Form 1040EZ) What's New Earned income amount is more. 2013 federal tax forms 1040ez  The maximum amount of income you can earn and still get the credit has increased. 2013 federal tax forms 1040ez You may be able to take the credit if: You have three or more qualifying children and you earned less than $46,227 ($51,567 if married filing jointly), You have two qualifying children and you earned less than $43,038 ($48,378 if married filing jointly), You have one qualifying child and you earned less than $37,870 ($43,210 if married filing jointly), or You do not have a qualifying child and you earned less than $14,340 ($19,680 if married filing jointly). 2013 federal tax forms 1040ez Your adjusted gross income also must be less than the amount in the above list that applies to you. 2013 federal tax forms 1040ez For details, see Rules 1 and 15. 2013 federal tax forms 1040ez Investment income amount is more. 2013 federal tax forms 1040ez  The maximum amount of investment income you can have and still get the credit has increased to $3,300. 2013 federal tax forms 1040ez See Rule 6. 2013 federal tax forms 1040ez Reminders Increased EIC on certain joint returns. 2013 federal tax forms 1040ez  A married person filing a joint return may get more EIC than someone with the same income but a different filing status. 2013 federal tax forms 1040ez As a result, the EIC table has different columns for married persons filing jointly than for everyone else. 2013 federal tax forms 1040ez When you look up your EIC in the EIC Table, be sure to use the correct column for your filing status and the number of children you have. 2013 federal tax forms 1040ez Online help. 2013 federal tax forms 1040ez  You can use the EITC Assistant at www. 2013 federal tax forms 1040ez irs. 2013 federal tax forms 1040ez gov/eitc to find out if you are eligible for the credit. 2013 federal tax forms 1040ez The EITC Assistant is available in English and Spanish. 2013 federal tax forms 1040ez EIC questioned by IRS. 2013 federal tax forms 1040ez  The IRS may ask you to provide documents to prove you are entitled to claim the EIC. 2013 federal tax forms 1040ez We will tell you what documents to send us. 2013 federal tax forms 1040ez These may include: birth certificates, school records, medical records, etc. 2013 federal tax forms 1040ez The process of establishing your eligibility will delay your refund. 2013 federal tax forms 1040ez Introduction The earned income credit (EIC) is a tax credit for certain people who work and have less than $51,567 of earned income. 2013 federal tax forms 1040ez A tax credit usually means more money in your pocket. 2013 federal tax forms 1040ez It reduces the amount of tax you owe. 2013 federal tax forms 1040ez The EIC may also give you a refund. 2013 federal tax forms 1040ez How do you get the earned income credit?   To claim the EIC, you must: Qualify by meeting certain rules, and File a tax return, even if you: Do not owe any tax, Did not earn enough money to file a return, or Did not have income taxes withheld from your pay. 2013 federal tax forms 1040ez When you complete your return, you can figure your EIC by using a worksheet in the instructions for Form 1040, Form 1040A, or Form 1040EZ. 2013 federal tax forms 1040ez Or, if you prefer, you can let the IRS figure the credit for you. 2013 federal tax forms 1040ez How will this chapter help you?   This chapter will explain the following. 2013 federal tax forms 1040ez The rules you must meet to qualify for the EIC. 2013 federal tax forms 1040ez How to figure the EIC. 2013 federal tax forms 1040ez Useful Items - You may want to see: Publication 596 Earned Income Credit (EIC) Form (and Instructions) Schedule EIC Earned Income Credit (Qualifying Child Information) 8862 Information To Claim Earned Income Credit After Disallowance Do You Qualify for the Credit? To qualify to claim the EIC, you must first meet all of the rules explained in Part A, Rules for Everyone . 2013 federal tax forms 1040ez Then you must meet the rules in Part B, Rules If You Have a Qualifying Child , or Part C, Rules If You Do Not Have a Qualifying Child . 2013 federal tax forms 1040ez There is one final rule you must meet in Part D, Figuring and Claiming the EIC . 2013 federal tax forms 1040ez You qualify for the credit if you meet all the rules in each part that applies to you. 2013 federal tax forms 1040ez If you have a qualifying child, the rules in Parts A, B, and D apply to you. 2013 federal tax forms 1040ez If you do not have a qualifying child, the rules in Parts A, C, and D apply to you. 2013 federal tax forms 1040ez Table 36-1, Earned Income Credit in a Nutshell. 2013 federal tax forms 1040ez   Use Table 36–1 as a guide to Parts A, B, C, and D. 2013 federal tax forms 1040ez The table is a summary of all the rules in each part. 2013 federal tax forms 1040ez Do you have a qualifying child?   You have a qualifying child only if you have a child who meets the four tests described in Rule 8 and illustrated in Figure 36–1. 2013 federal tax forms 1040ez If Improper Claim Made in Prior Year If your EIC for any year after 1996 was denied or reduced for any reason other than a math or clerical error, you must attach a completed Form 8862 to your next tax return to claim the EIC. 2013 federal tax forms 1040ez You must also qualify to claim the EIC by meeting all the rules described in this chapter. 2013 federal tax forms 1040ez However, if your EIC was denied or reduced as a result of a math or clerical error, do not attach Form 8862 to your next tax return. 2013 federal tax forms 1040ez For example, if your arithmetic is incorrect, the IRS can correct it. 2013 federal tax forms 1040ez If you do not provide a correct social security number, the IRS can deny the EIC. 2013 federal tax forms 1040ez These kinds of errors are called math or clerical errors. 2013 federal tax forms 1040ez If your EIC for any year after 1996 was denied and it was determined that your error was due to reckless or intentional disregard of the EIC rules, then you cannot claim the EIC for the next 2 years. 2013 federal tax forms 1040ez If your error was due to fraud, then you cannot claim the EIC for the next 10 years. 2013 federal tax forms 1040ez More information. 2013 federal tax forms 1040ez   See chapter 5 in Publication 596 for more detailed information about the disallowance period and Form 8862. 2013 federal tax forms 1040ez Part A. 2013 federal tax forms 1040ez Rules for Everyone This part of the chapter discusses Rules 1 through 7. 2013 federal tax forms 1040ez You must meet all seven rules to qualify for the earned income credit. 2013 federal tax forms 1040ez If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the chapter. 2013 federal tax forms 1040ez If you meet all seven rules in this part, then read either Part B or Part C (whichever applies) for more rules you must meet. 2013 federal tax forms 1040ez Rule 1. 2013 federal tax forms 1040ez Your AGI Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. 2013 federal tax forms 1040ez Adjusted gross income (AGI). 2013 federal tax forms 1040ez   AGI is the amount on line 38 (Form 1040), line 22 (Form 1040A), or line 4 (Form 1040EZ). 2013 federal tax forms 1040ez If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. 2013 federal tax forms 1040ez Example. 2013 federal tax forms 1040ez Your AGI is $38,550, you are single, and you have one qualifying child. 2013 federal tax forms 1040ez You cannot claim the EIC because your AGI is not less than $37,870. 2013 federal tax forms 1040ez However, if your filing status was married filing jointly, you might be able to claim the EIC because your AGI is less than $43,210. 2013 federal tax forms 1040ez Community property. 2013 federal tax forms 1040ez   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your AGI includes that portion of both your and your spouse's wages that you are required to include in gross income. 2013 federal tax forms 1040ez This is different from the community property rules that apply under Rule 7 . 2013 federal tax forms 1040ez Rule 2. 2013 federal tax forms 1040ez You Must Have a Valid Social Security Number (SSN) To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). 2013 federal tax forms 1040ez Any qualifying child listed on Schedule EIC also must have a valid SSN. 2013 federal tax forms 1040ez (See Rule 8 if you have a qualifying child. 2013 federal tax forms 1040ez ) If your social security card (or your spouse's, if filing a joint return) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. 2013 federal tax forms 1040ez An example of a federally funded benefit is Medicaid. 2013 federal tax forms 1040ez If you have a card with the legend “Not valid for employment” and your immigration status has changed so that you are now a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez citizen or permanent resident, ask the SSA for a new social security card without the legend. 2013 federal tax forms 1040ez U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez citizen. 2013 federal tax forms 1040ez   If you were a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez citizen when you received your SSN, you have a valid SSN. 2013 federal tax forms 1040ez Valid for work only with INS or DHS authorization. 2013 federal tax forms 1040ez   If your social security card reads “Valid for work only with INS authorization” or “Valid for work only with DHS authorization,” you have a valid SSN, but only if that authorization is still valid. 2013 federal tax forms 1040ez SSN missing or incorrect. 2013 federal tax forms 1040ez   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. 2013 federal tax forms 1040ez Other taxpayer identification number. 2013 federal tax forms 1040ez   You cannot get the EIC if, instead of an SSN, you (or your spouse, if filing a joint return) have an individual taxpayer identification number (ITIN). 2013 federal tax forms 1040ez ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. 2013 federal tax forms 1040ez No SSN. 2013 federal tax forms 1040ez   If you do not have a valid SSN, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). 2013 federal tax forms 1040ez You cannot claim the EIC. 2013 federal tax forms 1040ez Getting an SSN. 2013 federal tax forms 1040ez   If you (or your spouse, if filing a joint return) do not have an SSN, you can apply for one by filing Form SS-5, Application for a Social Security Card, with the SSA. 2013 federal tax forms 1040ez You can get Form SS-5 online at www. 2013 federal tax forms 1040ez socialsecurity. 2013 federal tax forms 1040ez gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. 2013 federal tax forms 1040ez Filing deadline approaching and still no SSN. 2013 federal tax forms 1040ez   If the filing deadline is approaching and you still do not have an SSN, you have two choices. 2013 federal tax forms 1040ez Request an automatic 6-month extension of time to file your return. 2013 federal tax forms 1040ez You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Individual Income Tax Return. 2013 federal tax forms 1040ez For more information, see chapter 1 . 2013 federal tax forms 1040ez File the return on time without claiming the EIC. 2013 federal tax forms 1040ez After receiving the SSN, file an amended return (Form 1040X, Amended U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Individual Income Tax Return) claiming the EIC. 2013 federal tax forms 1040ez Attach a filled-in Schedule EIC if you have a qualifying child. 2013 federal tax forms 1040ez Table 36-1. 2013 federal tax forms 1040ez Earned Income Credit in a Nutshell First, you must meet all the rules in this column. 2013 federal tax forms 1040ez Second, you must meet all the rules in one of these columns, whichever applies. 2013 federal tax forms 1040ez Third, you must meet the rule in this column. 2013 federal tax forms 1040ez Part A. 2013 federal tax forms 1040ez  Rules for Everyone Part B. 2013 federal tax forms 1040ez  Rules If You Have a Qualifying Child Part C. 2013 federal tax forms 1040ez  Rules If You Do Not Have a Qualifying Child Part D. 2013 federal tax forms 1040ez  Figuring and Claiming the EIC 1. 2013 federal tax forms 1040ez Your adjusted gross income (AGI) must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. 2013 federal tax forms 1040ez 2. 2013 federal tax forms 1040ez You must have a valid social security number. 2013 federal tax forms 1040ez  3. 2013 federal tax forms 1040ez Your filing status cannot be “Married filing separately. 2013 federal tax forms 1040ez ” 4. 2013 federal tax forms 1040ez You must be a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez citizen or resident alien all year. 2013 federal tax forms 1040ez  5. 2013 federal tax forms 1040ez You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income). 2013 federal tax forms 1040ez  6. 2013 federal tax forms 1040ez Your investment income must be $3,300 or less. 2013 federal tax forms 1040ez  7. 2013 federal tax forms 1040ez You must have earned income. 2013 federal tax forms 1040ez 8. 2013 federal tax forms 1040ez Your child must meet the relationship, age, residency, and joint return tests. 2013 federal tax forms 1040ez  9. 2013 federal tax forms 1040ez Your qualifying child cannot be used by more than one person to claim the EIC. 2013 federal tax forms 1040ez  10. 2013 federal tax forms 1040ez You cannot be a qualifying child of another person. 2013 federal tax forms 1040ez 11. 2013 federal tax forms 1040ez You must be at least age 25 but under age 65. 2013 federal tax forms 1040ez  12. 2013 federal tax forms 1040ez You cannot be the dependent of another person. 2013 federal tax forms 1040ez  13. 2013 federal tax forms 1040ez You cannot be a qualifying child of another person. 2013 federal tax forms 1040ez  14. 2013 federal tax forms 1040ez You must have lived in the United States more than half of the year. 2013 federal tax forms 1040ez 15. 2013 federal tax forms 1040ez Your earned income must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. 2013 federal tax forms 1040ez Rule 3. 2013 federal tax forms 1040ez Your Filing Status Cannot Be Married Filing Separately If you are married, you usually must file a joint return to claim the EIC. 2013 federal tax forms 1040ez Your filing status cannot be “Married filing separately. 2013 federal tax forms 1040ez ” Spouse did not live with you. 2013 federal tax forms 1040ez   If you are married and your spouse did not live in your home at any time during the last 6 months of the year, you may be able to file as head of household, instead of married filing separately. 2013 federal tax forms 1040ez In that case, you may be able to claim the EIC. 2013 federal tax forms 1040ez For detailed information about filing as head of household, see chapter 2 . 2013 federal tax forms 1040ez Rule 4. 2013 federal tax forms 1040ez You Must Be a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Citizen or Resident Alien All Year If you (or your spouse, if married) were a nonresident alien for any part of the year, you cannot claim the earned income credit unless your filing status is married filing jointly. 2013 federal tax forms 1040ez You can use that filing status only if one spouse is a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez citizen or resident alien and you choose to treat the nonresident spouse as a U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez resident. 2013 federal tax forms 1040ez If you make this choice, you and your spouse are taxed on your worldwide income. 2013 federal tax forms 1040ez If you (or your spouse, if married) were a nonresident alien for any part of the year and your filing status is not married filing jointly, enter “No” on the dotted line next to line 64a (Form 1040) or in the space to the left of line 38a (Form 1040A). 2013 federal tax forms 1040ez If you need more information on making this choice, get Publication 519, U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Tax Guide for Aliens. 2013 federal tax forms 1040ez Rule 5. 2013 federal tax forms 1040ez You Cannot File Form 2555 or Form 2555-EZ You cannot claim the earned income credit if you file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. 2013 federal tax forms 1040ez You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. 2013 federal tax forms 1040ez U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez possessions are not foreign countries. 2013 federal tax forms 1040ez See Publication 54, Tax Guide for U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez Citizens and Resident Aliens Abroad, for more detailed information. 2013 federal tax forms 1040ez Rule 6. 2013 federal tax forms 1040ez Your Investment Income Must Be $3,300 or Less You cannot claim the earned income credit unless your investment income is $3,300 or less. 2013 federal tax forms 1040ez If your investment income is more than $3,300, you cannot claim the credit. 2013 federal tax forms 1040ez For most people, investment income is the total of the following amounts. 2013 federal tax forms 1040ez Taxable interest (line 8a of Form 1040 or 1040A). 2013 federal tax forms 1040ez Tax-exempt interest (line 8b of Form 1040 or 1040A). 2013 federal tax forms 1040ez Dividend income (line 9a of Form 1040 or 1040A). 2013 federal tax forms 1040ez Capital gain net income (line 13 of Form 1040, if more than zero, or line 10 of Form 1040A). 2013 federal tax forms 1040ez If you file Form 1040EZ, your investment income is the total of the amount of line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. 2013 federal tax forms 1040ez However, see Rule 6 in chapter 1 of Publication 596 if: You are filing Schedule E (Form 1040), Form 4797, or Form 8814, or You are reporting income from the rental of personal property on Form 1040, line 21. 2013 federal tax forms 1040ez Rule 7. 2013 federal tax forms 1040ez You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. 2013 federal tax forms 1040ez If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. 2013 federal tax forms 1040ez If you are an employee, earned income includes all the taxable income you get from your employer. 2013 federal tax forms 1040ez If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the instructions for Form 1040. 2013 federal tax forms 1040ez Earned Income Earned income includes all of the following types of income. 2013 federal tax forms 1040ez Wages, salaries, tips, and other taxable employee pay. 2013 federal tax forms 1040ez Employee pay is earned income only if it is taxable. 2013 federal tax forms 1040ez Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. 2013 federal tax forms 1040ez But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained below. 2013 federal tax forms 1040ez Net earnings from self-employment. 2013 federal tax forms 1040ez Gross income received as a statutory employee. 2013 federal tax forms 1040ez Wages, salaries, and tips. 2013 federal tax forms 1040ez   Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. 2013 federal tax forms 1040ez You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). 2013 federal tax forms 1040ez Nontaxable combat pay election. 2013 federal tax forms 1040ez   You can elect to include your nontaxable combat pay in earned income for the earned income credit. 2013 federal tax forms 1040ez Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. 2013 federal tax forms 1040ez Figure the credit with and without your nontaxable combat pay before making the election. 2013 federal tax forms 1040ez   If you make the election, you must include in earned income all nontaxable combat pay you received. 2013 federal tax forms 1040ez If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. 2013 federal tax forms 1040ez In other words, if one of you makes the election, the other one can also make it but does not have to. 2013 federal tax forms 1040ez   The amount of your nontaxable combat pay should be shown in box 12 of your Form W-2 with code “Q. 2013 federal tax forms 1040ez ” Self-employed persons and statutory employees. 2013 federal tax forms 1040ez   If you are self-employed or received income as a statutory employee, you must use the Form 1040 instructions to see if you qualify to get the EIC. 2013 federal tax forms 1040ez Approved Form 4361 or Form 4029 This section is for persons who have an approved: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, or Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. 2013 federal tax forms 1040ez Each approved form exempts certain income from social security taxes. 2013 federal tax forms 1040ez Each form is discussed here in terms of what is or is not earned income for the EIC. 2013 federal tax forms 1040ez Form 4361. 2013 federal tax forms 1040ez   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. 2013 federal tax forms 1040ez This includes wages, salaries, tips, and other taxable employee compensation. 2013 federal tax forms 1040ez A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. 2013 federal tax forms 1040ez Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. 2013 federal tax forms 1040ez Examples include fees for performing marriages and honoraria for delivering speeches. 2013 federal tax forms 1040ez Form 4029. 2013 federal tax forms 1040ez   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. 2013 federal tax forms 1040ez However, amounts you received as a self-employed individual do not count as earned income. 2013 federal tax forms 1040ez Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. 2013 federal tax forms 1040ez Disability Benefits If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. 2013 federal tax forms 1040ez Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. 2013 federal tax forms 1040ez You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. 2013 federal tax forms 1040ez Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. 2013 federal tax forms 1040ez Report taxable pension payments on Form 1040, lines 16a and 16b (or Form 1040A, lines 12a and 12b). 2013 federal tax forms 1040ez Disability insurance payments. 2013 federal tax forms 1040ez   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. 2013 federal tax forms 1040ez It does not matter whether you have reached minimum retirement age. 2013 federal tax forms 1040ez If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. 2013 federal tax forms 1040ez ” Income That Is Not Earned Income Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. 2013 federal tax forms 1040ez Do not include any of these items in your earned income. 2013 federal tax forms 1040ez Earnings while an inmate. 2013 federal tax forms 1040ez   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. 2013 federal tax forms 1040ez This includes amounts for work performed while in a work release program or while in a halfway house. 2013 federal tax forms 1040ez Workfare payments. 2013 federal tax forms 1040ez   Nontaxable workfare payments are not earned income for the EIC. 2013 federal tax forms 1040ez These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if private sector employment is not available, or (2) community service program activities. 2013 federal tax forms 1040ez Community property. 2013 federal tax forms 1040ez   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under those laws. 2013 federal tax forms 1040ez That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. 2013 federal tax forms 1040ez Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. 2013 federal tax forms 1040ez Nevada, Washington, and California domestic partners. 2013 federal tax forms 1040ez   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. 2013 federal tax forms 1040ez Your earned income for the EIC does not include any amount earned by your partner. 2013 federal tax forms 1040ez Your earned income includes the entire amount you earned. 2013 federal tax forms 1040ez For details, see Publication 555. 2013 federal tax forms 1040ez Conservation Reserve Program (CRP) payments. 2013 federal tax forms 1040ez   If you were receiving social security retirement benefits or social security disability benefits at the time you received any CRP payments, your CRP payments are not earned income for the EIC. 2013 federal tax forms 1040ez Nontaxable military pay. 2013 federal tax forms 1040ez   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. 2013 federal tax forms 1040ez Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). 2013 federal tax forms 1040ez See Publication 3, Armed Forces' Tax Guide, for more information. 2013 federal tax forms 1040ez    Combat pay. 2013 federal tax forms 1040ez You can elect to include your nontaxable combat pay in earned income for the EIC. 2013 federal tax forms 1040ez See Nontaxable combat pay election, earlier. 2013 federal tax forms 1040ez Part B. 2013 federal tax forms 1040ez Rules If You Have a Qualifying Child If you have met all of the rules in Part A , read Part B to see if you have a qualifying child. 2013 federal tax forms 1040ez Part B discusses Rules 8 through 10. 2013 federal tax forms 1040ez You must meet all three of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit with a qualifying child. 2013 federal tax forms 1040ez You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. 2013 federal tax forms 1040ez (You cannot file Form 1040EZ. 2013 federal tax forms 1040ez ) You also must complete Schedule EIC and attach it to your return. 2013 federal tax forms 1040ez If you meet all the rules in Part A and this part, read Part D to find out what to do next. 2013 federal tax forms 1040ez If you do not meet Rule 8, you do not have a qualifying child. 2013 federal tax forms 1040ez Read Part C to find out if you can get the earned income credit without a qualifying child. 2013 federal tax forms 1040ez Rule 8. 2013 federal tax forms 1040ez Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. 2013 federal tax forms 1040ez The four tests are: Relationship, Age, Residency, and Joint return. 2013 federal tax forms 1040ez The four tests are illustrated in Figure 36–1. 2013 federal tax forms 1040ez The paragraphs that follow contain more information about each test. 2013 federal tax forms 1040ez Relationship Test To be your qualifying child, a child must be your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), or Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew). 2013 federal tax forms 1040ez The following definitions clarify the relationship test. 2013 federal tax forms 1040ez Adopted child. 2013 federal tax forms 1040ez   An adopted child is always treated as your own child. 2013 federal tax forms 1040ez The term “adopted child” includes a child who was lawfully placed with you for legal adoption. 2013 federal tax forms 1040ez Foster child. 2013 federal tax forms 1040ez   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgement, decree, or other order of any court of competent jurisdiction. 2013 federal tax forms 1040ez An authorized placement agency includes a state or local government agency. 2013 federal tax forms 1040ez It also includes a tax-exempt organization licensed by a state. 2013 federal tax forms 1040ez In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. 2013 federal tax forms 1040ez Example. 2013 federal tax forms 1040ez Debbie, who is 12 years old, was placed in your care 2 years ago by an authorized agency responsible for placing children in foster homes. 2013 federal tax forms 1040ez Debbie is your foster child. 2013 federal tax forms 1040ez Age Test Your child must be: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a student, and younger than you (or your spouse, if filing jointly), or Permanently and totally disabled at any time during 2013, regardless of age. 2013 federal tax forms 1040ez    The following examples and definitions clarify the age test. 2013 federal tax forms 1040ez Example 1—child not under age 19. 2013 federal tax forms 1040ez Your son turned 19 on December 10. 2013 federal tax forms 1040ez Unless he was permanently and totally disabled or a student, he is not a qualifying child because, at the end of the year, he was not under age 19. 2013 federal tax forms 1040ez Example 2—child not younger than you or your spouse. 2013 federal tax forms 1040ez Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. 2013 federal tax forms 1040ez He is not disabled. 2013 federal tax forms 1040ez Both you and your spouse are 21 years old and you file a joint return. 2013 federal tax forms 1040ez Your brother is not your qualifying child because he is not younger than you or your spouse. 2013 federal tax forms 1040ez Example 3—child younger than your spouse but not younger than you. 2013 federal tax forms 1040ez The facts are the same as in Example 2 except that your spouse is 25 years old. 2013 federal tax forms 1040ez Because your brother is younger than your spouse, he is your qualifying child even though he is not younger than you. 2013 federal tax forms 1040ez Student defined. 2013 federal tax forms 1040ez   To qualify as a student, your child must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regular student body at the school, or A student taking a full-time, on-farm training course given by a school described in (1), or a state, county, or local government. 2013 federal tax forms 1040ez The 5 calendar months need not be consecutive. 2013 federal tax forms 1040ez   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. 2013 federal tax forms 1040ez School defined. 2013 federal tax forms 1040ez   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. 2013 federal tax forms 1040ez However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. 2013 federal tax forms 1040ez Vocational high school students. 2013 federal tax forms 1040ez   Students who work in co-op jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. 2013 federal tax forms 1040ez Permanently and totally disabled. 2013 federal tax forms 1040ez   Your child is permanently and totally disabled if both of the following apply. 2013 federal tax forms 1040ez He or she cannot engage in any substantial gainful activity because of a physical or mental condition. 2013 federal tax forms 1040ez A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. 2013 federal tax forms 1040ez Residency Test Your child must have lived with you in the United States for more than half of 2013. 2013 federal tax forms 1040ez The following definitions clarify the residency test. 2013 federal tax forms 1040ez United States. 2013 federal tax forms 1040ez   This means the 50 states and the District of Columbia. 2013 federal tax forms 1040ez It does not include Puerto Rico or U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez possessions such as Guam. 2013 federal tax forms 1040ez Homeless shelter. 2013 federal tax forms 1040ez   Your home can be any location where you regularly live. 2013 federal tax forms 1040ez You do not need a traditional home. 2013 federal tax forms 1040ez For example, if your child lived with you for more than half the year in one or more homeless shelters, your child meets the residency test. 2013 federal tax forms 1040ez Military personnel stationed outside the United States. 2013 federal tax forms 1040ez    U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. 2013 federal tax forms 1040ez Figure 36-1. 2013 federal tax forms 1040ez Tests for Qualifying Child Please click here for the text description of the image. 2013 federal tax forms 1040ez Qualifying child Extended active duty. 2013 federal tax forms 1040ez   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. 2013 federal tax forms 1040ez Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. 2013 federal tax forms 1040ez Birth or death of a child. 2013 federal tax forms 1040ez   A child who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the child's home for more than half the time he or she was alive in 2013. 2013 federal tax forms 1040ez Temporary absences. 2013 federal tax forms 1040ez   Count time that you or your child is away from home on a temporary absence due to a special circumstance as time the child lived with you. 2013 federal tax forms 1040ez Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. 2013 federal tax forms 1040ez Kidnapped child. 2013 federal tax forms 1040ez    A kidnapped child is treated as living with you for more than half of the year if the child lived with you for more than half the part of the year before the date of the kidnapping. 2013 federal tax forms 1040ez The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or your child's family. 2013 federal tax forms 1040ez This treatment applies for all years until the child is returned. 2013 federal tax forms 1040ez However, the last year this treatment can apply is the earlier of: The year there is a determination that the child is dead, or The year the child would have reached age 18. 2013 federal tax forms 1040ez   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. 2013 federal tax forms 1040ez Joint Return Test To meet this test, the child cannot file a joint return for the year. 2013 federal tax forms 1040ez Exception. 2013 federal tax forms 1040ez   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. 2013 federal tax forms 1040ez Example 1—child files joint return. 2013 federal tax forms 1040ez You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. 2013 federal tax forms 1040ez He earned $25,000 for the year. 2013 federal tax forms 1040ez The couple files a joint return. 2013 federal tax forms 1040ez Because your daughter and her husband filed a joint return, she is not your qualifying child. 2013 federal tax forms 1040ez Example 2—child files joint return only to claim a refund of withheld tax. 2013 federal tax forms 1040ez Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. 2013 federal tax forms 1040ez They do not have a child. 2013 federal tax forms 1040ez Neither is required to file a tax return. 2013 federal tax forms 1040ez Taxes were taken out of their pay, so they filed a joint return only to get a refund of the withheld taxes. 2013 federal tax forms 1040ez The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. 2013 federal tax forms 1040ez Example 3—child files joint return to claim American opportunity credit. 2013 federal tax forms 1040ez The facts are the same as in Example 2 except no taxes were taken out of your son's pay. 2013 federal tax forms 1040ez He and his wife are not required to file a tax return, but they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. 2013 federal tax forms 1040ez Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. 2013 federal tax forms 1040ez The exception to the joint return test does not apply, so your son is not your qualifying child. 2013 federal tax forms 1040ez Married child. 2013 federal tax forms 1040ez   Even if your child does not file a joint return, if your child was married at the end of the year, he or she cannot be your qualifying child unless: You can claim an exemption for the child, or The reason you cannot claim an exemption for the child is that you let the child's other parent claim the exemption under the Special rule for divorced or separated parents (or parents who live apart) , described later. 2013 federal tax forms 1040ez Social security number. 2013 federal tax forms 1040ez   The qualifying child must have a valid social security number (SSN) unless the child was born and died in 2013 and you attach to your return a copy of the child's birth certificate, death certificate, or hospital records showing a live birth. 2013 federal tax forms 1040ez You cannot claim the EIC on the basis of a qualifying child if: The qualifying child's SSN is missing from your tax return or is incorrect, The qualifying child's social security card says “Not valid for employment” and was issued for use in getting a federally funded benefit, or Instead of an SSN, the qualifying child has: An individual taxpayer identification number (ITIN), which is issued to a noncitizen who cannot get an SSN, or An adoption taxpayer identification number (ATIN), which is issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. 2013 federal tax forms 1040ez   If you have more than one qualifying child and only one has a valid SSN, you can use only that child to claim the EIC. 2013 federal tax forms 1040ez For more information about SSNs, see Rule 2 . 2013 federal tax forms 1040ez Rule 9. 2013 federal tax forms 1040ez Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Sometimes a child meets the tests to be a qualifying child of more than one person. 2013 federal tax forms 1040ez However, only one of these persons can actually treat the child as a qualifying child. 2013 federal tax forms 1040ez Only that person can use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). 2013 federal tax forms 1040ez The exemption for the child. 2013 federal tax forms 1040ez The child tax credit. 2013 federal tax forms 1040ez Head of household filing status. 2013 federal tax forms 1040ez The credit for child and dependent care expenses. 2013 federal tax forms 1040ez The exclusion for dependent care benefits. 2013 federal tax forms 1040ez The EIC. 2013 federal tax forms 1040ez The other person cannot take any of these benefits based on this qualifying child. 2013 federal tax forms 1040ez In other words, you and the other person cannot agree to divide these tax benefits between you. 2013 federal tax forms 1040ez The other person cannot take any of these tax benefits unless he or she has a different qualifying child. 2013 federal tax forms 1040ez The tiebreaker rules explained next explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. 2013 federal tax forms 1040ez However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. 2013 federal tax forms 1040ez Tiebreaker rules. 2013 federal tax forms 1040ez   To determine which person can treat the child as a qualifying child to claim the six tax benefits just listed, the following tiebreaker rules apply. 2013 federal tax forms 1040ez If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. 2013 federal tax forms 1040ez If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. 2013 federal tax forms 1040ez If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. 2013 federal tax forms 1040ez If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. 2013 federal tax forms 1040ez If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. 2013 federal tax forms 1040ez If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. 2013 federal tax forms 1040ez If the child's parents file a joint return with each other, this rule can be applied by treating the parents' total AGI as divided evenly between them. 2013 federal tax forms 1040ez See Example 8 . 2013 federal tax forms 1040ez   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. 2013 federal tax forms 1040ez See Examples 1 through 13 . 2013 federal tax forms 1040ez   If you cannot claim the EIC because your qualifying child is treated under the tiebreaker rules as the qualifying child of another person for 2013, you may be able to take the EIC using a different qualifying child, but you cannot take the EIC using the rules in Part C for people who do not have a qualifying child. 2013 federal tax forms 1040ez If the other person cannot claim the EIC. 2013 federal tax forms 1040ez   If you and someone else have the same qualifying child but the other person cannot claim the EIC because he or she is not eligible or his or her earned income or AGI is too high, you may be able to treat the child as a qualifying child. 2013 federal tax forms 1040ez See Examples 6 and 7 . 2013 federal tax forms 1040ez But you cannot treat the child as a qualifying child to claim the EIC if the other person uses the child to claim any of the other six tax benefits listed earlier. 2013 federal tax forms 1040ez Examples. 2013 federal tax forms 1040ez The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. 2013 federal tax forms 1040ez Example 1. 2013 federal tax forms 1040ez You and your 2-year-old son Jimmy lived with your mother all year. 2013 federal tax forms 1040ez You are 25 years old, unmarried, and your AGI is $9,000. 2013 federal tax forms 1040ez Your only income was $9,000 from a part-time job. 2013 federal tax forms 1040ez Your mother's only income was $20,000 from her job, and her AGI is $20,000. 2013 federal tax forms 1040ez Jimmy's father did not live with you or Jimmy. 2013 federal tax forms 1040ez The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. 2013 federal tax forms 1040ez Jimmy is a qualifying child of both you and your mother because he meets the relationship, age, residency, and joint return tests for both you and your mother. 2013 federal tax forms 1040ez However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier for which that person qualifies). 2013 federal tax forms 1040ez He is not a qualifying child of anyone else, including his father. 2013 federal tax forms 1040ez If you do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can treat him as a qualifying child to claim the EIC (and any of the other tax benefits listed earlier for which she qualifies). 2013 federal tax forms 1040ez Example 2. 2013 federal tax forms 1040ez The facts are the same as in Example 1 except your AGI is $25,000. 2013 federal tax forms 1040ez Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. 2013 federal tax forms 1040ez Only you can claim him. 2013 federal tax forms 1040ez Example 3. 2013 federal tax forms 1040ez The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. 2013 federal tax forms 1040ez In this case, you as the child's parent will be the only one allowed to claim Jimmy as a qualifying child for the EIC and the other tax benefits listed earlier for which you qualify. 2013 federal tax forms 1040ez The IRS will disallow your mother's claim to the EIC and any of the other tax benefits listed earlier unless she has another qualifying child. 2013 federal tax forms 1040ez Example 4. 2013 federal tax forms 1040ez The facts are the same as in Example 1 except that you also have two other young children who are qualifying children of both you and your mother. 2013 federal tax forms 1040ez Only one of you can claim each child. 2013 federal tax forms 1040ez However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. 2013 federal tax forms 1040ez For example, if you claim one child, your mother can claim the other two. 2013 federal tax forms 1040ez Example 5. 2013 federal tax forms 1040ez The facts are the same as in Example 1 except that you are only 18 years old. 2013 federal tax forms 1040ez This means you are a qualifying child of your mother. 2013 federal tax forms 1040ez Because of Rule 10 , discussed next, you cannot claim the EIC and cannot claim Jimmy as a qualifying child. 2013 federal tax forms 1040ez Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. 2013 federal tax forms 1040ez If your mother meets all the other requirements for claiming the EIC and you do not claim Jimmy as a qualifying child for any of the other tax benefits listed earlier, your mother can claim both you and Jimmy as qualifying children for the EIC. 2013 federal tax forms 1040ez Example 6. 2013 federal tax forms 1040ez The facts are the same as in Example 1 except that your mother earned $50,000 from her job. 2013 federal tax forms 1040ez Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. 2013 federal tax forms 1040ez Example 7. 2013 federal tax forms 1040ez The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. 2013 federal tax forms 1040ez Your earned income is too high for you to claim the EIC. 2013 federal tax forms 1040ez But your mother cannot claim the EIC either, because her AGI is not higher than yours. 2013 federal tax forms 1040ez Example 8. 2013 federal tax forms 1040ez The facts are the same as in Example 1 except that you and Jimmy's father are married to each other, live with Jimmy and your mother, and have an AGI of $30,000 on a joint return. 2013 federal tax forms 1040ez If you and your husband do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can claim him instead. 2013 federal tax forms 1040ez Even though the AGI on your joint return, $30,000, is more than your mother's AGI of $20,000, for this purpose half of the joint AGI can be treated as yours and half as your husband's. 2013 federal tax forms 1040ez In other words, each parent's AGI can be treated as $15,000. 2013 federal tax forms 1040ez Example 9. 2013 federal tax forms 1040ez You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. 2013 federal tax forms 1040ez In August and September, Joey lived with you. 2013 federal tax forms 1040ez For the rest of the year, Joey lived with your husband, who is Joey's father. 2013 federal tax forms 1040ez Joey is a qualifying child of both you and your husband because he lived with each of you for more than half the year and because he met the relationship, age, and joint return tests for both of you. 2013 federal tax forms 1040ez At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the special rule for divorced or separated parents (or parents who live apart) does not apply. 2013 federal tax forms 1040ez You and your husband will file separate returns. 2013 federal tax forms 1040ez Your husband agrees to let you treat Joey as a qualifying child. 2013 federal tax forms 1040ez This means, if your husband does not claim Joey as a qualifying child for any of the tax benefits listed earlier, you can claim him as a qualifying child for any tax benefit listed earlier for which you qualify. 2013 federal tax forms 1040ez However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. 2013 federal tax forms 1040ez See Rule 3 . 2013 federal tax forms 1040ez Example 10. 2013 federal tax forms 1040ez The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. 2013 federal tax forms 1040ez In this case, only your husband will be allowed to treat Joey as a qualifying child. 2013 federal tax forms 1040ez This is because, during 2013, the boy lived with him longer than with you. 2013 federal tax forms 1040ez You cannot claim the EIC (either with or without a qualifying child). 2013 federal tax forms 1040ez However, your husband's filing status is married filing separately, so he cannot claim the EIC or the credit for child and dependent care expenses. 2013 federal tax forms 1040ez See Rule 3 . 2013 federal tax forms 1040ez Example 11. 2013 federal tax forms 1040ez You, your 5-year-old son and your son's father lived together all year. 2013 federal tax forms 1040ez You and your son's father are not married. 2013 federal tax forms 1040ez Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, and joint return tests for both you and his father. 2013 federal tax forms 1040ez Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. 2013 federal tax forms 1040ez Neither of you had any other income. 2013 federal tax forms 1040ez Your son's father agrees to let you treat the child as a qualifying child. 2013 federal tax forms 1040ez This means, if your son's father does not claim your son as a qualifying child for the EIC or any of the other tax benefits listed earlier, you can claim him as a qualifying child for the EIC and any of the other tax benefits listed earlier for which you qualify. 2013 federal tax forms 1040ez Example 12. 2013 federal tax forms 1040ez The facts are the same as in Example 11 except that you and your son's father both claim your son as a qualifying child. 2013 federal tax forms 1040ez In this case, only your son's father will be allowed to treat your son as a qualifying child. 2013 federal tax forms 1040ez This is because his AGI, $14,000, is more than your AGI, $12,000. 2013 federal tax forms 1040ez You cannot claim the EIC (either with or without a qualifying child). 2013 federal tax forms 1040ez Example 13. 2013 federal tax forms 1040ez You and your 7-year-old niece, your sister's child, lived with your mother all year. 2013 federal tax forms 1040ez You are 25 years old, and your AGI is $9,300. 2013 federal tax forms 1040ez Your only income was from a part-time job. 2013 federal tax forms 1040ez Your mother's AGI is $15,000. 2013 federal tax forms 1040ez Her only income was from her job. 2013 federal tax forms 1040ez Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. 2013 federal tax forms 1040ez Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, and joint return tests for both you and your mother. 2013 federal tax forms 1040ez However, only your mother can treat her as a qualifying child. 2013 federal tax forms 1040ez This is because your mother's AGI, $15,000, is more than your AGI, $9,300. 2013 federal tax forms 1040ez Special rule for divorced or separated parents (or parents who live apart). 2013 federal tax forms 1040ez   A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following statements are true. 2013 federal tax forms 1040ez The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of 2013, whether or not they are or were married. 2013 federal tax forms 1040ez The child received over half of his or her support for the year from the parents. 2013 federal tax forms 1040ez The child is in the custody of one or both parents for more than half of 2013. 2013 federal tax forms 1040ez Either of the following statements is true. 2013 federal tax forms 1040ez The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return. 2013 federal tax forms 1040ez If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. 2013 federal tax forms 1040ez A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 provides that the noncustodial parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during 2013. 2013 federal tax forms 1040ez  For details, see chapter 3. 2013 federal tax forms 1040ez Also see Applying Rule 9 to divorced or separated parents (or parents who live apart) , next. 2013 federal tax forms 1040ez Applying Rule 9 to divorced or separated parents (or parents who live apart). 2013 federal tax forms 1040ez   If a child is treated as the qualifying child of the noncustodial parent under the special rule just described for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. 2013 federal tax forms 1040ez However, the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for the EIC and other tax benefits listed earlier in this chapter. 2013 federal tax forms 1040ez If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine which person can treat the child as a qualifying child. 2013 federal tax forms 1040ez Example 1. 2013 federal tax forms 1040ez You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. 2013 federal tax forms 1040ez Your AGI is $10,000. 2013 federal tax forms 1040ez Your mother’s AGI is $25,000. 2013 federal tax forms 1040ez Your son's father did not live with you or your son. 2013 federal tax forms 1040ez Under the special rule for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child. 2013 federal tax forms 1040ez However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the EIC. 2013 federal tax forms 1040ez You and your mother did not have any child care expenses or dependent care benefits. 2013 federal tax forms 1040ez If you do not claim your son as a qualifying child, your mother can claim him as a qualifying child for the EIC and head of household filing status, if she qualifies for these tax benefits. 2013 federal tax forms 1040ez Example 2. 2013 federal tax forms 1040ez The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. 2013 federal tax forms 1040ez Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. 2013 federal tax forms 1040ez Example 3. 2013 federal tax forms 1040ez The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the EIC. 2013 federal tax forms 1040ez Your mother also claims him as a qualifying child for head of household filing status. 2013 federal tax forms 1040ez You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. 2013 federal tax forms 1040ez The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. 2013 federal tax forms 1040ez Rule 10. 2013 federal tax forms 1040ez You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. 2013 federal tax forms 1040ez ) if all of the following statements are true. 2013 federal tax forms 1040ez You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. 2013 federal tax forms 1040ez Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). 2013 federal tax forms 1040ez You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. 2013 federal tax forms 1040ez You lived with that person in the United States for more than half of the year. 2013 federal tax forms 1040ez You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). 2013 federal tax forms 1040ez For more details about the tests to be a qualifying child, see Rule 8 . 2013 federal tax forms 1040ez If you are a qualifying child of another taxpayer, you cannot claim the EIC. 2013 federal tax forms 1040ez This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. 2013 federal tax forms 1040ez Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). 2013 federal tax forms 1040ez Example. 2013 federal tax forms 1040ez You and your daughter lived with your mother all year. 2013 federal tax forms 1040ez You are 22 years old, unmarried, and attended a trade school full time. 2013 federal tax forms 1040ez You had a part-time job and earned $5,700. 2013 federal tax forms 1040ez You had no other income. 2013 federal tax forms 1040ez Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. 2013 federal tax forms 1040ez She can claim the EIC if she meets all the other requirements. 2013 federal tax forms 1040ez Because you are your mother's qualifying child, you cannot claim the EIC. 2013 federal tax forms 1040ez This is so even if your mother cannot or does not claim the EIC. 2013 federal tax forms 1040ez Child of person not required to file a return. 2013 federal tax forms 1040ez   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. 2013 federal tax forms 1040ez Example. 2013 federal tax forms 1040ez The facts are the same as in the last example except your mother had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. 2013 federal tax forms 1040ez As a result, you are not your mother's qualifying child. 2013 federal tax forms 1040ez You can claim the EIC if you meet all the other requirements to do so. 2013 federal tax forms 1040ez   See Rule 10 in Publication 596 for additional examples. 2013 federal tax forms 1040ez Part C. 2013 federal tax forms 1040ez Rules If You Do Not Have a Qualifying Child Read this part if you: Do not have a qualifying child, and Have met all the rules in Part A . 2013 federal tax forms 1040ez  Part C discusses Rules 11 through 14. 2013 federal tax forms 1040ez You must meet all four of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit without a qualifying child. 2013 federal tax forms 1040ez If you have a qualifying child, the rules in this part do not apply to you. 2013 federal tax forms 1040ez You can claim the credit only if you meet all the rules in Parts A, B, and D. 2013 federal tax forms 1040ez See Rule 8 to find out if you have a qualifying child. 2013 federal tax forms 1040ez Rule 11. 2013 federal tax forms 1040ez You Must Be at Least Age 25 but Under Age 65 You must be at least age 25 but under age 65 at the end of 2013. 2013 federal tax forms 1040ez If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65 at the end of 2013. 2013 federal tax forms 1040ez It does not matter which spouse meets the age test, as long as one of the spouses does. 2013 federal tax forms 1040ez You meet the age test if you were born after December 31, 1948, and before January 2, 1989. 2013 federal tax forms 1040ez If you are married filing a joint return, you meet the age test if either you or your spouse was born after December 31, 1948, and before January 2, 1989. 2013 federal tax forms 1040ez If neither you nor your spouse meets the age test, you cannot claim the EIC. 2013 federal tax forms 1040ez Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). 2013 federal tax forms 1040ez Death of spouse. 2013 federal tax forms 1040ez   If you are filing a joint return with your spouse who died in 2013, you meet the age test if your spouse was at least age 25 but under age 65 at the time of death. 2013 federal tax forms 1040ez Example 1. 2013 federal tax forms 1040ez You are age 28 and unmarried. 2013 federal tax forms 1040ez You meet the age test. 2013 federal tax forms 1040ez Example 2—spouse meets age test. 2013 federal tax forms 1040ez You are married and filing a joint return. 2013 federal tax forms 1040ez You are age 23 and your spouse is age 27. 2013 federal tax forms 1040ez You meet the age test because your spouse is at least age 25 but under age 65. 2013 federal tax forms 1040ez Example 3—spouse dies in 2013. 2013 federal tax forms 1040ez You are married and filing a joint return with your spouse who died in August 2013. 2013 federal tax forms 1040ez You are age 67. 2013 federal tax forms 1040ez Your spouse would have become age 65 in November 2013. 2013 federal tax forms 1040ez Because your spouse was under age 65 when she died, you meet the age test. 2013 federal tax forms 1040ez Rule 12. 2013 federal tax forms 1040ez You Cannot Be the Dependent of Another Person If you are not filing a joint return, you meet this rule if: You checked box 6a on Form 1040 or 1040A, or You did not check the “You” box on line 5 of Form 1040EZ, and you entered $10,000 on that line. 2013 federal tax forms 1040ez If you are filing a joint return, you meet this rule if: You checked both box 6a and box 6b on Form 1040 or 1040A, or You and your spouse did not check either the “You” box or the “Spouse” box on line 5 of Form 1040EZ, and you entered $20,000 on that line. 2013 federal tax forms 1040ez If you are not sure whether someone else can claim you (or your spouse, if filing a joint return) as a dependent, read the rules for claiming a dependent in chapter 3. 2013 federal tax forms 1040ez If someone else can claim you (or your spouse, if filing a joint return) as a dependent on his or her return, but does not, you still cannot claim the credit. 2013 federal tax forms 1040ez Example 1. 2013 federal tax forms 1040ez In 2013, you were age 25, single, and living at home with your parents. 2013 federal tax forms 1040ez You worked and were not a student. 2013 federal tax forms 1040ez You earned $7,500. 2013 federal tax forms 1040ez Your parents cannot claim you as a dependent. 2013 federal tax forms 1040ez When you file your return, you claim an exemption for yourself by not checking the “You” box on line 5 of your Form 1040EZ and by entering $10,000 on that line. 2013 federal tax forms 1040ez You meet this rule. 2013 federal tax forms 1040ez You can claim the EIC if you meet all the other requirements. 2013 federal tax forms 1040ez Example 2. 2013 federal tax forms 1040ez The facts are the same as in Example 1 , except that you earned $2,000. 2013 federal tax forms 1040ez Your parents can claim you as a dependent but decide not to. 2013 federal tax forms 1040ez You do not meet this rule. 2013 federal tax forms 1040ez You cannot claim the credit because your parents could have claimed you as a dependent. 2013 federal tax forms 1040ez Joint returns. 2013 federal tax forms 1040ez   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. 2013 federal tax forms 1040ez   However, another person may be able to claim you as a dependent if you and your spouse file a joint return only to get a refund of income tax withheld or estimated tax paid. 2013 federal tax forms 1040ez But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. 2013 federal tax forms 1040ez Example 1. 2013 federal tax forms 1040ez You are 26 years old. 2013 federal tax forms 1040ez You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. 2013 federal tax forms 1040ez Neither you nor your wife is required to file a tax return. 2013 federal tax forms 1040ez You do not have a child. 2013 federal tax forms 1040ez Taxes were taken out of your pay, so you file a joint return only to get a refund of the withheld taxes. 2013 federal tax forms 1040ez Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. 2013 federal tax forms 1040ez They can claim exemptions for you and your wife if all the other tests to do so are met. 2013 federal tax forms 1040ez Example 2. 2013 federal tax forms 1040ez The facts are the same as in Example 1 except no taxes were taken out of your pay. 2013 federal tax forms 1040ez Also, you and your wife are not required to file a tax return, but you file a joint return to claim an EIC of $63 and get a refund of that amount. 2013 federal tax forms 1040ez Because claiming the EIC is your reason for filing the return, you are not filing it only to get a refund of income tax withheld or estimated tax paid. 2013 federal tax forms 1040ez Your parents cannot claim an exemption for either you or your wife. 2013 federal tax forms 1040ez Rule 13. 2013 federal tax forms 1040ez You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. 2013 federal tax forms 1040ez ) if all of the following statements are true. 2013 federal tax forms 1040ez You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. 2013 federal tax forms 1040ez Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). 2013 federal tax forms 1040ez You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student (as defined in Rule 8 ), and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. 2013 federal tax forms 1040ez You lived with that person in the United States for more than half of the year. 2013 federal tax forms 1040ez You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). 2013 federal tax forms 1040ez For more details about the tests to be a qualifying child, see Rule 8 . 2013 federal tax forms 1040ez If you are a qualifying child of another taxpayer, you cannot claim the EIC. 2013 federal tax forms 1040ez This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. 2013 federal tax forms 1040ez Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). 2013 federal tax forms 1040ez Example. 2013 federal tax forms 1040ez You lived with your mother all year. 2013 federal tax forms 1040ez You are age 26, unmarried, and permanently and totally disabled. 2013 federal tax forms 1040ez Your only income was from a community center where you went three days a week to answer telephones. 2013 federal tax forms 1040ez You earned $5,000 for the year and provided more than half of your own support. 2013 federal tax forms 1040ez Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. 2013 federal tax forms 1040ez She can claim the EIC if she meets all the other requirements. 2013 federal tax forms 1040ez Because you are a qualifying child of your mother, you cannot claim the EIC. 2013 federal tax forms 1040ez This is so even if your mother cannot or does not claim the EIC. 2013 federal tax forms 1040ez Joint returns. 2013 federal tax forms 1040ez   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. 2013 federal tax forms 1040ez   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return for the year only to get a refund of income tax withheld or estimated tax paid. 2013 federal tax forms 1040ez But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. 2013 federal tax forms 1040ez Child of person not required to file a return. 2013 federal tax forms 1040ez   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. 2013 federal tax forms 1040ez Example. 2013 federal tax forms 1040ez You lived all year with your father. 2013 federal tax forms 1040ez You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. 2013 federal tax forms 1040ez You have no other income, no children, and provided more than half of your own support. 2013 federal tax forms 1040ez Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. 2013 federal tax forms 1040ez As a result, you are not your father's qualifying child. 2013 federal tax forms 1040ez You can claim the EIC if you meet all the other requirements to do so. 2013 federal tax forms 1040ez   See Rule 13 in Publication 596 for additional examples. 2013 federal tax forms 1040ez Rule 14. 2013 federal tax forms 1040ez You Must Have Lived in the United States More Than Half of the Year Your home (and your spouse's, if filing a joint return) must have been in the United States for more than half the year. 2013 federal tax forms 1040ez If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). 2013 federal tax forms 1040ez United States. 2013 federal tax forms 1040ez   This means the 50 states and the District of Columbia. 2013 federal tax forms 1040ez It does not include Puerto Rico or U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez possessions such as Guam. 2013 federal tax forms 1040ez Homeless shelter. 2013 federal tax forms 1040ez   Your home can be any location where you regularly live. 2013 federal tax forms 1040ez You do not need a traditional home. 2013 federal tax forms 1040ez If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. 2013 federal tax forms 1040ez Military personnel stationed outside the United States. 2013 federal tax forms 1040ez   U. 2013 federal tax forms 1040ez S. 2013 federal tax forms 1040ez military personnel stationed outside the United States on extended active duty (defined in Rule 8 ) are considered to live in the United States during that duty period for purposes of the EIC. 2013 federal tax forms 1040ez Part D. 2013 federal tax forms 1040ez Figuring and Claiming the EIC Read this part if you have met all the rules in Parts A and B, or all the rules in Parts A and C. 2013 federal tax forms 1040ez Part D discusses Rule 15 . 2013 federal tax forms 1040ez You must meet this rule, in addition to the rules in Parts A and B , or Parts A and C , to qualify for the earned income credit. 2013 federal tax forms 1040ez This part of the chapter also explains how to figure the amount of your credit. 2013 federal tax forms 1040ez You have two choices. 2013 federal tax forms 1040ez Have the IRS figure the EIC for you. 2013 federal tax forms 1040ez If you want to do this, see IRS Will Figure the EIC for You . 2013 federal tax forms 1040ez Figure the EIC yourself. 2013 federal tax forms 1040ez If you want to do this, see How To Figure the EIC Yourself . 2013 federal tax forms 1040ez Rule 15. 2013 federal tax forms 1040ez Your Earned Income Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. 2013 federal tax forms 1040ez Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. 2013 federal tax forms 1040ez Employee pay is earned income only if it is taxable. 2013 federal tax forms 1040ez Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. 2013 federal tax forms 1040ez But there is an exception for nontaxable combat pay, which you can choose to include in earned income. 2013 federal tax forms 1040ez Earned income is explained in detail in Rule 7 . 2013 federal tax forms 1040ez Figuring earned income. 2013 federal tax forms 1040ez   If you are self-employed, a statutory employee, or a member of the clergy or a church employee who files Schedule SE (Form 1040), you will figure your earned income when you fill out Part 4 of EIC Worksheet B in the Form 1040 instructions. 2013 federal tax forms 1040ez   Otherwise, figure your earned income by using the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b or the Form 1040A instructions for lines 38a and 38b, or the worksheet in Step 2 of the Form 1040EZ instructions for lines 8a and 8b. 2013 federal tax forms 1040ez   When using one of those worksheets to figure your earned income, you will start with the amount on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). 2013 federal tax forms 1040ez You will then reduce that amount by any amount included on that line and described in the following list: Scholarship or fellowship grants not reported on a Form W-2, Inmate's income, and Pension or annuity from deferred compensation plans. 2013 federal tax forms 1040ez Scholarship or fellowship grants not reported on a Form W-2. 2013 federal tax forms 1040ez   A scholarship or fellowship grant that was not reported to you on a Form W-2 is not considered earned income for the earned income credit. 2013 federal tax forms 1040ez Inmate's income. 2013 federal tax forms 1040ez   Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. 2013 federal tax forms 1040ez This includes amounts received for work performed while in a work release program or while in a halfway house. 2013 federal tax forms 1040ez If you received any amount for work done while an inmate in a penal institution and that amount is included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “PRI” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). 2013 federal tax forms 1040ez Pension or annuity from deferred compensation plans. 2013 federal tax forms 1040ez   A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan is not considered earned income for the earned income credit. 2013 federal tax forms 1040ez If you received such an amount and it was included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “DFC” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). 2013 federal tax forms 1040ez This amount may be reported in box 11 of your Form W-2. 2013 federal tax forms 1040ez If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. 2013 federal tax forms 1040ez Clergy. 2013 federal tax forms 1040ez   If you are a member of the clergy who files Schedule SE and the amount on line 2 of that schedule includes an amount that was also reported on line 7 (Form 1040), subtract that amount from the amount on line 7 (Form 1040) and enter the result in the first space of the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b. 2013 federal tax forms 1040ez Put “Clergy” on the dotted line next to line 64a (Form 1040). 2013 federal tax forms 1040ez Church employees. 2013 federal tax forms 1040ez    A church employee means an employee (other than a minister or member of a religious order) of a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes. 2013 federal tax forms 1040ez If you received wages as a