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Can I File My 2011 Taxes In 2013

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Can I File My 2011 Taxes In 2013

Can i file my 2011 taxes in 2013 2. Can i file my 2011 taxes in 2013   American Opportunity Credit Table of Contents Introduction Can You Claim the CreditWho Can Claim the Credit Who Cannot Claim the Credit What Expenses QualifyQualified Education Expenses No Double Benefit Allowed Expenses That Do Not Qualify Who Is an Eligible StudentException. Can i file my 2011 taxes in 2013 Who Can Claim a Dependent's Expenses Figuring the CreditEffect of the Amount of Your Income on the Amount of Your Credit Refundable Part of Credit Claiming the Credit Introduction For 2013, there are two tax credits available to help you offset the costs of higher education by reducing the amount of your income tax. Can i file my 2011 taxes in 2013 They are the American opportunity credit (this chapter) and the lifetime learning credit ( chapter 3 ). Can i file my 2011 taxes in 2013 This chapter explains: Who can claim the American opportunity credit, What expenses qualify for the credit, Who is an eligible student, Who can claim a dependent's expenses, How to figure the credit, How to claim the credit, and When the credit must be repaid. Can i file my 2011 taxes in 2013 What is the tax benefit of the American opportunity credit. Can i file my 2011 taxes in 2013   For the tax year, you may be able to claim an American opportunity credit of up to $2,500 for qualified education expenses paid for each eligible student. Can i file my 2011 taxes in 2013   A tax credit reduces the amount of income tax you may have to pay. Can i file my 2011 taxes in 2013 Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself. Can i file my 2011 taxes in 2013 Forty percent of the American opportunity credit may be refundable. Can i file my 2011 taxes in 2013 This means that if the refundable portion of your credit is more than your tax, the excess will be refunded to you. Can i file my 2011 taxes in 2013   Your allowable American opportunity credit may be limited by the amount of your income. Can i file my 2011 taxes in 2013 Also, the nonrefundable part of the credit may be limited by the amount of your tax. Can i file my 2011 taxes in 2013 Overview of the American opportunity credit. Can i file my 2011 taxes in 2013   See Table 2-1, Overview of the American Opportunity Credit , for the basics of this credit. Can i file my 2011 taxes in 2013 The details are discussed in this chapter. Can i file my 2011 taxes in 2013 Can you claim more than one education credit this year. Can i file my 2011 taxes in 2013   For each student, you can elect for any year only one of the credits. Can i file my 2011 taxes in 2013 For example, if you elect to take the American opportunity credit for a child on your 2013 tax return, you cannot use that same child's qualified education expenses to figure the lifetime learning credit for 2013. Can i file my 2011 taxes in 2013   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity credit on a per-student, per-year basis. Can i file my 2011 taxes in 2013 If you pay qualified education expenses for a student (or students) for whom you do not claim the American opportunity credit, you can use the adjusted qualified education expenses of that student (or those students) in figuring your lifetime learning credit. Can i file my 2011 taxes in 2013 This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. Can i file my 2011 taxes in 2013 Differences between the American opportunity and lifetime learning credits. Can i file my 2011 taxes in 2013   There are several differences between these two credits. Can i file my 2011 taxes in 2013 For example, you can claim the American opportunity credit based on the same student's expenses for no more than 4 tax years, which includes any tax years you claimed the Hope Scholarship Credit for that student. Can i file my 2011 taxes in 2013 However, there is no limit on the number of years for which you can claim a lifetime learning credit based on the same student's expenses. Can i file my 2011 taxes in 2013 The differences between these credits are shown in Appendix B, Highlights of Education Tax Benefits for Tax Year 2013 near the end of this publication. Can i file my 2011 taxes in 2013 If you claim the American opportunity credit for any student, you can choose between using that student's adjusted qualified education expenses for the American opportunity credit or the lifetime learning credit. Can i file my 2011 taxes in 2013 If you have the choice, the American opportunity credit will always be greater than the lifetime learning credit. Can i file my 2011 taxes in 2013 Table 2-1. Can i file my 2011 taxes in 2013 Overview of the American Opportunity Credit Maximum credit Up to $2,500 credit per eligible student Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly; $90,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable; the rest is nonrefundable Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) Hope Scholarship Credit was claimed) Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period that begins during the tax year Felony drug conviction As of the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Can You Claim the Credit The following rules will help you determine if you are eligible to claim the American opportunity credit on your tax return. Can i file my 2011 taxes in 2013 Who Can Claim the Credit Generally, you can claim the American opportunity credit if all three of the following requirements are met. Can i file my 2011 taxes in 2013 You pay qualified education expenses of higher education. Can i file my 2011 taxes in 2013 You pay the education expenses for an eligible student. Can i file my 2011 taxes in 2013 The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Can i file my 2011 taxes in 2013 Student qualifications. Can i file my 2011 taxes in 2013   Generally, you can take the American opportunity credit for a student only if all of the following four requirements are met. Can i file my 2011 taxes in 2013 As of the beginning of 2013, the student had not completed the first four years of postsecondary education (generally, the freshman through senior years of college), as determined by the eligible educational institution. Can i file my 2011 taxes in 2013 For this purpose, do not include academic credit awarded solely because of the student's performance on proficiency examinations. Can i file my 2011 taxes in 2013 Neither the American opportunity credit nor the Hope Scholarship Credit has been claimed (by you or anyone else) for this student for any four tax years before 2013. Can i file my 2011 taxes in 2013 If the American opportunity credit (and Hope Scholarship Credit) has been claimed for this student for any three or fewer tax years before 2013, this requirement is met. Can i file my 2011 taxes in 2013 For at least one academic period beginning (or treated as beginning) in 2013, the student both: Was enrolled in a program that leads to a degree, certificate, or other recognized educational credential; and Carried at least one-half the normal full-time workload for his or her course of study. Can i file my 2011 taxes in 2013 The standard for what is half of the normal full-time work load is determined by each eligible educational institution. Can i file my 2011 taxes in 2013 However, the standard may not be lower than any of those established by the U. Can i file my 2011 taxes in 2013 S. Can i file my 2011 taxes in 2013 Department of Education under the Higher Education Act of 1965. Can i file my 2011 taxes in 2013 For purposes of whether the student satisfies this third requirement for 2013, treat an academic period beginning in the first three months of 2014 as if it began in 2013 if qualified education expenses for the student were paid in 2013 for that academic period. Can i file my 2011 taxes in 2013 See Prepaid expenses, later. Can i file my 2011 taxes in 2013 As of the end of 2013, the student had not been convicted of a federal or state felony for possessing or distributing a controlled substance. Can i file my 2011 taxes in 2013 Example 1. Can i file my 2011 taxes in 2013 Sharon was eligible for the Hope Scholarship Credit for 2007 and 2008 and for the American opportunity credit for 2010 and 2012. Can i file my 2011 taxes in 2013 Her parents claimed the Hope Scholarship Credit for Sharon on their tax returns for 2007 and 2008 and claimed the American opportunity credit for Sharon on their 2010 tax return. Can i file my 2011 taxes in 2013 Sharon claimed the American opportunity credit on her 2012 tax return. Can i file my 2011 taxes in 2013 The American opportunity credit and Hope Scholarship Credit have been claimed for Sharon for four tax years before 2013. Can i file my 2011 taxes in 2013 Therefore, the American opportunity credit cannot be claimed by Sharon for 2013. Can i file my 2011 taxes in 2013 If Sharon were to file Form 8863 for 2013, she would check “Yes” for Part III, line 23, and would be eligible to claim only the lifetime learning credit. Can i file my 2011 taxes in 2013 Example 2. Can i file my 2011 taxes in 2013 Wilbert was eligible for the American opportunity credit for 2009, 2010, 2011, and 2013. Can i file my 2011 taxes in 2013 His parents claimed the American opportunity credit for Wilbert on their tax returns for 2009, 2010, and 2011. Can i file my 2011 taxes in 2013 No one claimed an American opportunity credit or Hope Scholarship Credit for Wilbert for any other tax year. Can i file my 2011 taxes in 2013 The American opportunity credit and Hope Scholarship Credit have been claimed for Wilbert for only three tax years before 2013. Can i file my 2011 taxes in 2013 Therefore, Wilbert meets the second requirement to be eligible for the American opportunity credit. Can i file my 2011 taxes in 2013 If Wilbert were to file Form 8863 for 2013, he would check “No” for Part III, line 23. Can i file my 2011 taxes in 2013 If Wilbert meets all of the other requirements, he is eligible for the American opportunity credit. Can i file my 2011 taxes in 2013 Example 3. Can i file my 2011 taxes in 2013 Glenda enrolls on a full-time basis in a degree program for the 2014 Spring semester, which begins in January 2014. Can i file my 2011 taxes in 2013 Glenda pays her tuition for the 2014 Spring semester in December 2013. Can i file my 2011 taxes in 2013 Because the tuition Glenda paid in 2013 relates to an academic period that begins in the first 3 months of 2014, her eligibility to claim an American opportunity credit in 2013 is determined as if the 2014 Spring semester began in 2013. Can i file my 2011 taxes in 2013 If the requirements above are not met for any student, you cannot take the American opportunity credit for that student. Can i file my 2011 taxes in 2013 You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. Can i file my 2011 taxes in 2013 Note. Can i file my 2011 taxes in 2013 Qualified education expenses paid by a dependent for whom you claim an exemption, or by a third party for that dependent, are considered paid by you. Can i file my 2011 taxes in 2013 “Qualified education expenses” are defined later under Qualified Education Expenses . Can i file my 2011 taxes in 2013 “Eligible students” are defined later under Who Is an Eligible Student . Can i file my 2011 taxes in 2013 A dependent for whom you claim an exemption is defined later under Who Can Claim a Dependent's Expenses . Can i file my 2011 taxes in 2013 You may find Figure 2-1, Can You Claim the American Opportunity Credit for 2013 , later, helpful in determining if you can claim an American opportunity credit on your tax return. Can i file my 2011 taxes in 2013 This image is too large to be displayed in the current screen. Can i file my 2011 taxes in 2013 Please click the link to view the image. Can i file my 2011 taxes in 2013 Figure 2-1 Can you claim the American opportunity credit for 2012? Who Cannot Claim the Credit You cannot claim the American opportunity credit for 2013 if any of the following apply. Can i file my 2011 taxes in 2013 Your filing status is married filing separately. Can i file my 2011 taxes in 2013 You are listed as a dependent on another person's tax return (such as your parents'). Can i file my 2011 taxes in 2013 See Who Can Claim a Dependent's Expenses , later. Can i file my 2011 taxes in 2013 Your modified adjusted gross income (MAGI) is $90,000 or more ($180,000 or more in the case of a joint return). Can i file my 2011 taxes in 2013 MAGI is explained later under Effect of the Amount of Your Income on the Amount of Your Credit . Can i file my 2011 taxes in 2013 You (or your spouse) were a nonresident alien for any part of 2013 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. Can i file my 2011 taxes in 2013 More information on nonresident aliens can be found in Publication 519, U. Can i file my 2011 taxes in 2013 S. Can i file my 2011 taxes in 2013 Tax Guide for Aliens. Can i file my 2011 taxes in 2013 What Expenses Qualify The American opportunity credit is based on adjusted qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Can i file my 2011 taxes in 2013 Generally, the credit is allowed for adjusted qualified education expenses paid in 2013 for an academic period beginning in 2013 or beginning in the first three months of 2014. Can i file my 2011 taxes in 2013 For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning January 2014, you can use that $1,500 in figuring your 2013 credit. Can i file my 2011 taxes in 2013 Academic period. Can i file my 2011 taxes in 2013   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. Can i file my 2011 taxes in 2013 In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. Can i file my 2011 taxes in 2013 Paid with borrowed funds. Can i file my 2011 taxes in 2013   You can claim an American opportunity credit for qualified education expenses paid with the proceeds of a loan. Can i file my 2011 taxes in 2013 Use the expenses to figure the American opportunity credit for the year in which the expenses are paid, not the year in which the loan is repaid. Can i file my 2011 taxes in 2013 Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. Can i file my 2011 taxes in 2013 Student withdraws from class(es). Can i file my 2011 taxes in 2013   You can claim an American opportunity credit for qualified education expenses not refunded when a student withdraws. Can i file my 2011 taxes in 2013 Qualified Education Expenses For purposes of the American opportunity credit, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. Can i file my 2011 taxes in 2013 Eligible educational institution. Can i file my 2011 taxes in 2013   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Can i file my 2011 taxes in 2013 S. Can i file my 2011 taxes in 2013 Department of Education. Can i file my 2011 taxes in 2013 It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Can i file my 2011 taxes in 2013 The educational institution should be able to tell you if it is an eligible educational institution. Can i file my 2011 taxes in 2013   Certain educational institutions located outside the United States also participate in the U. Can i file my 2011 taxes in 2013 S. Can i file my 2011 taxes in 2013 Department of Education's Federal Student Aid (FSA) programs. Can i file my 2011 taxes in 2013 Related expenses. Can i file my 2011 taxes in 2013   Student-activity fees are included in qualified education expenses only if the fees must be paid to the institution as a condition of enrollment or attendance. Can i file my 2011 taxes in 2013   However, expenses for books, supplies, and equipment needed for a course of study are included in qualified education expenses whether or not the materials are purchased from the educational institution. Can i file my 2011 taxes in 2013 Prepaid expenses. Can i file my 2011 taxes in 2013   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring an education credit for 2013 only. Can i file my 2011 taxes in 2013 See Academic period, earlier. Can i file my 2011 taxes in 2013 For example, if you pay $2,000 in December 2013, for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). Can i file my 2011 taxes in 2013    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). Can i file my 2011 taxes in 2013   In the following examples, assume that each student is an eligible student at an eligible educational institution. Can i file my 2011 taxes in 2013 Example 1. Can i file my 2011 taxes in 2013 Jefferson is a sophomore in University V's degree program in dentistry. Can i file my 2011 taxes in 2013 This year, in addition to tuition, he is required to pay a fee to the university for the rental of the dental equipment he will use in this program. Can i file my 2011 taxes in 2013 Because the equipment rental is needed for his course of study, Jefferson's equipment rental fee is a qualified expense. Can i file my 2011 taxes in 2013 Example 2. Can i file my 2011 taxes in 2013 Grace and William, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. Can i file my 2011 taxes in 2013 The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will receive a bill directly from the college. Can i file my 2011 taxes in 2013 William bought his books from a friend; Grace bought hers at College W's bookstore. Can i file my 2011 taxes in 2013 Both are qualified education expenses for the American opportunity credit. Can i file my 2011 taxes in 2013 Example 3. Can i file my 2011 taxes in 2013 When Kelly enrolled at College X for her freshman year, she had to pay a separate student activity fee in addition to her tuition. Can i file my 2011 taxes in 2013 This activity fee is required of all students, and is used solely to fund on-campus organizations and activities run by students, such as the student newspaper and the student government. Can i file my 2011 taxes in 2013 No portion of the fee covers personal expenses. Can i file my 2011 taxes in 2013 Although labeled as a student activity fee, the fee is required for Kelly's enrollment and attendance at College X and is a qualified expense. Can i file my 2011 taxes in 2013 No Double Benefit Allowed You cannot do any of the following. Can i file my 2011 taxes in 2013 Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an American opportunity credit based on those same expenses. Can i file my 2011 taxes in 2013 Claim an American opportunity credit in the same year that you are claiming a tuition and fees deduction for the same student. Can i file my 2011 taxes in 2013 Claim an American opportunity credit for any student and use any of that student's expenses in figuring your lifetime learning credit. Can i file my 2011 taxes in 2013 Figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP) using the same expenses you used to figure the American opportunity credit. Can i file my 2011 taxes in 2013 See Coordination With American Opportunity and Lifetime Learning Credits in chapter 7, Coverdell Education Savings Account, and Coordination With American Opportunity and Lifetime Learning Credits in chapter 8, Qualified Tuition Program. Can i file my 2011 taxes in 2013 Claim a credit based on qualified education expenses paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer. Can i file my 2011 taxes in 2013 See Adjustments to Qualified Education Expenses, next. Can i file my 2011 taxes in 2013 Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. Can i file my 2011 taxes in 2013 The result is the amount of adjusted qualified education expenses for each student. Can i file my 2011 taxes in 2013 Tax-free educational assistance. Can i file my 2011 taxes in 2013   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. Can i file my 2011 taxes in 2013 See Academic period, earlier. Can i file my 2011 taxes in 2013   Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. Can i file my 2011 taxes in 2013 This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). Can i file my 2011 taxes in 2013   If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. Can i file my 2011 taxes in 2013 If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. Can i file my 2011 taxes in 2013   Tax-free educational assistance includes: The tax-free parts of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). Can i file my 2011 taxes in 2013 Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Can i file my 2011 taxes in 2013 Generally, any scholarship or fellowship is treated as tax free. Can i file my 2011 taxes in 2013 However, a scholarship or fellowship is not treated as tax free to the extent the student includes it in gross income (if the student is required to file a tax return for the year the scholarship or fellowship is received) and either of the following is true. Can i file my 2011 taxes in 2013 The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Can i file my 2011 taxes in 2013 The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Can i file my 2011 taxes in 2013 You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year it is received. Can i file my 2011 taxes in 2013 For examples, see Coordination with Pell grants and other scholarships, later. Can i file my 2011 taxes in 2013 Refunds. Can i file my 2011 taxes in 2013   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or require repayment (recapture) of a credit claimed in an earlier year. Can i file my 2011 taxes in 2013 Some tax-free educational assistance received after 2013 may be treated as a refund. Can i file my 2011 taxes in 2013 See Tax-free educational assistance, earlier. Can i file my 2011 taxes in 2013 Refunds received in 2013. Can i file my 2011 taxes in 2013   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses for 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. Can i file my 2011 taxes in 2013 Refunds received after 2013 but before your income tax return is filed. Can i file my 2011 taxes in 2013   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid before you file an income tax return for 2013, the amount of qualified education expenses for 2013 is reduced by the amount of the refund. Can i file my 2011 taxes in 2013 Refunds received after 2013 and after your income tax return is filed. Can i file my 2011 taxes in 2013   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid after you file an income tax return for 2013, you may need to repay some or all of the credit. Can i file my 2011 taxes in 2013 See Credit recapture, next. Can i file my 2011 taxes in 2013 Credit recapture. Can i file my 2011 taxes in 2013    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. Can i file my 2011 taxes in 2013 You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. Can i file my 2011 taxes in 2013 You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you claimed the refigured credit(s). Can i file my 2011 taxes in 2013 Include that amount as an additional tax for the year the refund or tax-free assistance was received. Can i file my 2011 taxes in 2013 Example. Can i file my 2011 taxes in 2013   You paid $7,000 tuition and fees in August 2013, and your child began college in September 2013. Can i file my 2011 taxes in 2013 You filed your 2013 tax return on February 17, 2014, and claimed an American opportunity credit of $2,500. Can i file my 2011 taxes in 2013 After you filed your return, you received a refund of $4,000. Can i file my 2011 taxes in 2013 You must refigure your 2013 American opportunity credit using $3,000 of qualified education expenses instead of $7,000. Can i file my 2011 taxes in 2013 The refigured credit is $2,250. Can i file my 2011 taxes in 2013 The increase to your tax liability is also $250. Can i file my 2011 taxes in 2013 Include the difference of $250 as additional tax on your 2014 tax return. Can i file my 2011 taxes in 2013 See the instructions for your 2014 income tax return to determine where to include this tax. Can i file my 2011 taxes in 2013 If you pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. Can i file my 2011 taxes in 2013 Amounts that do not reduce qualified education expenses. Can i file my 2011 taxes in 2013   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Can i file my 2011 taxes in 2013   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. Can i file my 2011 taxes in 2013 The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Can i file my 2011 taxes in 2013 The use of the money is not restricted. Can i file my 2011 taxes in 2013 Example 1. Can i file my 2011 taxes in 2013 Joan paid $3,000 for tuition and $5,000 for room and board at University X. Can i file my 2011 taxes in 2013 The university did not require her to pay any fees in addition to her tuition in order to enroll in or attend classes. Can i file my 2011 taxes in 2013 To help pay these costs, she was awarded a $2,000 scholarship and a $4,000 student loan. Can i file my 2011 taxes in 2013 The terms of the scholarship state that it can be used to pay any of Joan's college expenses. Can i file my 2011 taxes in 2013 University X applies the $2,000 scholarship against Joan's $8,000 total bill, and Joan pays the $6,000 balance of her bill from University X with a combination of her student loan and her savings. Can i file my 2011 taxes in 2013 Joan does not report any portion of the scholarship as income on her tax return. Can i file my 2011 taxes in 2013 In figuring the amount of either education credit (American opportunity or lifetime learning), Joan must reduce her qualified education expenses by the amount of the scholarship ($2,000) because she excluded the entire scholarship from her income. Can i file my 2011 taxes in 2013 The student loan is not tax-free educational assistance, so she does not need to reduce her qualified expenses by any part of the loan proceeds. Can i file my 2011 taxes in 2013 Joan is treated as having paid $1,000 in qualified education expenses ($3,000 tuition – $2,000 scholarship). Can i file my 2011 taxes in 2013 Example 2. Can i file my 2011 taxes in 2013 The facts are the same as in Example 1, except that Joan reports her entire scholarship as income on her tax return. Can i file my 2011 taxes in 2013 Because Joan reported the entire $2,000 scholarship in her income, she does not need to reduce her qualified education expenses. Can i file my 2011 taxes in 2013 Joan is treated as having paid $3,000 in qualified education expenses. Can i file my 2011 taxes in 2013 Coordination with Pell grants and other scholarships. Can i file my 2011 taxes in 2013   In some cases, you may be able to reduce your tax liability by including scholarships in income. Can i file my 2011 taxes in 2013 If you are claiming an education credit for a claimed dependent who received a scholarship, you may be able to reduce your tax liability if the student includes the scholarship in income. Can i file my 2011 taxes in 2013 The scholarship must be one that may (by its terms) be applied to expenses (such as room and board) other than qualified education expenses. Can i file my 2011 taxes in 2013 Example 1—No scholarship. Can i file my 2011 taxes in 2013 Bill Pass, age 28 and unmarried, enrolled full-time in 2013 as a first-year student at a local college to earn a degree in law enforcement. Can i file my 2011 taxes in 2013 This was his first year of postsecondary education. Can i file my 2011 taxes in 2013 During 2013, he paid $5,600 for his qualified education expenses and $4,400 for his room and board for the fall 2013 semester. Can i file my 2011 taxes in 2013 He and the college meet all the requirements for the American opportunity credit. Can i file my 2011 taxes in 2013 Bill's AGI and his MAGI, for purposes of figuring his credit, are $30,000. Can i file my 2011 taxes in 2013 Bill takes the standard deduction of $5,950 and personal exemption of $3,800, reducing his AGI to taxable income of $20,250. Can i file my 2011 taxes in 2013 His income tax liability, before credits, is $2,599 and Bill claims no credits other than the American opportunity credit. Can i file my 2011 taxes in 2013 He figures his American opportunity credit based on qualified education expenses of $4,000, which results in a credit of $2,500 and tax after credits of $99. Can i file my 2011 taxes in 2013 Example 2—Scholarship excluded from income. Can i file my 2011 taxes in 2013 The facts are the same as in Example 1—No scholarship, except that Bill was awarded a $5,600 scholarship. Can i file my 2011 taxes in 2013 Under the terms of his scholarship, it may be used to pay any educational expenses, including room and board. Can i file my 2011 taxes in 2013 If Bill excludes the scholarship from income, he will be deemed (for purposes of computing his education credit) to have used the scholarship to pay for tuition, required fees, and course materials. Can i file my 2011 taxes in 2013 His adjusted qualified education expenses will be zero and he will not have an education credit. Can i file my 2011 taxes in 2013 Therefore, Bill's tax after credits would be $2,599. Can i file my 2011 taxes in 2013 Example 3—Scholarship partially included in income. Can i file my 2011 taxes in 2013 The facts are the same as in Example 2—Scholarship excluded from income. Can i file my 2011 taxes in 2013 If, unlike Example 2, Bill includes $4,000 of the scholarship in income, he will be deemed to have used that amount to pay for room and board. Can i file my 2011 taxes in 2013 The remaining $1,600 of the $5,600 scholarship will reduce his qualified education expenses and his adjusted qualified education expenses will be $4,000. Can i file my 2011 taxes in 2013 Bill's AGI will increase to $34,000, his taxable income will increase to $24,250, and his tax before credits will increase to $3,199. Can i file my 2011 taxes in 2013 Based on his adjusted qualified education expenses of $4,000, Bill would be able to claim an American opportunity tax credit of $2,500 and his tax after credits would be $699. Can i file my 2011 taxes in 2013 Expenses That Do Not Qualify Qualified education expenses do not include amounts paid for: Insurance, Medical expenses (including student health fees), Room and board, Transportation, or Similar personal, living, or family expenses. Can i file my 2011 taxes in 2013 This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. Can i file my 2011 taxes in 2013 Sports, games, hobbies, and noncredit courses. Can i file my 2011 taxes in 2013   Qualified education expenses generally do not include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. Can i file my 2011 taxes in 2013 However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. Can i file my 2011 taxes in 2013 Comprehensive or bundled fees. Can i file my 2011 taxes in 2013   Some eligible educational institutions combine all of their fees for an academic period into one amount. Can i file my 2011 taxes in 2013 If you do not receive or do not have access to an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed earlier, contact the institution. Can i file my 2011 taxes in 2013 The institution is required to make this allocation and provide you with the amount you paid (or were billed) for qualified education expenses on Form 1098-T, Tuition Statement. Can i file my 2011 taxes in 2013 See Figuring the Credit , later, for more information about Form 1098-T. Can i file my 2011 taxes in 2013 Who Is an Eligible Student To claim the American opportunity credit, the student for whom you pay qualified education expenses must be an eligible student. Can i file my 2011 taxes in 2013 This is a student who meets all of the following requirements. Can i file my 2011 taxes in 2013 The student did not have expenses that were used to figure an American opportunity credit in any 4 earlier tax years. Can i file my 2011 taxes in 2013 This includes any tax year(s) in which you claimed the Hope Scholarship Credit for the same student. Can i file my 2011 taxes in 2013 The student had not completed the first 4 years of postsecondary education (generally, the freshman, sophomore, junior, and senior years of college) before 2013. Can i file my 2011 taxes in 2013 For at least one academic period beginning in 2013, the student was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. Can i file my 2011 taxes in 2013 The student has not been convicted of any federal or state felony for possessing or distributing a controlled substance as of the end of 2013. Can i file my 2011 taxes in 2013 These requirements are also shown in Figure 2-2, Who is an Eligible Student for the American Opportunity Credit , later. Can i file my 2011 taxes in 2013 Completion of first 4 years. Can i file my 2011 taxes in 2013   A student has completed the first 4 years of postsecondary education if the institution at which the student is enrolled awards the student 4 years of academic credit at that institution for coursework completed by the student before 2013. Can i file my 2011 taxes in 2013 This student generally would not be an eligible student for purposes of the American opportunity credit. Can i file my 2011 taxes in 2013 Exception. Can i file my 2011 taxes in 2013   Any academic credit awarded solely on the basis of the student's performance on proficiency examinations is disregarded in determining whether the student has completed 4 years of postsecondary education. Can i file my 2011 taxes in 2013 Enrolled at least half-time. Can i file my 2011 taxes in 2013   A student was enrolled at least half-time if the student was taking at least half the normal full-time work load for his or her course of study. Can i file my 2011 taxes in 2013   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. Can i file my 2011 taxes in 2013 However, the standard may not be lower than any of those established by the U. Can i file my 2011 taxes in 2013 S. Can i file my 2011 taxes in 2013 Department of Education under the Higher Education Act of 1965. Can i file my 2011 taxes in 2013 Please click here for the text description of the image. Can i file my 2011 taxes in 2013 Figure 2-2 Example 1. Can i file my 2011 taxes in 2013 Mack graduated from high school in June 2012. Can i file my 2011 taxes in 2013 In September, he enrolled in an undergraduate degree program at College U, and attended full-time for both the 2012 fall and 2013 spring semesters. Can i file my 2011 taxes in 2013 For the 2013 fall semester, Mack was enrolled less than half-time. Can i file my 2011 taxes in 2013 Because Mack was enrolled in an undergraduate degree program on at least a half-time basis for at least one academic period that began during 2012 and at least one academic period that began during 2013, he is an eligible student for tax years 2012 and 2013 (including the 2013 fall semester when he enrolled at College U on less than a half-time basis). Can i file my 2011 taxes in 2013 Example 2. Can i file my 2011 taxes in 2013 After taking classes at College V on a part-time basis for a few years, Shelly became a full-time student for the 2013 spring semester. Can i file my 2011 taxes in 2013 College V classified Shelly as a second-semester senior (fourth year) for the 2013 spring semester and as a first-semester graduate student (fifth year) for the 2013 fall semester. Can i file my 2011 taxes in 2013 Because College V did not classify Shelly as having completed the first 4 years of postsecondary education as of the beginning of 2013, Shelly is an eligible student for tax year 2013. Can i file my 2011 taxes in 2013 Therefore, the qualified education expenses paid for the 2013 spring semester and the 2013 fall semester are taken into account in calculating the American opportunity credit for 2013. Can i file my 2011 taxes in 2013 Example 3. Can i file my 2011 taxes in 2013 During the 2012 fall semester, Larry was a high school student who took classes on a half-time basis at College X. Can i file my 2011 taxes in 2013 Larry was not enrolled as part of a degree program at College X because College X only admits students to a degree program if they have a high school diploma or equivalent. Can i file my 2011 taxes in 2013 Because Larry was not enrolled in a degree program at College X during 2012, Larry was not an eligible student for tax year 2012. Can i file my 2011 taxes in 2013 Example 4. Can i file my 2011 taxes in 2013 The facts are the same as in Example 3. Can i file my 2011 taxes in 2013 During the 2013 spring semester, Larry again attended College X but not as part of a degree program. Can i file my 2011 taxes in 2013 Larry graduated from high school in June 2013. Can i file my 2011 taxes in 2013 For the 2013 fall semester, Larry enrolled as a full-time student in College X as part of a degree program, and College X awarded Larry credit for his prior coursework at College X. Can i file my 2011 taxes in 2013 Because Larry was enrolled in a degree program at College X for the 2013 fall term on at least a half-time basis, Larry is an eligible student for all of tax year 2013. Can i file my 2011 taxes in 2013 Therefore, the qualified education expenses paid for classes taken at College X during both the 2013 spring semester (during which Larry was not enrolled in a degree program) and the 2013 fall semester are taken into account in computing any American opportunity credit. Can i file my 2011 taxes in 2013 Example 5. Can i file my 2011 taxes in 2013 Dee graduated from high school in June 2012. Can i file my 2011 taxes in 2013 In January 2013, Dee enrolled in a 1-year postsecondary certificate program on a full-time basis to obtain a certificate as a travel agent. Can i file my 2011 taxes in 2013 Dee completed the program in December 2013, and was awarded a certificate. Can i file my 2011 taxes in 2013 In January 2014, she enrolled in a 1-year postsecondary certificate program on a full-time basis to obtain a certificate as a computer programmer. Can i file my 2011 taxes in 2013 Dee is an eligible student for both tax years 2013 and 2014 because she meets the degree requirement, the work load requirement, and the year of study requirement for those years. Can i file my 2011 taxes in 2013 Who Can Claim a Dependent's Expenses If there are qualified education expenses for your dependent during a tax year, either you or your dependent, but not both of you, can claim an American opportunity credit for your dependent's expenses for that year. Can i file my 2011 taxes in 2013 For you to claim an American opportunity credit for your dependent's expenses, you must also claim an exemption for your dependent. Can i file my 2011 taxes in 2013 You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c. Can i file my 2011 taxes in 2013 IF you. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 THEN only. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 claim an exemption on  your tax return for a  dependent who is an  eligible student you can claim the American opportunity credit based on that dependent's expenses. Can i file my 2011 taxes in 2013 The dependent cannot claim the credit. Can i file my 2011 taxes in 2013 do not claim an exemption on your tax return for a dependent who is an eligible student (even if entitled to the exemption) the dependent can claim the American opportunity credit. Can i file my 2011 taxes in 2013 You cannot claim the credit based on this dependent's expenses. Can i file my 2011 taxes in 2013 Expenses paid by dependent. Can i file my 2011 taxes in 2013   If you claim an exemption on your tax return for an eligible student who is your dependent, treat any expenses paid (or deemed paid) by your dependent as if you had paid them. Can i file my 2011 taxes in 2013 Include these expenses when figuring the amount of your American opportunity credit. Can i file my 2011 taxes in 2013    Qualified education expenses paid directly to an eligible educational institution for your dependent under a court-approved divorce decree are treated as paid by your dependent. Can i file my 2011 taxes in 2013 Expenses paid by you. Can i file my 2011 taxes in 2013   If you claim an exemption for a dependent who is an eligible student, only you can include any expenses you paid when figuring the amount of the American opportunity credit. Can i file my 2011 taxes in 2013 If neither you nor anyone else claims an exemption for the dependent, only the dependent can include any expenses you paid when figuring the American opportunity credit. Can i file my 2011 taxes in 2013 Expenses paid by others. Can i file my 2011 taxes in 2013   Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. Can i file my 2011 taxes in 2013 In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. Can i file my 2011 taxes in 2013 If you claim an exemption on your tax return for the student, you are considered to have paid the expenses. Can i file my 2011 taxes in 2013 Example. Can i file my 2011 taxes in 2013 In 2013, Ms. Can i file my 2011 taxes in 2013 Allen makes a payment directly to an eligible educational institution for her grandson Todd's qualified education expenses. Can i file my 2011 taxes in 2013 For purposes of claiming an American opportunity credit, Todd is treated as receiving the money from his grandmother and, in turn, paying his qualified education expenses himself. Can i file my 2011 taxes in 2013 Unless an exemption for Todd is claimed on someone else's 2013 tax return, only Todd can use the payment to claim an American opportunity credit. Can i file my 2011 taxes in 2013 If anyone, such as Todd's parents, claims an exemption for Todd on his or her 2013 tax return, whoever claims the exemption may be able to use the expenses to claim an American opportunity credit. Can i file my 2011 taxes in 2013 If anyone else claims an exemption for Todd, Todd cannot claim an American opportunity credit. Can i file my 2011 taxes in 2013 Tuition reduction. Can i file my 2011 taxes in 2013    When an eligible educational institution provides a reduction in tuition to an employee of the institution (or spouse or dependent child of an employee), the amount of the reduction may or may not be taxable. Can i file my 2011 taxes in 2013 If it is taxable, the employee is treated as receiving a payment of that amount and, in turn, paying it to the educational institution on behalf of the student. Can i file my 2011 taxes in 2013 For more information on tuition reductions, see Qualified Tuition Reduction in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Can i file my 2011 taxes in 2013 Figuring the Credit The amount of the American opportunity credit (per eligible student) is the sum of: 100% of the first $2,000 of qualified education expenses you paid for the eligible student, and 25% of the next $2,000 of qualified education expenses you paid for that student. Can i file my 2011 taxes in 2013 The maximum amount of American opportunity credit you can claim in 2013 is $2,500 multiplied by the number of eligible students. Can i file my 2011 taxes in 2013 You can claim the full $2,500 for each eligible student for whom you paid at least $4,000 of adjusted qualified education expenses. Can i file my 2011 taxes in 2013 However, the credit may be reduced based on your MAGI. Can i file my 2011 taxes in 2013 See Effect of the Amount of Your Income on the Amount of Your Credit , later. Can i file my 2011 taxes in 2013 Example. Can i file my 2011 taxes in 2013 Jack and Kay Ford are married and file a joint tax return. Can i file my 2011 taxes in 2013 For 2013, they claim an exemption for their dependent daughter on their tax return. Can i file my 2011 taxes in 2013 Their MAGI is $70,000. Can i file my 2011 taxes in 2013 Their daughter is in her junior (third) year of studies at the local university. Can i file my 2011 taxes in 2013 Jack and Kay paid qualified education expenses of $4,300 in 2013. Can i file my 2011 taxes in 2013 Jack and Kay, their daughter, and the local university meet all of the requirements for the American opportunity credit. Can i file my 2011 taxes in 2013 Jack and Kay can claim a $2,500 American opportunity credit in 2013. Can i file my 2011 taxes in 2013 This is 100% of the first $2,000 of qualified education expenses, plus 25% of the next $2,000. Can i file my 2011 taxes in 2013 Form 1098-T. Can i file my 2011 taxes in 2013   To help you figure your American opportunity credit, the student should receive Form 1098-T, Tuition Statement. Can i file my 2011 taxes in 2013 Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2014. Can i file my 2011 taxes in 2013 An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. Can i file my 2011 taxes in 2013 However, the amounts in boxes 1 and 2 of Form 1098-T might be different than what you paid. Can i file my 2011 taxes in 2013 When figuring the credit, use only the amounts you paid or are deemed to have paid in 2013 for qualified education expenses. Can i file my 2011 taxes in 2013   In addition, Form 1098-T should give other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether the student was enrolled at least half-time or was a graduate student. Can i file my 2011 taxes in 2013    The eligible educational institution may ask for a completed Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification, or similar statement to obtain the student's name, address, and taxpayer identification number. Can i file my 2011 taxes in 2013 Effect of the Amount of Your Income on the Amount of Your Credit The amount of your American opportunity credit is phased out (gradually reduced) if your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return). Can i file my 2011 taxes in 2013 You cannot claim an American opportunity credit if your MAGI is $90,000 or more ($180,000 or more if you file a joint return). Can i file my 2011 taxes in 2013 Modified adjusted gross income (MAGI). Can i file my 2011 taxes in 2013   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. Can i file my 2011 taxes in 2013 MAGI when using Form 1040A. Can i file my 2011 taxes in 2013   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. Can i file my 2011 taxes in 2013 MAGI when using Form 1040. Can i file my 2011 taxes in 2013   If you file Form 1040, your MAGI is the AGI on line 38 of that form, modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. Can i file my 2011 taxes in 2013 You can use Worksheet 2-1, next, to figure your MAGI. Can i file my 2011 taxes in 2013    Worksheet 2-1. Can i file my 2011 taxes in 2013 MAGI for the American Opportunity Credit 1. Can i file my 2011 taxes in 2013 Enter your adjusted gross income  (Form 1040, line 38)   1. Can i file my 2011 taxes in 2013   2. Can i file my 2011 taxes in 2013 Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. Can i file my 2011 taxes in 2013       3. Can i file my 2011 taxes in 2013 Enter your foreign housing deduction (Form 2555, line 50)   3. Can i file my 2011 taxes in 2013       4. Can i file my 2011 taxes in 2013 Enter the amount of income from Puerto Rico you are excluding   4. Can i file my 2011 taxes in 2013       5. Can i file my 2011 taxes in 2013 Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. Can i file my 2011 taxes in 2013       6. Can i file my 2011 taxes in 2013 Add the amounts on lines 2, 3, 4, and 5   6. Can i file my 2011 taxes in 2013   7. Can i file my 2011 taxes in 2013 Add the amounts on lines 1 and 6. Can i file my 2011 taxes in 2013  This is your modified adjusted  gross income. Can i file my 2011 taxes in 2013 Enter here and  on Form 8863, line 3   7. Can i file my 2011 taxes in 2013   Phaseout. Can i file my 2011 taxes in 2013   If your MAGI is within the range of incomes where the credit must be reduced, you will figure your reduced credit using lines 2-7, of Form 8863, Part I. Can i file my 2011 taxes in 2013 The same method is shown in the following example. Can i file my 2011 taxes in 2013 Example. Can i file my 2011 taxes in 2013 You are filing a joint return and your MAGI is $165,000. Can i file my 2011 taxes in 2013 In 2013, you paid $5,000 of qualified education expenses. Can i file my 2011 taxes in 2013 You figure a tentative American opportunity credit of $2,500 (100% of the first $2,000 of qualified education expenses, plus 25% of the next $2,000 of qualified education expenses). Can i file my 2011 taxes in 2013 Because your MAGI is within the range of incomes where the credit must be reduced, you must multiply your tentative credit ($2,500) by a fraction. Can i file my 2011 taxes in 2013 The numerator of the fraction is $180,000 (the upper limit for those filing a joint return) minus your MAGI. Can i file my 2011 taxes in 2013 The denominator is $20,000, the range of incomes for the phaseout ($160,000 to $180,000). Can i file my 2011 taxes in 2013 The result is the amount of your phased out (reduced) American opportunity credit ($1,875). Can i file my 2011 taxes in 2013      $2,500 × $180,000 − $165,000  $20,000 = $1,875   Refundable Part of Credit Forty percent of the American opportunity credit is refundable for most taxpayers. Can i file my 2011 taxes in 2013 However, if you were under age 24 at the end of 2013 and the conditions listed below apply to you, you cannot claim any part of the American opportunity credit as a refundable credit on your tax return. Can i file my 2011 taxes in 2013 Instead, your allowed credit (figured on Form 8863, Part II) will be used to reduce your tax as a nonrefundable credit only. Can i file my 2011 taxes in 2013 You do not qualify for a refund if items 1 (a, b, or c), 2, and 3 below apply to you. Can i file my 2011 taxes in 2013 You were: Under age 18 at the end of 2013, or Age 18 at the end of 2013 and your earned income (defined below) was less than one-half of your support (defined below), or Over age 18 and under age 24 at the end of 2013 and a full-time student (defined below) and your earned income (defined below) was less than one-half of your support (defined below). Can i file my 2011 taxes in 2013 At least one of your parents was alive at the end of 2013. Can i file my 2011 taxes in 2013 You are filing a return as single, head of household, qualifying widow(er), or married filing separately for 2013. Can i file my 2011 taxes in 2013 Earned income. Can i file my 2011 taxes in 2013   Earned income includes wages, salaries, professional fees, and other payments received for personal services actually performed. Can i file my 2011 taxes in 2013 Earned income includes the part of any scholarship or fellowship that represents payment for teaching, research, or other services performed by the student that are required as a condition for receiving the scholarship or fellowship. Can i file my 2011 taxes in 2013 Earned income does not include that part of the compensation for personal services rendered to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compensation for the personal services actually rendered. Can i file my 2011 taxes in 2013   If you are a sole proprietor or a partner in a trade or business in which both personal services and capital are material income-producing factors, earned income also includes a reasonable allowance for compensation for personal services, but not more than 30% of your share of the net profits from that trade or business (after subtracting the deduction for one-half of self-employment tax). Can i file my 2011 taxes in 2013 However, if capital is not an income-producing factor and your personal services produced the business income, the 30% limit does not apply. Can i file my 2011 taxes in 2013 Support. Can i file my 2011 taxes in 2013   Your support includes food, shelter, clothing, medical and dental care, education, and the like. Can i file my 2011 taxes in 2013 Generally, the amount of the item of support will be the amount of expenses incurred by the one furnishing such item. Can i file my 2011 taxes in 2013 If the item of support is in the form of property or lodging, measure the amount of such item of support by its fair market value. Can i file my 2011 taxes in 2013 However, a scholarship received by you is not considered support if you are a full-time student. Can i file my 2011 taxes in 2013 See Publication 501 for details. Can i file my 2011 taxes in 2013 Full-time student. Can i file my 2011 taxes in 2013   You are a full-time student for 2013 if during any part of any 5 calendar months during the year you were enrolled as a full-time student at an eligible educational institution (defined earlier), or took a full-time, on-farm training course given by such an institution or by a state, county, or local government agency. Can i file my 2011 taxes in 2013 Claiming the Credit You claim the American opportunity credit by completing Form 8863 and submitting it with your Form 1040 or 1040A. Can i file my 2011 taxes in 2013 Enter the nonrefundable part of the credit on Form 1040, line 49, or on Form 1040A, line 31. Can i file my 2011 taxes in 2013 Enter the refundable part of the credit on Form 1040, line 66, or on Form 1040A, line 40. Can i file my 2011 taxes in 2013 A filled-in Form 8863 is shown at the end of this publication. Can i file my 2011 taxes in 2013 Note. Can i file my 2011 taxes in 2013 In Appendix A. Can i file my 2011 taxes in 2013 at the end of this publication, there is an example illustrating the use of Form 8863 when both the American opportunity credit and the lifetime learning credit are claimed on the same tax return. Can i file my 2011 taxes in 2013 Prev  Up  Next   Home   More Online Publications
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Can i file my 2011 taxes in 2013 Internal Revenue Bulletin:  2013-7  February 11, 2013  Rev. Can i file my 2011 taxes in 2013 Proc. Can i file my 2011 taxes in 2013 2013-16 Table of Contents SECTION 1. Can i file my 2011 taxes in 2013 PURPOSE SECTION 2. Can i file my 2011 taxes in 2013 BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE SECTION 3. Can i file my 2011 taxes in 2013 BACKGROUND—APPLICABLE PROVISIONS OF LAW SECTION 4. Can i file my 2011 taxes in 2013 FEDERAL INCOME TAX TREATMENT SECTION 5. Can i file my 2011 taxes in 2013 INFORMATION-REPORTING OBLIGATIONS SECTION 6. Can i file my 2011 taxes in 2013 HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA SECTION 7. Can i file my 2011 taxes in 2013 PENALTY RELIEF FOR 2012 SECTION 8. Can i file my 2011 taxes in 2013 SCOPE AND EFFECTIVE DATE SECTION 9. Can i file my 2011 taxes in 2013 DRAFTING INFORMATION SECTION 1. Can i file my 2011 taxes in 2013 PURPOSE This revenue procedure provides guidance to mortgage loan holders, loan servicers, and borrowers who are participating in the Department of the Treasury’s (Treasury) and Department of Housing and Urban Development’s (HUD) Home Affordable Modification Program® (HAMP®). Can i file my 2011 taxes in 2013 Under HAMP, a borrower may be eligible for principal reduction of the outstanding balance of a qualifying mortgage pursuant to the program’s Principal Reduction AlternativeSM (PRA). Can i file my 2011 taxes in 2013 In appropriate cases, HAMP has been offering the PRA as part of a HAMP loan modification since the last quarter of 2010. Can i file my 2011 taxes in 2013 Current plans call for HAMP to continue accepting new borrowers through the end of 2013. Can i file my 2011 taxes in 2013 The Internal Revenue Service (Service) is providing this guidance to address the tax consequences for borrowers (HAMP-PRA borrowers) who are participating in the PRA and the reporting obligations for participating mortgage loan holders and servicers. Can i file my 2011 taxes in 2013 SECTION 2. Can i file my 2011 taxes in 2013 BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE . Can i file my 2011 taxes in 2013 01 To help distressed borrowers lower their monthly mortgage payments, Treasury and HUD established HAMP for mortgage loans that are not owned or guaranteed by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Can i file my 2011 taxes in 2013 A description of the program can be found at www. Can i file my 2011 taxes in 2013 makinghomeaffordable. Can i file my 2011 taxes in 2013 gov. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 02 Under HAMP, a participating loan servicer, acting on behalf of the mortgage loan holder, must consider a sequence of modification steps for each eligible borrower’s mortgage loan until the borrower’s monthly payment is reduced to a monthly payment amount determined under the HAMP guidelines. Can i file my 2011 taxes in 2013 These steps include a reduction in the mortgage loan’s interest rate, an extension of the mortgage loan’s term, and a reduction in the mortgage loan’s principal balance. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 03 In some cases, the unpaid principal balance of the modified mortgage loan is divided into (1) an amount that bears stated interest and that is used to calculate the borrower’s new monthly mortgage payment (the “Non-forbearance Portion”), and (2) a forbearance amount, which does not bear stated interest and on which periodic payments of stated principal are not required. Can i file my 2011 taxes in 2013 The stated principal of the forbearance amount is due upon the earliest of the borrower’s transfer of the property, payoff of the balance on the Non-forbearance Portion of the mortgage loan, or maturity of the mortgage loan. Can i file my 2011 taxes in 2013 However, as noted in section 2. Can i file my 2011 taxes in 2013 06 of this revenue procedure, a HAMP-PRA borrower sometimes may not have to pay all or a portion of the forbearance amount. Can i file my 2011 taxes in 2013 (The forbearance amount associated with a HAMP-PRA principal reduction is called the “PRA Forbearance Amount. Can i file my 2011 taxes in 2013 ”) . Can i file my 2011 taxes in 2013 04 If a mortgage loan is being considered for a HAMP modification and the amount owed on the mortgage loan is greater than 115 percent of the value of the property, then the servicer must consider whether principal reduction under PRA should be used as part of the HAMP modification. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 05 The first step toward a HAMP modification is a trial period plan, in which the borrower’s monthly mortgage payment is set at a monthly payment amount determined under the HAMP guidelines. Can i file my 2011 taxes in 2013 The trial period plan effective date is the due date for the first of the reduced payments that are to be made under the trial period plan. Can i file my 2011 taxes in 2013 (It is the first day of either the first or the second month after the servicer transmits the trial period notice to the borrower. Can i file my 2011 taxes in 2013 ) In general, the trial period is three months, and, during this period, the borrower must satisfy certain conditions before the changes to the terms of the mortgage loan become permanent (the “Trial Period Conditions”). Can i file my 2011 taxes in 2013 Specifically, depending on the borrower’s trial period payment history, the borrower’s compliance with HAMP and servicer guidelines, and his or her satisfaction of all other Trial Period Conditions, the borrower will be offered a permanent modification of the terms of the mortgage loan, including monthly mortgage payments that are lower than those under the old mortgage loan. Can i file my 2011 taxes in 2013 Until the effective date of a permanent modification, the terms of the existing mortgage loan continue to apply. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 06 After the mortgage loan is permanently modified under HAMP, if the modified mortgage loan is in good standing on the first, second, or third annual anniversary of the trial period plan effective date (the “Three-year Period”), the servicer must reduce the unpaid principal balance of the mortgage loan on the respective anniversary date by one-third of the initial PRA Forbearance Amount. Can i file my 2011 taxes in 2013 (The servicer allocates the entire reduction to the remaining PRA Forbearance Amount. Can i file my 2011 taxes in 2013 ) In general, if a HAMP-PRA borrower’s mortgage loan is in good standing and if the HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan prior to the reduction of the entire PRA Forbearance Amount, the servicer must reduce the remaining outstanding principal balance of the mortgage loan by the remaining PRA Forbearance Amount. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 07 In connection with every HAMP loan modification, the HAMP program administrator (acting on behalf of the federal government) provides incentives to the borrower, the servicer, and the investor (that is, the holder of the mortgage loan). Can i file my 2011 taxes in 2013 If a HAMP loan modification includes a PRA principal reduction, the HAMP program administrator makes additional incentive payments to the investor. Can i file my 2011 taxes in 2013 These additional incentives are called “PRA Investor Incentive Payments” and are generally spread over three years. Can i file my 2011 taxes in 2013 The size of the PRA Investor Incentive Payments depends on the amount of principal reduced, the loan-to-value ratio at the time of the HAMP modification, and the loan’s payment history before the modification. Can i file my 2011 taxes in 2013 The PRA Investor Incentive Payments range from 18 to 63 percent of the principal amounts reduced. Can i file my 2011 taxes in 2013 For purposes of this revenue procedure, the excess of the initial PRA Forbearance Amount of a mortgage loan over the aggregate PRA Investor Incentive Payments scheduled to be paid with respect to that loan is called the “PRA Adjusted Forbearance Amount. Can i file my 2011 taxes in 2013 ” . Can i file my 2011 taxes in 2013 08 A PRA Investor Incentive Payment is earned by the investor on each date on which the servicer reduces the unpaid principal balance of the mortgage loan by a portion of the PRA Forbearance Amount (generally, on the first three annual anniversaries of the trial period plan effective date). Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 09 If a HAMP-PRA borrower’s early payment in full of the Non-forbearance Portion of the mortgage loan accelerates the reduction of the remaining PRA Forbearance Amount (described above in section 2. Can i file my 2011 taxes in 2013 06 of this revenue procedure), the remaining PRA Investor Incentive Payments from the HAMP program administrator are also accelerated. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 10 If, prior to completion of the Three-year Period, a mortgage loan ceases to be in good standing because of the HAMP-PRA borrower’s payment history, then the remaining PRA Forbearance Amount is not further reduced and is due when the HAMP-PRA borrower transfers the property, the HAMP-PRA borrower refinances, or otherwise pays off the Non-forbearance Portion of the mortgage loan, or the mortgage loan matures. Can i file my 2011 taxes in 2013 SECTION 3. Can i file my 2011 taxes in 2013 BACKGROUND—APPLICABLE PROVISIONS OF LAW . Can i file my 2011 taxes in 2013 01 Under § 61 of the Internal Revenue Code, except as otherwise provided in subtitle A, gross income means all income from whatever source derived, including income from discharge of indebtedness. Can i file my 2011 taxes in 2013 See § 61(a)(12). Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 02 Under § 1. Can i file my 2011 taxes in 2013 1001-3 of the Income Tax Regulations, if a debt instrument undergoes a significant modification, then the modification results in an exchange of the original debt instrument for the modified debt instrument. Can i file my 2011 taxes in 2013 In general, an agreement to change a term of a debt instrument is a modification at the time the borrower and holder enter into the agreement, even if the change in term is not immediately effective. Can i file my 2011 taxes in 2013 However, if the change is conditioned on reasonable closing conditions, a modification occurs on the closing date of the agreement. Can i file my 2011 taxes in 2013 See § 1. Can i file my 2011 taxes in 2013 1001-3(c)(6). Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 03 Under § 108(e)(10), in the case of a debt-for-debt exchange (including a deemed exchange under § 1. Can i file my 2011 taxes in 2013 1001-3), the borrower is treated as having satisfied the original debt instrument with an amount of money equal to the issue price of the new debt instrument. Can i file my 2011 taxes in 2013 If the amount of debt satisfied in this manner exceeds that issue price, the borrower realizes discharge of indebtedness income on the exchange. Can i file my 2011 taxes in 2013 See also § 1. Can i file my 2011 taxes in 2013 61-12(c). Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 04 The issue price of a non-publicly traded debt instrument issued for non-publicly traded property generally reflects the amount of principal that the borrower is required to pay to the holder of the instrument. Can i file my 2011 taxes in 2013 If a borrower has the ability to avoid paying certain amounts (including principal) without violating the terms of the instrument, the payment schedule for the instrument is generally determined based on an assumption that the borrower will avoid any requirement to make those payments. Can i file my 2011 taxes in 2013 See, e. Can i file my 2011 taxes in 2013 g. Can i file my 2011 taxes in 2013 , §§ 1. Can i file my 2011 taxes in 2013 1272-1(c)(5) and 1. Can i file my 2011 taxes in 2013 1274-2(d). Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 05 Under § 108(a), gross income does not include any amount that but for § 108(a) would be includible in gross income by reason of the discharge (in whole or in part) of a taxpayer’s indebtedness if (1) the indebtedness discharged is qualified principal residence indebtedness that is discharged before January 1, 2014, or (2) the discharge occurs when the taxpayer is insolvent. Can i file my 2011 taxes in 2013 Section 108(a)(1)(E) and 108(a)(1)(B). Can i file my 2011 taxes in 2013 (Although § 108 contains other exclusions as well, this revenue procedure focuses on these two exclusions because they are the most likely to apply to the greatest number of HAMP-PRA borrowers. Can i file my 2011 taxes in 2013 ) . Can i file my 2011 taxes in 2013 06 Under §§ 108(h) and 163(h)(3)(B), qualified principal residence indebtedness is any indebtedness that is incurred by a borrower to buy, build, or substantially improve the borrower’s principal residence and is secured by that residence. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 07 Qualified principal residence indebtedness also includes a loan secured by the borrower’s principal residence that refinances qualified principal residence indebtedness, but only to the extent of the amount of the refinanced indebtedness. Can i file my 2011 taxes in 2013 See §§ 108(h) and 163(h)(3)(B)(i). Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 08 The maximum amount of discharged indebtedness that a borrower may exclude from gross income under the qualified principal residence indebtedness exclusion is $2,000,000 ($1,000,000 for a married individual filing a separate return). Can i file my 2011 taxes in 2013 Under § 108(h)(4), if only part of the discharged indebtedness is qualified principal residence indebtedness, then the exclusion applies only to the amount of the discharged indebtedness that exceeds the amount of the loan (determined immediately before the discharge) that is not qualified principal residence indebtedness. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 09 Under § 108(a)(3), the insolvency exclusion applies to the lesser of the amount of the debt discharged or the amount by which the taxpayer is insolvent immediately before the discharge. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 10 Section 108(d)(3) provides that, for purposes of the insolvency exclusion, a taxpayer is insolvent to the extent that the taxpayer’s total liabilities exceed the fair market value of all of the taxpayer’s assets immediately before the discharge of indebtedness. Can i file my 2011 taxes in 2013 Under § 108(a)(2)(C), the qualified principal residence indebtedness exclusion takes precedence over the insolvency exclusion when both exclusions apply to discharged indebtedness, unless the taxpayer elects to apply the insolvency exclusion. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 11 If an amount is excluded from gross income as a discharge of qualified principal residence indebtedness, the taxpayer must reduce the basis of the taxpayer’s principal residence. Can i file my 2011 taxes in 2013 See § 108(h)(1). Can i file my 2011 taxes in 2013 If a discharged amount is excluded from gross income because the taxpayer was insolvent when the discharge occurred, the taxpayer must reduce certain tax attributes (possibly including basis). Can i file my 2011 taxes in 2013 See § 108(b). Can i file my 2011 taxes in 2013 For further discussion of income from the discharge of indebtedness, the qualified principal residence indebtedness exclusion, the insolvency exclusion, and other exclusions from gross income that may apply, see Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 12 Taxpayers who exclude any discharged amounts from gross income report both the exclusion and the resulting reduction in basis or other tax attributes on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Can i file my 2011 taxes in 2013 See Form 982 instructions and Publication 4681. Can i file my 2011 taxes in 2013 This form is to be filed with the tax return for the taxable year in which the amount is discharged but is excluded from gross income. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 13 Governmental payments made to or on behalf of individuals or other persons are included within the broad definition of gross income under § 61 unless an exception applies. Can i file my 2011 taxes in 2013 See Notice 2003-18, 2003-1 C. Can i file my 2011 taxes in 2013 B. Can i file my 2011 taxes in 2013 699, and Rev. Can i file my 2011 taxes in 2013 Rul. Can i file my 2011 taxes in 2013 79-356, 1979-2 C. Can i file my 2011 taxes in 2013 B. Can i file my 2011 taxes in 2013 28. Can i file my 2011 taxes in 2013 However, if disbursements are made by a governmental unit to individuals in the interest of the general welfare (that is, are generally based on individual or family need) and the disbursements do not represent compensation for services, then the amounts disbursed are excluded from the income of the recipient (general welfare exclusion). Can i file my 2011 taxes in 2013 See Rev. Can i file my 2011 taxes in 2013 Rul. Can i file my 2011 taxes in 2013 2005-46, 2005-2 C. Can i file my 2011 taxes in 2013 B. Can i file my 2011 taxes in 2013 120, and Rev. Can i file my 2011 taxes in 2013 Rul. Can i file my 2011 taxes in 2013 75-246, 1975-1 C. Can i file my 2011 taxes in 2013 B. Can i file my 2011 taxes in 2013 24. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 14 Under § 451 and § 1. Can i file my 2011 taxes in 2013 451-1(a), a taxpayer that uses the cash receipts and disbursements method of accounting includes income in gross income when the taxpayer actually or constructively receives the income. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 15 Section 6041 requires every person engaged in a trade or business (including the United States and its agencies) to (1) file an information return (Form 1099-MISC, Miscellaneous Income, is used for this purpose) for each calendar year in which the person makes, in the course of its trade or business, payments to another person of fixed or determinable income aggregating $600 or more, and (2) furnish a copy of the information return to that other person. Can i file my 2011 taxes in 2013 See § 6041(a) and (d) and § 1. Can i file my 2011 taxes in 2013 6041-1(a)(1) and (b). Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 16 Section 6050P requires applicable entities (including the United States and its agencies, financial entities, and any organization a significant trade or business of which is the lending of money) to (1) file an information return (Form 1099-C, Cancellation of Debt, is used for this purpose) for each calendar year in which it discharges indebtedness of another person of $600 or more, and (2) furnish a copy of the information return to that other person. Can i file my 2011 taxes in 2013 See § 6050P(a)-(c) and §§ 1. Can i file my 2011 taxes in 2013 6050P-1(a) and 1. Can i file my 2011 taxes in 2013 6050P-2(a) and (d). Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 17 Section 6721 imposes penalties with respect to information returns required to be filed with the Service. Can i file my 2011 taxes in 2013 These penalties apply in the case of a failure to timely file an information return, a failure to include all required information on the return, or the inclusion of incorrect information on the return. Can i file my 2011 taxes in 2013 Section 6724(d)(1) includes Forms 1099-MISC and 1099-C in the term “information return. Can i file my 2011 taxes in 2013 ” . Can i file my 2011 taxes in 2013 18 Section 6722 imposes penalties with respect to payee statements required to be furnished to payees. Can i file my 2011 taxes in 2013 These penalties apply in the case of a failure to timely furnish a payee statement, a failure to include all required information on the statement, or the inclusion of incorrect information on the payee statement. Can i file my 2011 taxes in 2013 Section 6724(d)(2) includes in the term “payee statement” copies of Forms 1099-MISC and 1099-C that are required to be furnished to taxpayers. Can i file my 2011 taxes in 2013 SECTION 4. Can i file my 2011 taxes in 2013 FEDERAL INCOME TAX TREATMENT . Can i file my 2011 taxes in 2013 01 Because a HAMP modification with a PRA principal reduction is a significant modification, it results in a deemed debt-for-debt exchange in which the HAMP-PRA borrower satisfies the old mortgage loan by issuing a new one. Can i file my 2011 taxes in 2013 See § 1. Can i file my 2011 taxes in 2013 1001-3. Can i file my 2011 taxes in 2013 At the time of the modification, therefore, under § 108 and this revenue procedure, the HAMP-PRA borrower realizes discharge of indebtedness income equal to any excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new (post-modification) mortgage loan. Can i file my 2011 taxes in 2013 See also § 61(a)(12) and § 1. Can i file my 2011 taxes in 2013 61-12(c). Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 02 A HAMP-PRA borrower has the ability to avoid payment of the PRA Adjusted Forbearance Amount. Can i file my 2011 taxes in 2013 Because the HAMP-PRA borrower has this ability, that amount should not be taken into account in determining the issue price of the new mortgage loan. Can i file my 2011 taxes in 2013 Because the issue price of the new mortgage loan does not include the PRA Adjusted Forbearance Amount, the PRA Adjusted Forbearance Amount contributes to the excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new mortgage loan. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 03 On the other hand, the investor has not given up its right to receive the remainder of the PRA Forbearance Amount, because the HAMP program administrator is expected to make those payments on the HAMP-PRA borrower’s behalf by making the PRA Investor Incentive Payments. Can i file my 2011 taxes in 2013 Because the remainder of the PRA Forbearance Amount is payable in this manner, that remainder is included in the issue price of the new mortgage loan. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 04 The Trial Period Conditions are reasonable closing conditions that must be satisfied before the changes to the terms of the mortgage loan become permanent. Can i file my 2011 taxes in 2013 Therefore, for purposes of § 1. Can i file my 2011 taxes in 2013 1001-3, the date of the modification is the date of the permanent modification. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 05 Unless an exclusion applies, the HAMP-PRA borrower includes in gross income the discharge of indebtedness income described in section 4. Can i file my 2011 taxes in 2013 01 of this revenue procedure for the taxable year in which the permanent modification occurs. Can i file my 2011 taxes in 2013 Under certain conditions, however, section 6 of this revenue procedure permits a borrower to report the discharge of indebtedness under HAMP-PRA over the Three-year Period. Can i file my 2011 taxes in 2013 The qualified principal residence indebtedness exclusion under § 108(a)(1)(E) and the insolvency exclusion under § 108(a)(1)(B) are two exclusions that may apply to the discharge. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 06 The PRA Investor Incentive Payment is treated as a payment on the mortgage loan by the HAMP program administrator on behalf of the HAMP-PRA borrower. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 07 To the extent that the HAMP-PRA borrower uses the property as the HAMP-PRA borrower’s principal residence or the property is occupied by the HAMP-PRA borrower’s legal dependent, parent, or grandparent without rent being charged or collected, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the PRA Investor Incentive Payments that the HAMP program administrator makes to the investor in the mortgage loan. Can i file my 2011 taxes in 2013 This is consistent with Rev. Can i file my 2011 taxes in 2013 Rul. Can i file my 2011 taxes in 2013 2009-19, 2009-28 I. Can i file my 2011 taxes in 2013 R. Can i file my 2011 taxes in 2013 B. Can i file my 2011 taxes in 2013 111, which addressed the treatment of Pay-for-Performance Success Payments. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 08 To the extent that the HAMP-PRA borrower uses the property as a rental property or holds the property vacant and available for rent, the HAMP-PRA borrower includes PRA Investor Incentive Payments in gross income. Can i file my 2011 taxes in 2013 If the HAMP-PRA borrower uses the cash receipts and disbursements method of accounting, then the HAMP-PRA borrower includes a PRA Investor Incentive Payment in gross income in the taxable year in which it is applied as a payment on the HAMP-PRA borrower’s mortgage loan. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 09 As described in section 2. Can i file my 2011 taxes in 2013 09 of this revenue procedure, if a HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan while the loan is in good standing and prior to completion of the Three-year Period, that payment accelerates both the reduction in the remaining PRA Forbearance Amount and the PRA Investor Incentive Payments from the HAMP program administrator. Can i file my 2011 taxes in 2013 To the extent that the HAMP-PRA borrower is described in section 4. Can i file my 2011 taxes in 2013 07 of this revenue procedure, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the accelerated PRA Investor Incentive Payments. Can i file my 2011 taxes in 2013 To the extent that the HAMP-PRA borrower is described in section 4. Can i file my 2011 taxes in 2013 08 of this revenue procedure, the HAMP-PRA borrower includes in income in the year of the acceleration the remaining amount of the PRA Investor Incentive Payment. Can i file my 2011 taxes in 2013 SECTION 5. Can i file my 2011 taxes in 2013 INFORMATION-REPORTING OBLIGATIONS . Can i file my 2011 taxes in 2013 01 Under § 6050P, the investor is required to file a Form 1099-C with respect to a borrower who realizes discharge of indebtedness of $600 or more. Can i file my 2011 taxes in 2013 A copy of this form is required to be furnished to the borrower. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 02 As stated in sections 4. Can i file my 2011 taxes in 2013 01 and 4. Can i file my 2011 taxes in 2013 04 of this revenue procedure, the HAMP-PRA discharge of indebtedness is realized at the time of the permanent modification of the mortgage loan. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 03 An investor is an applicable entity that is required under § 1. Can i file my 2011 taxes in 2013 6050P-1 and this revenue procedure to issue a Form 1099-C for discharge of indebtedness. Can i file my 2011 taxes in 2013 Under § 1. Can i file my 2011 taxes in 2013 6050P-1(b)(2)(F), the permanent modification of a mortgage loan is an identifiable event. Can i file my 2011 taxes in 2013 Identifiable events determine when Forms 1099-C have to be issued. Can i file my 2011 taxes in 2013 Thus, the Form 1099-C is issued for the calendar year in which the permanent mortgage loan modification occurs. Can i file my 2011 taxes in 2013 This rule under § 1. Can i file my 2011 taxes in 2013 6050P-1(b)(2)(F) applies even if, under section 6 of this revenue procedure, the HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the times when the unpaid principal balance of the new mortgage loan is reduced. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 04 The investor (or the loan servicer acting on behalf of the investor) reports the full amount of the discharge on the Form 1099-C regardless of whether some or all of the amount is excludible from income under the qualified principal residence indebtedness exclusion, the insolvency exclusion, or any other exclusion that may apply. Can i file my 2011 taxes in 2013 That discharged amount will generally be the PRA Adjusted Forbearance Amount (which does not include the amounts expected to be satisfied by PRA Investor Incentive Payments). Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 05 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Can i file my 2011 taxes in 2013 07 of this revenue procedure, the PRA Investor Incentive Payments are excluded from the gross income of the HAMP-PRA borrower, and thus they are not fixed or determinable income to the HAMP-PRA borrower. Can i file my 2011 taxes in 2013 Under § 6041, these payments are not subject to information reporting. Can i file my 2011 taxes in 2013 See Notice 2011-14, 2011-11 I. Can i file my 2011 taxes in 2013 R. Can i file my 2011 taxes in 2013 B. Can i file my 2011 taxes in 2013 544, 546. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 06 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Can i file my 2011 taxes in 2013 08 of this revenue procedure, the PRA Investor Incentive Payments are includible in gross income as fixed or determinable income in the taxable year required by the HAMP-PRA borrower’s method of accounting. Can i file my 2011 taxes in 2013 The payment is subject to the information reporting requirements of § 6041, as described in section 3. Can i file my 2011 taxes in 2013 15 of this revenue procedure. Can i file my 2011 taxes in 2013 Accordingly, the HAMP program administrator is required to issue a Form 1099-MISC reporting the PRA Investor Incentive Payment. Can i file my 2011 taxes in 2013 SECTION 6. Can i file my 2011 taxes in 2013 HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA . Can i file my 2011 taxes in 2013 01 In general. Can i file my 2011 taxes in 2013 The HAMP-PRA program began in the last quarter of 2010, and since that time there has been uncertainty about whether the amount of the discharge of indebtedness should be reported in the year of the permanent modification or over the Three-year Period (when the unpaid principal balance on the new mortgage loan is reduced). Can i file my 2011 taxes in 2013 As a result, some HAMP-PRA borrowers have been reporting the discharge of indebtedness under HAMP-PRA over the Three-year Period. Can i file my 2011 taxes in 2013 Given the temporary nature of the program and the issuance of this guidance after participation in the program has begun, in the interests of equitable and sound tax administration, HAMP-PRA borrowers may report discharges of indebtedness under HAMP-PRA under the rules in this section 6. Can i file my 2011 taxes in 2013 A HAMP-PRA borrower may choose to report discharges of indebtedness under HAMP-PRA pursuant to the rules in this section 6 only if the borrower applies the same borrower option under section 6. Can i file my 2011 taxes in 2013 02 of this revenue procedure consistently to the taxable year of the permanent modification and to all subsequent taxable years. Can i file my 2011 taxes in 2013 Thus, a HAMP-PRA borrower may not choose a borrower option under section 6. Can i file my 2011 taxes in 2013 02 of this revenue procedure if a statute of limitations has expired for any of the taxable years that are necessary for consistent application of that option. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 02 HAMP-PRA borrower options. Can i file my 2011 taxes in 2013 A HAMP-PRA borrower may treat the HAMP-PRA discharge as being realized in either of the following ways— (1) One hundred percent of the PRA Adjusted Forbearance Amount at the time of the permanent modification; or (2) One third of the PRA Adjusted Forbearance Amount on each of the first three annual anniversaries of the trial period plan effective date (described in section 2. Can i file my 2011 taxes in 2013 06 of this revenue procedure), when, as required by the terms of the new mortgage loan, the servicer reduces the unpaid principal balance of the new mortgage loan. Can i file my 2011 taxes in 2013 If some or all of the reduction in the unpaid principal balance is accelerated (as described in section 2. Can i file my 2011 taxes in 2013 06 of this revenue procedure) because the HAMP-PRA borrower prepays the Non-forbearance Portion of the mortgage loan, then the HAMP-PRA discharge represented by the amount of the reduction that was accelerated is treated as being realized at the time of the accelerated reduction. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 03 HAMP-PRA borrowers who choose to realize the HAMP-PRA discharge at the time of the permanent modification. Can i file my 2011 taxes in 2013 (1) If a HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the time of the permanent modification, then for the taxable year in which the permanent modification occurs, the HAMP-PRA borrower reports on Form 982 the amount, if any, of the discharge that is excluded from gross income and includes in gross income any remaining discharge. Can i file my 2011 taxes in 2013 (2) If a HAMP-PRA borrower’s mortgage loan was permanently modified under HAMP in 2010 or 2011, and if the borrower was reporting the discharge of indebtedness using the method described in section 6. Can i file my 2011 taxes in 2013 02(2) of this revenue procedure, then the borrower may change to reporting the discharge of indebtedness using the method described in section 6. Can i file my 2011 taxes in 2013 02(1) of this revenue procedure by filing a 2012 Form 982 with the borrower’s timely filed (with extensions) 2012 income tax return. Can i file my 2011 taxes in 2013 This section 6. Can i file my 2011 taxes in 2013 03(2) applies only if the change to reporting the discharge using the method described in section 6. Can i file my 2011 taxes in 2013 02(1) of this revenue procedure does not change the borrower’s federal income tax liability (including any change in federal income tax liability due to a change in basis or tax attributes (under § 108(h)(1) or § 108(b))) for any taxable year prior to the borrower’s 2012 taxable year. Can i file my 2011 taxes in 2013 To make this change, the borrower must— (i) Compute the amount of discharge of indebtedness that would be included in income under § 61(a)(12) or excluded from gross income under § 108, basing the computation of the discharge on the facts as of the year of the permanent modification; and (ii) Report on a 2012 Form 982 the reduction in basis or tax attributes (under § 108(h)(1) or § 108(b)) due to the permanent modification that the borrower would have reported on the Form 982 for the taxable year of the permanent modification, minus any reductions due to the permanent modification that the borrower actually reported on Forms 982 for taxable years prior to 2012. Can i file my 2011 taxes in 2013 (3) Example. Can i file my 2011 taxes in 2013 The following example illustrates the application of section 6. Can i file my 2011 taxes in 2013 03(2) of this revenue procedure. Can i file my 2011 taxes in 2013 In 2010, B’s basis in B’s principal residence was $330,000. Can i file my 2011 taxes in 2013 In 2010, B’s mortgage loan on the principal residence is permanently modified under HAMP-PRA. Can i file my 2011 taxes in 2013 B realized $30,000 of cancellation of indebtedness from the permanent modification, all of which qualifies for the exclusion from income for qualified principal residence indebtedness under § 108(a)(1)(E). Can i file my 2011 taxes in 2013 The trial period plan effective date also fell in 2010. Can i file my 2011 taxes in 2013 B’s federal income tax return for 2010 was consistent with B’s reporting this discharge of indebtedness using the method described in section 6. Can i file my 2011 taxes in 2013 02(2) of this revenue procedure. Can i file my 2011 taxes in 2013 That is, B’s 2010 return did not include income from discharge of indebtedness under HAMP-PRA, nor did the return contain a Form 982 reporting exclusion of any such discharge of indebtedness. Can i file my 2011 taxes in 2013 The next year, B reported on line 10(b) of the 2011 Form 982 that B filed with B’s 2011 federal income tax return a $10,000 reduction in basis in the principal residence. Can i file my 2011 taxes in 2013 For 2012, B chooses to change to reporting the discharge of indebtedness using the method described in section 6. Can i file my 2011 taxes in 2013 02(1) of this revenue procedure. Can i file my 2011 taxes in 2013 Thus, B files a 2012 Form 982 with B’s timely filed (including extensions) 2012 federal income tax return, and on line 10(b) of that form, B reports a $20,000 basis reduction in the principal residence ($30,000 basis reduction that B would have excluded from income in 2010 using the method described in section 6. Can i file my 2011 taxes in 2013 02(1) of this revenue procedure, minus the $10,000 basis reduction that B reported on B’s 2011 Form 982). Can i file my 2011 taxes in 2013 (4) If a HAMP-PRA borrower reports the entire HAMP-PRA discharge using the method described in section 6. Can i file my 2011 taxes in 2013 02(1) of this revenue procedure, and if that HAMP-PRA borrower’s mortgage loan ceases to be in good standing during the Three-year Period as described in section 2. Can i file my 2011 taxes in 2013 10 of this revenue procedure, then some or all of the anticipated reductions in the PRA Adjusted Forbearance Amount will not take place. Can i file my 2011 taxes in 2013 Because the amount of these anticipated reductions was not included in determining the issue price of the new mortgage loan that, pursuant to § 1. Can i file my 2011 taxes in 2013 1001-3, the HAMP-PRA borrower is deemed to issue in satisfaction of the old mortgage loan, the issue price of the new mortgage loan was understated. Can i file my 2011 taxes in 2013 Under these circumstances, the discharge of indebtedness income determined as of the date of the permanent modification will have been overstated. Can i file my 2011 taxes in 2013 (5) The Service will not challenge a HAMP-PRA borrower who is described in section 6. Can i file my 2011 taxes in 2013 03(4) of this revenue procedure and who takes the following corrective measures: (i) If a HAMP-PRA borrower included any of the discharge of indebtedness in gross income, the HAMP-PRA borrower may file an amended return that does not include the amount of the discharge of indebtedness that was previously reported as gross income but that, because of the HAMP-PRA borrower’s failure to keep the new mortgage loan in good standing, was not ultimately discharged. Can i file my 2011 taxes in 2013 The amended return should be for the taxable year in which the income was included (that is, the year of the permanent modification), provided the applicable statute of limitations remains open for that taxable year. Can i file my 2011 taxes in 2013 (ii) If the HAMP-PRA borrower did not include any of the discharge of indebtedness in gross income (that is, if the HAMP-PRA borrower excluded all of it), the HAMP-PRA borrower may file a new Form 982 that the Service will treat as superseding the earlier Form 982. Can i file my 2011 taxes in 2013 The new Form 982 will reflect the revised reduction in basis or in tax attributes (under § 108(h)(1) or § 108(b)). Can i file my 2011 taxes in 2013 The new Form 982 should be the Form 982 for the year of the permanent modification and should be filed with the return for the taxable year in which the HAMP-PRA borrower’s mortgage loan ceased to be in good standing. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 04 HAMP-PRA borrowers who choose to treat the HAMP-PRA discharge as being realized on the dates on which the unpaid principal balance of the mortgage loan is reduced. Can i file my 2011 taxes in 2013 (1) If a HAMP-PRA borrower chooses to realize the HAMP-PRA discharge at the times that the unpaid principal balance on the new mortgage loan is reduced, instead of at the time of the permanent modification, then the HAMP-PRA borrower’s federal income tax returns for the taxable year that contains the permanent modification and for the subsequent taxable years must not treat any of the discharge as being realized at the time of the permanent modification and must treat the entire HAMP-PRA discharge as being realized in the amounts—and at the times—of the reductions in the unpaid principal balance. Can i file my 2011 taxes in 2013 Except as described in the last sentence of this paragraph, therefore, the income tax return for the year of the permanent modification must include no gross income from—nor report on Form 982 an exclusion of—any amount of the HAMP-PRA discharge. Can i file my 2011 taxes in 2013 Instead, the HAMP-PRA discharge is included in gross income (or is reported on Form 982 as excluded from gross income) in the subsequent years in which the unpaid principal balance is reduced. Can i file my 2011 taxes in 2013 If the first such reduction occurs in the year of the permanent modification, however, then the amount of any such reduction is reflected as an inclusion or exclusion on the federal income tax return for that year. Can i file my 2011 taxes in 2013 (2) A HAMP-PRA borrower who has been using the method described in section 6. Can i file my 2011 taxes in 2013 02(1) of this revenue procedure may change to the method described in section 6. Can i file my 2011 taxes in 2013 02(2) but must comply with the consistency and open-year requirements described in section 6. Can i file my 2011 taxes in 2013 01 of this revenue procedure. Can i file my 2011 taxes in 2013 SECTION 7. Can i file my 2011 taxes in 2013 PENALTY RELIEF FOR 2012 . Can i file my 2011 taxes in 2013 01 The Service will not assert penalties under § 6721 or § 6722 against an investor for failing to timely file and furnish a 2012 Form 1099-C as required by section 5. Can i file my 2011 taxes in 2013 03 through 5. Can i file my 2011 taxes in 2013 04 and section 8. Can i file my 2011 taxes in 2013 02 of this revenue procedure with respect to discharge of indebtedness resulting from HAMP-PRA permanent modifications that take place during calendar year 2012 if the following requirements are satisfied: (1) Not later than February 28, 2013, a statement is sent to the HAMP-PRA borrower containing the following: (a) The HAMP-PRA borrower’s name, address, and taxpayer identification number; and (b) The date and amount of the discharge of indebtedness (as described in sections 4. Can i file my 2011 taxes in 2013 01 through 4. Can i file my 2011 taxes in 2013 04 of this revenue procedure) that is required to be reported for 2012. Can i file my 2011 taxes in 2013 (2) Not later than March 28, 2013, a statement is sent to the Service. Can i file my 2011 taxes in 2013 It must be in the form of a single statement that separately lists for each HAMP-PRA borrower the information specified in section 7. Can i file my 2011 taxes in 2013 01(1) of this revenue procedure. Can i file my 2011 taxes in 2013 The statement should be sent to the Service at the following address: Internal Revenue Service Center Stop 6728AUSC Austin, TX 73301 . Can i file my 2011 taxes in 2013 02 The Service will not assert penalties under § 6721 or § 6722 with respect to any Forms 1099-MISC for 2012 that sections 5. Can i file my 2011 taxes in 2013 06 and 8. Can i file my 2011 taxes in 2013 02 of this revenue procedure require to be filed with the Service and furnished to taxpayers. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 03 Section 8. Can i file my 2011 taxes in 2013 03 and 8. Can i file my 2011 taxes in 2013 04 of this revenue procedure, below, describes penalty relief regarding Forms 1099-C and 1099-MISC for 2010 and 2011. Can i file my 2011 taxes in 2013 SECTION 8. Can i file my 2011 taxes in 2013 SCOPE AND EFFECTIVE DATE . Can i file my 2011 taxes in 2013 01 This revenue procedure applies to all borrowers, investors, and servicers who participate, or have participated, in the HAMP-PRA, regardless of when the permanent modification occurs. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 02 Section 5 of this revenue procedure is effective for Forms 1099-C and 1099-MISC due or filed after January 24, 2013. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 03 Because of the effective date in section 8. Can i file my 2011 taxes in 2013 02 of this revenue procedure, an investor is not subject to penalties under § 6721 or § 6722 on the grounds that the investor failed to timely file and furnish a 2010 or 2011 Form 1099-C as described in section 5. Can i file my 2011 taxes in 2013 03 through 5. Can i file my 2011 taxes in 2013 04 of this revenue procedure (or on the grounds that the investor filed or furnished a 2010 or 2011 Form 1099-C that is inconsistent with section 5. Can i file my 2011 taxes in 2013 03 through 5. Can i file my 2011 taxes in 2013 04 of this revenue procedure), provided that the investor demonstrates a good faith attempt to comply with the requirements of § 6050P and that the failure was not due to willful neglect. Can i file my 2011 taxes in 2013 . Can i file my 2011 taxes in 2013 04 Because of the effective date in section 8. Can i file my 2011 taxes in 2013 02 of this revenue procedure, the Service will not assert penalties under § 6721 or § 6722 on the grounds of a failure to timely file and furnish a 2010 or 2011 Form 1099-MISC, as described in section 5. Can i file my 2011 taxes in 2013 06 of this revenue procedure. Can i file my 2011 taxes in 2013 SECTION 9. Can i file my 2011 taxes in 2013 DRAFTING INFORMATION The principal authors of this revenue procedure are Ronald J. Can i file my 2011 taxes in 2013 Goldstein of the Office of Chief Counsel (Procedure and Administration); Shareen S. Can i file my 2011 taxes in 2013 Pflanz and Sheldon A. Can i file my 2011 taxes in 2013 Iskow of the Office of Chief Counsel (Income Tax and Accounting); and Andrea M. Can i file my 2011 taxes in 2013 Hoffenson of the Office of Chief Counsel (Financial Institutions and Products). Can i file my 2011 taxes in 2013 For further information regarding this revenue procedure, contact Procedure and Administration branch 1 at (202) 622-4910, Income Tax and Accounting branch 4 at (202) 622-4920, or Financial Institutions and Products branch 1 at (202) 622-3920 (not toll-free calls). Can i file my 2011 taxes in 2013 Prev  Up  Next   Home   More Internal Revenue Bulletins