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Does Active Duty Military Pay State Taxes

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Does Active Duty Military Pay State Taxes

Does active duty military pay state taxes Internal Revenue Bulletin:  2011-12  March 21, 2011  Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2011-21 Table of Contents SECTION 1. Does active duty military pay state taxes PURPOSE SECTION 2. Does active duty military pay state taxes BACKGROUND SECTION 3. Does active duty military pay state taxes SCOPE SECTION 4. Does active duty military pay state taxes APPLICATION SECTION 5. Does active duty military pay state taxes EFFECTIVE DATE SECTION 6. Does active duty military pay state taxes EFFECT ON OTHER DOCUMENTS SECTION 7. Does active duty military pay state taxes DRAFTING INFORMATION SECTION 1. Does active duty military pay state taxes PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2011, including separate tables of limitations on depreciation deductions for trucks and vans; (2) the amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2011, including a separate table of inclusion amounts for lessees of trucks and vans; and (3) revised tables of depreciation limitations and lessee inclusion amounts for passenger automobiles that were first placed in service or first leased by the taxpayer, respectively, during 2010 and to which the 50 percent additional first year depreciation deduction under § 168(k)(1)(A) of the Internal Revenue Code or the 100 percent additional first year depreciation deduction under § 168(k)(5) applies. Does active duty military pay state taxes The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7). Does active duty military pay state taxes SECTION 2. Does active duty military pay state taxes BACKGROUND . Does active duty military pay state taxes 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. Does active duty military pay state taxes For passenger automobiles placed in service after 1988, § 280F(d)(7) requires the Internal Revenue Service to increase the amounts allowable as depreciation deductions by a price inflation adjustment amount. Does active duty military pay state taxes The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. Does active duty military pay state taxes This change reflects the higher rate of price inflation for trucks and vans since 1988. Does active duty military pay state taxes . Does active duty military pay state taxes 02 Section 2022(a) of the Small Business Jobs Act of 2010, Pub. Does active duty military pay state taxes L. Does active duty military pay state taxes No. Does active duty military pay state taxes 111-240, 124 Stat. Does active duty military pay state taxes 2504 (September 27, 2010), extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property (as defined in § 168(k)(2)) acquired by the taxpayer after December 31, 2007, and before January 1, 2011, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2011. Does active duty military pay state taxes Section 401(a) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. Does active duty military pay state taxes L. Does active duty military pay state taxes No. Does active duty military pay state taxes 111-312, 124 Stat. Does active duty military pay state taxes 3296 (Dec. Does active duty military pay state taxes 17, 2010) (the “Act”) further extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property acquired by the taxpayer after December 31, 2007, and before January 1, 2013, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2013. Does active duty military pay state taxes Section 401(b) of the Act further amended § 168(k) by adding § 168(k)(5). Does active duty military pay state taxes It allows a 100 percent additional first year depreciation deduction for qualified property acquired by a taxpayer after September 8, 2010, and before January 1, 2012, if the taxpayer places the property in service generally before January 1, 2012. Does active duty military pay state taxes Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A)(i) by $8,000 for passenger automobiles to which the additional first year depreciation deduction under § 168(k) (hereinafter, referred to as “§ 168(k) additional first year depreciation deduction”) applies. Does active duty military pay state taxes . Does active duty military pay state taxes 03 Section 168(k)(2)(D)(i) provides that the § 168(k) additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). Does active duty military pay state taxes Section 168(k)(2)(D)(iii) permits a taxpayer to elect out of the § 168(k) additional first year depreciation deduction for any class of property. Does active duty military pay state taxes Section 168(k)(4), as amended by the Act, permits a corporation to elect to increase the alternative minimum tax (“AMT”) credit limitation under § 53(c), instead of claiming the § 168(k) additional first year depreciation deduction for all eligible qualified property placed in service after December 31, 2010, that is round 2 extension property (as defined in § 168(k)(4)(I)(iv). Does active duty military pay state taxes Accordingly, this revenue procedure provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction applies. Does active duty military pay state taxes This revenue procedure also provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction does not apply, either because taxpayer (1) purchased the passenger automobile used; (2) did not use the passenger automobile during 2011 more than 50 percent for business purposes; (3) elected out of the § 168(k) additional first year depreciation deduction pursuant to § 168(k)(2)(D)(iii); or (4) elected to increase the § 53 AMT credit limitation in lieu of claiming § 168(k) additional first year depreciation. Does active duty military pay state taxes . Does active duty military pay state taxes 04 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. Does active duty military pay state taxes The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. Does active duty military pay state taxes Under § 1. Does active duty military pay state taxes 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an amount determined by applying a formula to the amount obtained from a table. Does active duty military pay state taxes One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. Does active duty military pay state taxes Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. Does active duty military pay state taxes SECTION 3. Does active duty military pay state taxes SCOPE . Does active duty military pay state taxes 01 The limitations on depreciation deductions in section 4. Does active duty military pay state taxes 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2011, and continue to apply for each taxable year that the passenger automobile remains in service. Does active duty military pay state taxes . Does active duty military pay state taxes 02 The tables in section 4. Does active duty military pay state taxes 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2011. Does active duty military pay state taxes Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. Does active duty military pay state taxes See Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2006-18, 2006-1 C. Does active duty military pay state taxes B. Does active duty military pay state taxes 645, for passenger automobiles first leased during calendar year 2006; Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2007-30, 2007-1 C. Does active duty military pay state taxes B. Does active duty military pay state taxes 1104, for passenger automobiles first leased during calendar year 2007; Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2008-22, 2008-1 C. Does active duty military pay state taxes B. Does active duty military pay state taxes 658, for passenger automobiles first leased during calendar year 2008; Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2009-24, 2009-1 C. Does active duty military pay state taxes B. Does active duty military pay state taxes 885, for passenger automobiles first leased during calendar year 2009; and Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2010-18, 2010-1 C. Does active duty military pay state taxes B. Does active duty military pay state taxes 427, as amplified and modified by section 4. Does active duty military pay state taxes 03 of this revenue procedure, for passenger automobiles first leased during calendar year 2010. Does active duty military pay state taxes SECTION 4. Does active duty military pay state taxes APPLICATION . Does active duty military pay state taxes 01 Limitations on Depreciation Deductions for Certain Automobiles. Does active duty military pay state taxes (1) Amount of the inflation adjustment. Does active duty military pay state taxes (a) Passenger automobiles (other than trucks or vans). Does active duty military pay state taxes Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. Does active duty military pay state taxes Section 280F(d)(7)(B)(ii) defines the term “CPI automobile component” as the automobile component of the Consumer Price Index for all Urban Consumers published by the Department of Labor. Does active duty military pay state taxes The new car component of the CPI was 115. Does active duty military pay state taxes 2 for October 1987 and 137. Does active duty military pay state taxes 880 for October 2010. Does active duty military pay state taxes The October 2010 index exceeded the October 1987 index by 22. Does active duty military pay state taxes 680. Does active duty military pay state taxes Therefore, the automobile price inflation adjustment for 2011 for passenger automobiles (other than trucks and vans) is 19. Does active duty military pay state taxes 69 percent (22. Does active duty military pay state taxes 680/115. Does active duty military pay state taxes 2 x 100%). Does active duty military pay state taxes The dollar limitations in § 280F(a) are multiplied by a factor of 0. Does active duty military pay state taxes 1969, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2011. Does active duty military pay state taxes This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2011. Does active duty military pay state taxes (b) Trucks and vans. Does active duty military pay state taxes To determine the dollar limitations for trucks and vans first placed in service during calendar year 2011, the Service uses the new truck component of the CPI instead of the new car component. Does active duty military pay state taxes The new truck component of the CPI was 112. Does active duty military pay state taxes 4 for October 1987 and 142. Does active duty military pay state taxes 556 for October 2010. Does active duty military pay state taxes The October 2010 index exceeded the October 1987 index by 30. Does active duty military pay state taxes 156. Does active duty military pay state taxes Therefore, the automobile price inflation adjustment for 2011 for trucks and vans is 26. Does active duty military pay state taxes 83 percent (30. Does active duty military pay state taxes 156/112. Does active duty military pay state taxes 4 x 100%). Does active duty military pay state taxes The dollar limitations in § 280F(a) are multiplied by a factor of 0. Does active duty military pay state taxes 2683, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. Does active duty military pay state taxes This adjustment applies to all trucks and vans that are first placed in service in calendar year 2011. Does active duty military pay state taxes (2) Amount of the limitation. Does active duty military pay state taxes Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2011. Does active duty military pay state taxes Use Table 1 for a passenger automobile (other than a truck or van), and Table 2 for a truck or van, placed in service in calendar year 2011 for which the § 168(k) additional first year depreciation deduction applies. Does active duty military pay state taxes Use Table 3 for a passenger automobile (other than a truck or van), and Table 4 for a truck or van, placed in service in calendar year 2011 for which the § 168(k) additional first year depreciation deduction does not apply. Does active duty military pay state taxes The Service intends to issue additional guidance addressing the interaction between the 100 percent additional first year depreciation deduction and § 280F(a) for the taxable years subsequent to the first taxable year. Does active duty military pay state taxes REV. Does active duty military pay state taxes PROC. Does active duty military pay state taxes 2011-21 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. Does active duty military pay state taxes PROC. Does active duty military pay state taxes 2011-21 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,260 2nd Tax Year $5,200 3rd Tax Year $3,150 Each Succeeding Year $1,875 REV. Does active duty military pay state taxes PROC. Does active duty military pay state taxes 2011-21 TABLE 3 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. Does active duty military pay state taxes PROC. Does active duty military pay state taxes 2011-21 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,260 2nd Tax Year $5,200 3rd Tax Year $3,150 Each Succeeding Year $1,875 . Does active duty military pay state taxes 02 Inclusions in Income of Lessees of Passenger Automobiles. Does active duty military pay state taxes A taxpayer must follow the procedures in § 1. Does active duty military pay state taxes 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2011. Does active duty military pay state taxes In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure, while lessees of trucks and vans should use Table 6 of this revenue procedure. Does active duty military pay state taxes REV. Does active duty military pay state taxes PROC. Does active duty military pay state taxes 2011-21 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2011 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & later $18,500 $19,000 3 8 11 13 16 19,000 19,500 4 9 13 15 18 19,500 20,000 4 10 15 17 20 20,000 20,500 5 11 16 19 23 20,500 21,000 5 12 18 21 25 21,000 21,500 6 13 19 24 26 21,500 22,000 6 14 21 26 29 22,000 23,000 7 16 23 29 32 23,000 24,000 8 18 27 32 37 24,000 25,000 9 20 30 36 42 25,000 26,000 10 23 33 40 46 26,000 27,000 11 25 36 44 51 27,000 28,000 12 27 40 48 55 28,000 29,000 13 29 43 52 60 29,000 30,000 14 31 47 55 65 30,000 31,000 15 34 49 60 69 31,000 32,000 16 36 53 63 73 32,000 33,000 17 38 56 68 77 33,000 34,000 18 40 60 71 82 34,000 35,000 19 42 63 75 87 35,000 36,000 20 45 66 79 91 36,000 37,000 21 47 69 83 96 37,000 38,000 22 49 73 87 100 38,000 39,000 23 51 76 91 105 39,000 40,000 24 53 80 94 110 40,000 41,000 25 56 82 99 114 41,000 42,000 26 58 86 102 119 42,000 43,000 27 60 89 107 123 43,000 44,000 28 62 93 110 128 44,000 45,000 29 64 96 114 133 45,000 46,000 30 67 98 119 137 46,000 47,000 31 69 102 122 141 47,000 48,000 32 71 105 127 145 48,000 49,000 33 73 109 130 150 49,000 50,000 34 76 111 134 155 50,000 51,000 35 78 115 138 159 51,000 52,000 36 80 118 142 164 52,000 53,000 37 82 122 146 168 53,000 54,000 38 84 125 150 173 54,000 55,000 39 87 128 153 178 55,000 56,000 40 89 131 158 182 56,000 57,000 41 91 135 161 187 57,000 58,000 42 93 138 166 191 58,000 59,000 43 95 142 169 196 59,000 60,000 44 98 144 174 200 60,000 62,000 46 101 149 179 207 62,000 64,000 48 105 156 187 216 64,000 66,000 50 109 163 195 225 66,000 68,000 52 114 169 203 234 68,000 70,000 54 118 176 211 243 70,000 72,000 56 123 182 218 253 72,000 74,000 58 127 189 226 262 74,000 76,000 60 132 195 234 270 76,000 78,000 62 136 202 242 279 78,000 80,000 64 140 209 250 288 80,000 85,000 67 148 220 264 304 85,000 90,000 72 159 237 283 327 90,000 95,000 77 170 253 303 350 95,000 100,000 82 181 269 323 372 100,000 110,000 90 198 293 352 406 110,000 120,000 100 220 326 391 452 120,000 130,000 110 242 359 430 497 130,000 140,000 120 264 392 469 543 140,000 150,000 130 286 424 509 588 150,000 160,000 140 308 457 548 633 160,000 170,000 150 330 490 587 679 170,000 180,000 160 352 523 626 724 180,000 190,000 170 374 555 666 769 190,000 200,000 180 396 588 705 815 200,000 210,000 190 418 621 744 860 210,000 220,000 200 440 654 784 904 220,000 230,000 210 462 687 823 950 230,000 240,000 220 484 719 863 995 240,000 And up 230 506 752 902 1,040 REV. Does active duty military pay state taxes PROC. Does active duty military pay state taxes 2011-21 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2011 Fair Market Value of Truck or Van Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & later $19,000 $19,500 3 7 9 12 13 19,500 20,000 3 8 11 14 15 20,000 20,500 4 9 13 15 18 20,500 21,000 4 10 15 17 20 21,000 21,500 5 11 16 20 22 21,500 22,000 5 12 18 22 24 22,000 23,000 6 14 20 24 29 23,000 24,000 7 16 24 28 32 24,000 25,000 8 18 27 32 37 25,000 26,000 9 20 31 36 41 26,000 27,000 10 23 33 40 46 27,000 28,000 11 25 37 43 51 28,000 29,000 12 27 40 48 55 29,000 30,000 13 29 43 52 60 30,000 31,000 14 31 47 56 64 31,000 32,000 15 34 49 60 69 32,000 33,000 16 36 53 63 74 33,000 34,000 17 38 56 68 78 34,000 35,000 18 40 60 71 83 35,000 36,000 19 43 62 76 87 36,000 37,000 20 45 66 79 92 37,000 38,000 21 47 69 83 97 38,000 39,000 22 49 73 87 101 39,000 40,000 23 51 76 91 105 40,000 41,000 24 54 79 95 109 41,000 42,000 25 56 82 99 114 42,000 43,000 26 58 86 103 118 43,000 44,000 27 60 89 107 123 44,000 45,000 28 62 93 110 128 45,000 46,000 29 65 95 115 132 46,000 47,000 30 67 99 118 137 47,000 48,000 31 69 102 123 141 48,000 49,000 32 71 106 126 146 49,000 50,000 33 73 109 130 151 50,000 51,000 34 76 112 134 155 51,000 52,000 35 78 115 138 160 52,000 53,000 36 80 118 143 164 53,000 54,000 37 82 122 146 169 54,000 55,000 38 84 125 150 173 55,000 56,000 39 87 128 154 177 56,000 57,000 40 89 131 158 182 57,000 58,000 41 91 135 162 186 58,000 59,000 42 93 138 166 191 59,000 60,000 43 95 142 169 196 60,000 62,000 45 99 146 175 203 62,000 64,000 47 103 153 183 212 64,000 66,000 49 107 160 191 221 66,000 68,000 51 112 166 199 229 68,000 70,000 53 116 173 206 239 70,000 72,000 55 121 179 214 248 72,000 74,000 57 125 186 222 257 74,000 76,000 59 129 192 231 266 76,000 78,000 61 134 198 239 275 78,000 80,000 63 138 205 246 285 80,000 85,000 66 146 217 260 300 85,000 90,000 71 157 233 280 322 90,000 95,000 76 168 250 299 345 95,000 100,000 81 179 266 319 368 100,000 110,000 89 196 290 348 402 110,000 120,000 99 218 323 387 447 120,000 130,000 109 240 355 427 493 130,000 140,000 119 262 388 466 538 140,000 150,000 129 284 421 505 583 150,000 160,000 139 306 454 544 629 160,000 170,000 149 328 487 583 674 170,000 180,000 159 350 519 623 719 180,000 190,000 169 372 552 662 765 190,000 200,000 179 394 585 701 810 200,000 210,000 189 416 618 740 856 210,000 220,000 199 438 651 779 901 220,000 230,000 209 460 683 819 946 230,000 240,000 219 482 716 858 992 240,000 And up 229 504 749 897 1,037 . Does active duty military pay state taxes 03 Revised Amounts for Passenger Automobiles Placed in Service During 2010. Does active duty military pay state taxes (1) Calculation of the Revised Amount. Does active duty military pay state taxes The revised depreciation limits provided in this section 4. Does active duty military pay state taxes 03 were calculated by increasing the existing limitations on the first year allowance in Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2010-18 by $8,000 as provided in § 168(k)(2)(F)(i). Does active duty military pay state taxes (2) Amount of the Revised Limitation. Does active duty military pay state taxes For passenger automobiles (that are not trucks or vans) placed in service by the taxpayer in calendar year 2010 for which the § 168(k) additional first year depreciation deduction applies, Table 7 of this revenue procedure contains the revised dollar amount of the depreciation limitations for each taxable year. Does active duty military pay state taxes For trucks or vans placed in service by the taxpayer in calendar year 2010 for which the § 168(k) additional first year depreciation deduction applies, Table 8 of this revenue procedure contains the revised dollar amount of the depreciation limitations for each taxable year. Does active duty military pay state taxes If the § 168(k) additional first year depreciation deduction does not apply to a passenger automobile placed in service by the taxpayer in calendar year 2010, the depreciation limitations for each taxable year in Tables 1 and 2 of Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2010-18 apply. Does active duty military pay state taxes REV. Does active duty military pay state taxes PROC. Does active duty military pay state taxes 2011-21 TABLE 7 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2010 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. Does active duty military pay state taxes PROC. Does active duty military pay state taxes 2011-21 TABLE 8 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2010 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 (3) Modification to lease inclusion amounts for 2010. Does active duty military pay state taxes The lease inclusion amounts in Tables 3 and 4 of Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2010-18 are modified by striking the first four lines of the inclusion amounts in each table. Does active duty military pay state taxes Consequently, Table 3 of Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2010-18 applies to passenger automobiles (other than trucks and vans) that are first leased by the taxpayer in calendar year 2010 with a fair market value over $18,500, and Table 4 of Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2010-18 applies to trucks and vans that are first leased by the taxpayer in calendar year 2010 with a fair market value over $19,000. Does active duty military pay state taxes SECTION 5. Does active duty military pay state taxes EFFECTIVE DATE This revenue procedure, with the exception of section 4. Does active duty military pay state taxes 03, applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2011. Does active duty military pay state taxes Section 4. Does active duty military pay state taxes 03 of this revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2010. Does active duty military pay state taxes SECTION 6. Does active duty military pay state taxes EFFECT ON OTHER DOCUMENTS Rev. Does active duty military pay state taxes Proc. Does active duty military pay state taxes 2010-18 is amplified and modified. Does active duty military pay state taxes SECTION 7. Does active duty military pay state taxes DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. Does active duty military pay state taxes Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). Does active duty military pay state taxes For further information regarding this revenue procedure, contact Mr. Does active duty military pay state taxes Harvey at (202) 622-4930 (not a toll-free call). Does active duty military pay state taxes Prev  Up  Next   Home   More Internal Revenue Bulletins
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The Does Active Duty Military Pay State Taxes

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