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Earned Income Tax Credit

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Earned Income Tax Credit

Earned income tax credit Publication 908 - Introductory Material Table of Contents Future Developments What's New Reminders Introduction Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 908, such as legislation enacted after it was published, go to www. Earned income tax credit irs. Earned income tax credit gov/pub908. Earned income tax credit What's New Expiration of provision for catch-up contributions for IRC section 401(k) participants whose employer filed bankruptcy. Earned income tax credit  The Pension Protection Act of 2006, P. Earned income tax credit L. Earned income tax credit 109-280, previously allowed additional contributions of up to $7,000 in a traditional or Roth IRA for employees who participated in an IRC section 401(k) plan of an employer that filed bankruptcy in an earlier year. Earned income tax credit This provision was not extended for tax years beginning on or after January 1, 2010. Earned income tax credit Automatic 6-month extension of time to file a bankruptcy estate return now available for individuals in Chapter 7 or 11 bankruptcy. Earned income tax credit  Beginning June 24, 2011, the IRS clarified in T. Earned income tax credit D. Earned income tax credit 9531 that there is available an automatic 6-month extension of time to file a bankruptcy estate income tax return for individuals in Chapter 7 or Chapter 11 bankruptcy proceedings upon filing a required application. Earned income tax credit The previous extension of time to file a bankruptcy estate return was 5 months. Earned income tax credit Reminders The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. Earned income tax credit  The changes to the U. Earned income tax credit S. Earned income tax credit Bankruptcy Code enacted by BAPCA are incorporated throughout this publication. Earned income tax credit Debtors filing under chapters 7, 11, 12, and 13 of the Bankruptcy Code must file all applicable federal, state, and local tax returns that become due after a case commences. Earned income tax credit Failure to file tax returns timely or obtain an extension can cause a bankruptcy case to be converted to another chapter or dismissed. Earned income tax credit In chapter 13 cases, the debtor must file all required tax returns for tax periods ending within 4 years of the filing of the bankruptcy petition. Earned income tax credit Photographs of missing children. Earned income tax credit  The IRS is a proud partner with the National Center for Missing and Exploited Children. Earned income tax credit Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Earned income tax credit You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Earned income tax credit Introduction This publication is not intended to cover bankruptcy law in general, or to provide detailed discussions of the tax rules for the more complex corporate bankruptcy reorganizations or other highly technical transactions. Earned income tax credit Additionally, this publication is not updated on an annual basis and may not reflect recent developments in bankruptcy or tax law. Earned income tax credit If you need more guidance on the bankruptcy or tax laws applicable to your case, you should seek professional advice. Earned income tax credit This publication explains the basic federal income tax aspects of bankruptcy. Earned income tax credit A fundamental goal of the bankruptcy laws enacted by Congress is to give an honest debtor a financial “fresh start”. Earned income tax credit This is accomplished through the bankruptcy discharge, which is a permanent injunction (court ordered prohibition) against the collection of certain debts as a personal liability of the debtor. Earned income tax credit Bankruptcy proceedings begin with the filing of either a voluntary petition in the United States Bankruptcy Court, or in certain cases an involuntary petition filed by creditors. Earned income tax credit This filing creates the bankruptcy estate. Earned income tax credit The bankruptcy estate generally consists of all of the assets the individual or entity owns on the date the bankruptcy petition was filed. Earned income tax credit The bankruptcy estate is treated as a separate taxable entity for individuals filing bankruptcy petitions under chapter 7 or 11 of the Bankruptcy Code, discussed later. Earned income tax credit The tax obligations of taxable bankruptcy estates are discussed later under Individuals in Chapter 7 or 11. Earned income tax credit Generally, when a debt owed to another person or entity is canceled, the amount canceled or forgiven is considered income that is taxed to the person owing the debt. Earned income tax credit If a debt is canceled under a bankruptcy proceeding, the amount canceled is not income. Earned income tax credit However, the canceled debt reduces other tax benefits to which the debtor would otherwise be entitled. Earned income tax credit See Debt Cancellation, later. Earned income tax credit Useful Items - You may want to see: Publication 225 Farmer's Tax Guide 525 Taxable and Nontaxable Income 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 538 Accounting Periods and Methods 544 Sales and Other Dispositions of Assets 551 Basis of Assets 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Form (and Instructions) SS-4 Application for Employer Identification Number, and separate instructions 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) 1040 U. Earned income tax credit S. Earned income tax credit Individual Income Tax Return, and separate instructions Schedule SE (Form 1040) Self-Employment Tax 1040X Amended U. Earned income tax credit S. Earned income tax credit Individual Income Tax Return, and separate instructions 1041 U. Earned income tax credit S. Earned income tax credit Income Tax Return for Estates and Trusts, and separate instructions 1041-ES Estimated Income Tax for Estates and Trusts 1041-V Payment Voucher 4506 Request for Copy of Tax Return 4506-T Request for Transcript of Tax Return 4852 Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Earned income tax credit 4868 Application for Automatic Extension of Time To File U. Earned income tax credit S. Earned income tax credit Individual Income Tax Return 7004 Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns See How To Get Tax Help, later, for information about getting these publications and forms. Earned income tax credit Prev  Up  Next   Home   More Online Publications
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1040 Central
1040 Central has been updated for the last few weeks of Filing Season 2014.

Tax Scams/Consumer Alerts
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Tax Counseling for the Elderly
The Tax Counseling for the Elderly Program provides free tax help to people aged 60 and older.

Tips for Seniors in Preparing their Taxes
Check here for tips on common pitfalls for seniors to watch for when preparing their individual tax returns.

Life Events That May Have Tax Consequences for Seniors and Retirees
Some events in the lives of seniors and retirees may affect their tax responsibilities. This page contains links to more information.

Are Your Social Security Benefits Taxable?
How much, if any, of your social security benefits are taxable depends on your total income and marital status.

Frequently Asked Questions for Seniors
This page highlights places to go for answers to questions frequently asked by seniors.

Products for Older Americans
This page contains links to several IRS products of interest to older Americans.

Page Last Reviewed or Updated: 28-Mar-2014

The Earned Income Tax Credit

Earned income tax credit Publication 929 - Main Content Table of Contents Part 1. Earned income tax credit Rules for All Dependents Filing RequirementsEarned Income Only Unearned Income Only Both Earned and Unearned Income Other Filing Requirements Should a Return Be Filed Even If Not Required? Responsibility for Child's ReturnThird party designee. Earned income tax credit Designated as representative. Earned income tax credit IRS notice. Earned income tax credit Standard DeductionStandard Deduction of Zero Dependent's Own Exemption Withholding From WagesExceptions. Earned income tax credit Part 2. Earned income tax credit Tax on Unearned Income of Certain ChildrenWhich Parent's Return To Use Parent's Election To Report Child's Interest and DividendsEffect of Making the Election Figuring Child's Income Figuring Additional Tax Tax for Certain Children Who Have Unearned IncomeProviding Parental Information (Form 8615, Lines A–C) Step 1. Earned income tax credit Figuring the Child's Net Unearned Income (Form 8615, Part I) Step 2. Earned income tax credit Figuring a Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Step 3. Earned income tax credit Figuring the Child's Tax (Form 8615, Part III) Alternative Minimum Tax Illustrated Example Part 1. Earned income tax credit Rules for All Dependents This part of the publication discusses the filing requirements for dependents, who is responsible for a child's return, how to figure a dependent's standard deduction and exemption (if any), and whether a dependent can claim exemption from federal income tax withholding. Earned income tax credit Filing Requirements Whether a dependent has to file a return generally depends on the amount of the dependent's earned and unearned income and whether the dependent is married, is age 65 or older, or is blind. Earned income tax credit A dependent may have to file a return even if his or her income is less than the amount that would normally require a return. Earned income tax credit See Other Filing Requirements, later. Earned income tax credit The following sections apply to dependents with: Earned income only, Unearned income only, and Both earned and unearned income. Earned income tax credit  To find out whether a dependent must file, read the section that applies, or use Table 1. Earned income tax credit Earned Income Only A dependent whose gross income is only earned income must file a return if the gross income is more than the amount listed in the following table. Earned income tax credit Marital Status Amount Single   Under 65 and not blind $6,100 Either 65 or older or blind $7,600 65 or older and blind $9,100 Married*   Under 65 and not blind $6,100 Either 65 or older or blind $7,300 65 or older and blind $8,500 *If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned). Earned income tax credit Example. Earned income tax credit William is 16. Earned income tax credit His mother claims an exemption for him on her income tax return. Earned income tax credit He worked part time on weekends during the school year and full time during the summer. Earned income tax credit He earned $7,000 in wages. Earned income tax credit He did not have any unearned income. Earned income tax credit He must file a tax return because he has earned income only and his gross income is more than $6,100. Earned income tax credit If he is blind, he does not have to file a return because his gross income is not more than $7,600. Earned income tax credit Unearned Income Only A dependent whose gross income is only unearned income must file a return if the gross income is more than the amount listed in the following table. Earned income tax credit Marital Status Amount Single   Under 65 and not blind $1,000 Either 65 or older or blind $2,500 65 or older and blind $4,000 Married*   Under 65 and not blind $1,000 Either 65 or older or blind $2,200 65 or older and blind $3,400 *If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned). Earned income tax credit Example. Earned income tax credit Sarah is 18 and single. Earned income tax credit Her parents can claim an exemption for her on their income tax return. Earned income tax credit She received $1,970 of taxable interest and dividend income. Earned income tax credit She did not work during the year. Earned income tax credit She must file a tax return because she has unearned income only and her gross income is more than $1,000. Earned income tax credit If she is blind, she does not have to file a return because she has unearned income only and her gross income is not more than $2,500. Earned income tax credit Election to report child's unearned income on parent's return. Earned income tax credit   A parent of a child under age 19 (or under age 24 if a full-time student) may be able to elect to include the child's interest and dividend income on the parent's return. Earned income tax credit See Parent's Election To Report Child's Interest and Dividends in Part 2. Earned income tax credit If the parent makes this election, the child does not have to file a return. Earned income tax credit Both Earned and Unearned Income A dependent who has both earned and unearned income generally must file a return if the dependent's gross income is more than line 5 of the following worksheet. Earned income tax credit Filing Requirement Worksheet for Most Dependents 1. Earned income tax credit Enter dependent's earned income plus $350     2. Earned income tax credit Minimum amount   $1,000 3. Earned income tax credit Compare lines 1 and 2. Earned income tax credit Enter the larger amount     4. Earned income tax credit Maximum amount   6,100 5. Earned income tax credit Compare lines 3 and 4. Earned income tax credit Enter the smaller amount     6. Earned income tax credit Enter the dependent's gross income. Earned income tax credit If line 6 is more than line 5, the dependent must file an income tax return. Earned income tax credit If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Earned income tax credit       Table 1. Earned income tax credit 2013 Filing Requirements for Dependents If your parent (or someone else) can claim you as a dependent, use this table to see if you must file a return. Earned income tax credit   See the definitions of “dependent,”“earned income,”“unearned income,” and “gross income” in the Glossary. Earned income tax credit   Single dependents—Were you either age 65 or older or blind?     No. Earned income tax credit You must file a return if any of the following apply. Earned income tax credit       Your unearned income was over $1,000. Earned income tax credit Your earned income was over $6,100. Earned income tax credit Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. Earned income tax credit         Yes. Earned income tax credit You must file a return if any of the following apply. Earned income tax credit     Your unearned income was over $2,500 ($4,000 if 65 or older and blind), Your earned income was over $7,600 ($9,100 if 65 or older and blind), Your gross income was more than the larger of—       $2,500 ($4,000 if 65 or older and blind), or Your earned income (up to $5,750) plus $1,850 ($3,350 if 65 or older and blind). Earned income tax credit       Married dependents—Were you either age 65 or older or blind?     No. Earned income tax credit You must file a return if any of the following apply. Earned income tax credit       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Earned income tax credit Your unearned income was over $1,000. Earned income tax credit Your earned income was over $6,100. Earned income tax credit Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. Earned income tax credit       Yes. Earned income tax credit You must file a return if any of the following apply. Earned income tax credit       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Earned income tax credit Your unearned income was over $2,200 ($3,400 if 65 or older and blind), Your earned income was over $7,300 ($8,500 if 65 or older and blind), Your gross income was more than the larger of—       $2,200 ($3,400 if 65 or older and blind), or Your earned income (up to $5,750) plus $1,550 ($2,750 if 65 or older and blind). Earned income tax credit       Example 1. Earned income tax credit Joe is 20, single, not blind, and a full-time college student. Earned income tax credit He does not provide more than half of his own support, and his parents claim an exemption for him on their income tax return. Earned income tax credit He received $200 taxable interest income and earned $2,750 from a part-time job. Earned income tax credit He does not have to file a tax return because his gross income of $2,950 ($200 interest plus $2,750 in wages) is not more than $3,100, the amount on line 5 of his filled-in Filing Requirement Worksheet for Most Dependents (shown next). Earned income tax credit Filled-in Example 1 Filing Requirement Worksheet  for Most Dependents 1. Earned income tax credit Enter dependent's earned income plus $350   $ 3,100 2. Earned income tax credit Minimum amount   1,000 3. Earned income tax credit Compare lines 1 and 2. Earned income tax credit Enter the larger amount   3,100 4. Earned income tax credit Maximum amount   6,100 5. Earned income tax credit Compare lines 3 and 4. Earned income tax credit Enter the smaller amount   3,100 6. Earned income tax credit Enter the dependent's gross income. Earned income tax credit If line 6 is more than line 5, the dependent must file an income tax return. Earned income tax credit If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Earned income tax credit   $ 2,950   Example 2. Earned income tax credit The facts are the same as in Example 1 except that Joe had $600 taxable interest income. Earned income tax credit He must file a tax return because his gross income of $3,350 ($600 interest plus $2,750 wages) is more than $3,100, the amount on line 5 of his filled-in worksheet (shown next). Earned income tax credit Filled-in Example 2 Filing Requirement Worksheet for Most Dependents 1. Earned income tax credit Enter dependent's earned income plus $350   $ 3,100 2. Earned income tax credit Minimum amount   1,000 3. Earned income tax credit Compare lines 1 and 2. Earned income tax credit Enter the larger amount   3,100 4. Earned income tax credit Maximum amount   6,100 5. Earned income tax credit Compare lines 3 and 4. Earned income tax credit Enter the smaller amount   3,100 6. Earned income tax credit Enter the dependent's gross income. Earned income tax credit If line 6 is more than line 5, the dependent must file an income tax return. Earned income tax credit If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Earned income tax credit   $ 3,350   Age 65 or older or blind. Earned income tax credit A dependent who is age 65 or older or blind must file a return if his or her gross income is more than line 7 of the following worksheet. Earned income tax credit Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. Earned income tax credit Enter dependent's earned income plus $350     2. Earned income tax credit Minimum amount   $1,000 3. Earned income tax credit Compare lines 1 and 2. Earned income tax credit Enter the larger amount     4. Earned income tax credit Maximum amount   6,100 5. Earned income tax credit Compare lines 3 and 4. Earned income tax credit Enter the smaller amount     6. Earned income tax credit Enter the amount from the following table that applies to the dependent       Marital Status Amount     Single         Either 65 or older or blind $1,500       65 or older and blind $3,000     Married         Either 65 or older or blind $1,200       65 or older and blind $2,400   7. Earned income tax credit Add lines 5 and 6. Earned income tax credit Enter the total     8. Earned income tax credit Enter the dependent's gross income. Earned income tax credit If line 8 is more than line 7, the dependent must file an income tax return. Earned income tax credit If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more     Example 3. Earned income tax credit The facts are the same as in Example 2 except that Joe is also blind. Earned income tax credit He does not have to file a return because his gross income of $3,350 is not more than $4,600, the amount on line 7 of his filled-in Filing Requirement Worksheet for Dependents Who Are Age 65 or Older or Blind (shown next). Earned income tax credit   Filled-in Example 3 Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. Earned income tax credit Enter dependent's earned income plus $350   $3,100 2. Earned income tax credit Minimum amount   1,000 3. Earned income tax credit Compare lines 1 and 2. Earned income tax credit Enter the larger amount   3,100 4. Earned income tax credit Maximum amount   6,100 5. Earned income tax credit Compare lines 3 and 4. Earned income tax credit Enter the smaller amount   3,100 6. Earned income tax credit Enter the amount from the following table that applies to the dependent   1,500   Marital Status Amount     Single         Either 65 or older or blind $1,500       65 or older and blind $3,000     Married         Either 65 or older or blind $1,200       65 or older and blind $2,400   7. Earned income tax credit Add lines 5 and 6. Earned income tax credit Enter the total   4,600 8. Earned income tax credit Enter the dependent's gross income. Earned income tax credit If line 8 is more than line 7, the dependent must file an income tax return. Earned income tax credit If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more   $3,350 Other Filing Requirements Some dependents may have to file a tax return even if their income is less than the amount that would normally require them to file a return. Earned income tax credit A dependent must file a tax return if he or she owes any other taxes, such as: Social security and Medicare taxes on tips not reported to his or her employer or on wages received from an employer who did not withhold these taxes, Uncollected social security and Medicare or railroad retirement taxes on tips reported to his or her employer or on group-term life insurance, Alternative minimum tax, Additional tax on a health savings account from Form 8889, Part III, Recapture taxes, such as the tax from recapture of an education credit, or Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. Earned income tax credit But if the dependent is filing a return only because of this tax, the dependent can file Form 5329 by itself. Earned income tax credit A dependent must also file a tax return if he or she: Had wages of $108. Earned income tax credit 28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes, or Had net earnings from self-employment of at least $400. Earned income tax credit Spouse itemizes. Earned income tax credit   A dependent must file a return if the dependent's spouse itemizes deductions on a separate return and the dependent has $5 or more of gross income (earned and/or unearned). Earned income tax credit Should a Return Be Filed Even If Not Required? Even if a dependent does not meet any of the filing requirements discussed earlier, he or she should file a tax return if either of the following applies. Earned income tax credit Income tax was withheld from his or her income. Earned income tax credit He or she qualifies for the earned income credit, additional child tax credit, health coverage tax credit, or refundable American opportunity education credit. Earned income tax credit See the tax return instructions to find out who qualifies for these credits. Earned income tax credit  By filing a return, the dependent can get a refund. Earned income tax credit Responsibility for Child's Return Generally, a child is responsible for filing his or her own tax return and for paying any tax, penalties, or interest on that return. Earned income tax credit If a child cannot file his or her own return for any reason, such as age, the child's parent, guardian, or other legally responsible person must file it for the child. Earned income tax credit Signing the child's return. Earned income tax credit   If the child cannot sign his or her return, a parent or guardian must sign the child's name followed by the words “By (signature), parent (or guardian) for minor child. Earned income tax credit ” Authority of parent or guardian. Earned income tax credit   A parent or guardian who signs a return on a child's behalf can deal with the IRS on all matters connected with the return. Earned income tax credit   In general, a parent or guardian who does not sign the child's return can only provide information concerning the child's return and pay the child's tax. Earned income tax credit That parent or guardian is not entitled to receive information from the IRS or legally bind the child to a tax liability arising from the return. Earned income tax credit Third party designee. Earned income tax credit   A child's parent or guardian who does not sign the child's return may be authorized, as a third party designee, to discuss the processing of the return with the IRS as well as provide information concerning the return. Earned income tax credit The child or the person signing the return on the child's behalf must check the “Yes” box in the “Third Party Designee” area of the return and name the parent or guardian as the designee. Earned income tax credit   If designated, a parent or guardian can respond to certain IRS notices and receive information about the processing of the return and the status of a refund or payment. Earned income tax credit This designation does not authorize the parent or guardian to receive any refund check, bind the child to any tax liability, or otherwise represent the child before the IRS. Earned income tax credit See the return instructions for more information. Earned income tax credit Designated as representative. Earned income tax credit   A parent or guardian who does not sign the child's return may be designated as the child's representative by the child or the person signing the return on the child's behalf. Earned income tax credit Form 2848, Power of Attorney and Declaration of Representative, is used to designate a child's representative. Earned income tax credit See Publication 947, Practice Before the IRS and Power of Attorney, for more information. Earned income tax credit   If designated, a parent or guardian can receive information about the child's return but cannot legally bind the child to a tax liability unless authorized to do so by the law of the state in which the child lives. Earned income tax credit IRS notice. Earned income tax credit   If you or the child receives a notice from the IRS concerning the child's return or tax liability, you should immediately inform the IRS that the notice concerns a child. Earned income tax credit The notice will show who to contact. Earned income tax credit The IRS will try to resolve the matter with the parent(s) or guardian(s) of the child consistent with their authority. Earned income tax credit Child's earnings. Earned income tax credit   For federal income tax purposes, amounts a child earns by performing services are included in the gross income of the child and not the gross income of the parent. Earned income tax credit This is true even if, under state law, the parent has the right to the earnings and may actually have received them. Earned income tax credit If the child does not pay the tax due on this income, the parent may be liable for the tax. Earned income tax credit Child's expenses. Earned income tax credit   Deductions for payments that are made out of a child's earnings are the child's, even if the payments are made by the parent. Earned income tax credit Example. Earned income tax credit You made payments on your child's behalf that are deductible as a business expense and a charitable contribution. Earned income tax credit You made the payments out of your child's earnings. Earned income tax credit These items can be deducted only on the child's return. Earned income tax credit Standard Deduction The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to the larger of: $1,000, or The individual's earned income plus $350, but not more than the regular standard deduction (generally $6,100). Earned income tax credit However, the standard deduction may be higher for a dependent who: Is 65 or older, or Is blind. Earned income tax credit Certain dependents cannot claim any standard deduction. Earned income tax credit See Standard Deduction of Zero , later. Earned income tax credit Worksheet 1. Earned income tax credit   Use Worksheet 1 to figure the dependent's standard deduction. Earned income tax credit Worksheet 1. Earned income tax credit Standard Deduction Worksheet for Dependents Use this worksheet only if someone else can claim you (or your spouse, if filing jointly) as a dependent. Earned income tax credit If you were 65 or older and/or blind, check the correct number of boxes below. Earned income tax credit Put the total number of boxes checked in box c and go to line 1. Earned income tax credit a. Earned income tax credit You 65 or older   Blind   b. Earned income tax credit Your spouse, if claiming  spouse's exemption 65 or older   Blind   c. Earned income tax credit Total boxes checked         1. Earned income tax credit Enter your earned income (defined below) plus $350. Earned income tax credit If none, enter -0-. Earned income tax credit 1. Earned income tax credit     2. Earned income tax credit Minimum amount. Earned income tax credit   2. Earned income tax credit $1,000   3. Earned income tax credit Compare lines 1 and 2. Earned income tax credit Enter the larger of the two amounts here. Earned income tax credit 3. Earned income tax credit     4. Earned income tax credit Enter on line 4 the amount shown below for your filing status. Earned income tax credit       Single or Married filing separately—$6,100 Married filing jointly—$12,200 Head of household—$8,950 4. Earned income tax credit     5. Earned income tax credit Standard deduction. Earned income tax credit         a. Earned income tax credit Compare lines 3 and 4. Earned income tax credit Enter the smaller amount here. Earned income tax credit If under 65 and not blind, stop here. Earned income tax credit This is your standard deduction. Earned income tax credit Otherwise, go on to line 5b. Earned income tax credit 5a. Earned income tax credit     b. Earned income tax credit If 65 or older or blind, multiply $1,500 ($1,200 if married) by the number in box c above. Earned income tax credit Enter the result here. Earned income tax credit 5b. Earned income tax credit     c. Earned income tax credit Add lines 5a and 5b. Earned income tax credit This is your standard deduction for 2013. Earned income tax credit 5c. Earned income tax credit     Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Earned income tax credit It also includes any amount received as a scholarship that you must include in income. Earned income tax credit   Example 1. Earned income tax credit Michael is single, age 15, and not blind. Earned income tax credit His parents can claim him as a dependent on their tax return. Earned income tax credit He has taxable interest income of $800 and wages of $150. Earned income tax credit He enters $500 (his earned income plus $350) on line 1 of Worksheet 1. Earned income tax credit On line 3, he enters $1,000, the larger of $500 or $1,000. Earned income tax credit Michael enters $6,100 on line 4. Earned income tax credit On line 5a, he enters $1,000, the smaller of $1,000 or $6,100. Earned income tax credit His standard deduction is $1,000. Earned income tax credit Example 2. Earned income tax credit Judy, a full-time student, is single, age 22, and not blind. Earned income tax credit Her parents can claim her as a dependent on their tax return. Earned income tax credit She has dividend income of $275 and wages of $2,500. Earned income tax credit She enters $2,850 (her earned income plus $350) on line 1 of Worksheet 1. Earned income tax credit On line 3, she enters $2,850, the larger of $2,850 or $1,000. Earned income tax credit She enters $6,100 on line 4. Earned income tax credit On line 5a, she enters $2,850 (the smaller of $2,850 or $6,100) as her standard deduction. Earned income tax credit Example 3. Earned income tax credit Amy, who is single, is claimed as a dependent on her parents' tax return. Earned income tax credit She is 18 years old and blind. Earned income tax credit She has taxable interest income of $1,000 and wages of $2,000. Earned income tax credit She enters $2,350 (her earned income plus $350) on line 1 of Worksheet 1. Earned income tax credit She enters $2,350 (the larger of $2,350 or $1,000) on line 3, $6,100 on line 4, and $2,350 (the smaller of $2,350 or $6,100) on line 5a. Earned income tax credit Because Amy is blind, she checks the box for blindness and enters “1” in box c at the top of Worksheet 1. Earned income tax credit She enters $1,500 (the number in box c times $1,500) on line 5b. Earned income tax credit Her standard deduction on line 5c is $3,850 ($2,350 + $1,500). Earned income tax credit Standard Deduction of Zero The standard deduction for the following dependents is zero. Earned income tax credit A married dependent filing a separate return whose spouse itemizes deductions. Earned income tax credit A dependent who files a return for a period of less than 12 months due to a change in his or her annual accounting period. Earned income tax credit A nonresident or dual-status alien dependent, unless the dependent is married to a U. Earned income tax credit S. Earned income tax credit citizen or resident alien at the end of the year and chooses to be treated as a U. Earned income tax credit S. Earned income tax credit resident for the year. Earned income tax credit See Publication 519, U. Earned income tax credit S. Earned income tax credit Tax Guide for Aliens, for information on making this choice. Earned income tax credit Example. Earned income tax credit Jennifer, who is a dependent of her parents, is entitled to file a joint return with her husband. Earned income tax credit However, her husband elects to file a separate return and itemize his deductions. Earned income tax credit Because he itemizes, Jennifer's standard deduction on her return is zero. Earned income tax credit She can, however, itemize any of her allowable deductions. Earned income tax credit Dependent's Own Exemption A person who can be claimed as a dependent on another taxpayer's return cannot claim his or her own exemption. Earned income tax credit This is true even if the other taxpayer does not actually claim the exemption. Earned income tax credit Example. Earned income tax credit James and Barbara can claim their child, Ben, as a dependent on their return. Earned income tax credit Ben is a college student who works during the summer and must file a tax return. Earned income tax credit Ben cannot claim his own exemption on his return. Earned income tax credit This is true even if James and Barbara do not claim him as a dependent on their return. Earned income tax credit Withholding From Wages Employers generally withhold federal income tax, social security tax, and Medicare tax from an employee's wages. Earned income tax credit If the employee claims exemption from withholding on Form W-4, the employer will not withhold federal income tax. Earned income tax credit The exemption from withholding does not apply to social security and Medicare taxes. Earned income tax credit Conditions for exemption from withholding. Earned income tax credit   An employee can claim exemption from withholding for 2014 only if he or she meets both of the following conditions. Earned income tax credit For 2013, the employee had a right to a refund of all federal income tax withheld because he or she had no tax liability. Earned income tax credit For 2014, the employee expects a refund of all federal income tax withheld because he or she expects to have no tax liability. Earned income tax credit Dependents. Earned income tax credit   An employee who is a dependent ordinarily cannot claim exemption from withholding if both of the following are true. Earned income tax credit The employee's gross income will be more than $1,000, the minimum standard deduction for 2014. Earned income tax credit The employee's unearned income will be more than $350. Earned income tax credit Exceptions. Earned income tax credit   An employee may be able to claim exemption from withholding even if the employee is a dependent, if the employee: Is age 65 or older, Is blind, or Will claim on his or her 2014 tax return: Adjustments to income, Tax credits, or Itemized deductions. Earned income tax credit The above exceptions do not apply to supplemental wages greater than $1,000,000. Earned income tax credit For more information, see Exemption From Withholding in chapter 1 of Publication 505. Earned income tax credit Example. Earned income tax credit Guy is 17 and a student. Earned income tax credit During the summer he works part time at a grocery store. Earned income tax credit He expects to earn about $1,200 this year. Earned income tax credit He also worked at the store last summer and received a refund of all his withheld income tax because he did not have a tax liability. Earned income tax credit The only other income he expects during the year is $375 interest on a savings account. Earned income tax credit He expects that his parents will be able to claim him as a dependent on their tax return. Earned income tax credit He is not blind and will not claim adjustments to income, itemized deductions, a higher standard deduction, or tax credits on his return. Earned income tax credit Guy cannot claim exemption from withholding when he fills out Form W-4 because his parents will be able to claim him as a dependent, his gross income will be more than $1,000 (the minimum standard deduction amount) and his unearned income will be more than $350. Earned income tax credit Claiming exemption from withholding. Earned income tax credit    To claim exemption from withholding, an employee must enter “Exempt” in the space provided on Form W-4, line 7. Earned income tax credit The employee must complete the rest of the form, as explained in the form instructions, and give it to his or her employer. Earned income tax credit Renewing an exemption from withholding. Earned income tax credit   An exemption from withholding is good for only one year. Earned income tax credit An employee must file a new Form W-4 by February 15 each year to continue the exemption. Earned income tax credit Part 2. Earned income tax credit Tax on Unearned Income of Certain Children The two rules that follow may affect the tax on the unearned income of certain children. Earned income tax credit If the child's interest and dividend income (including capital gain distributions) total less than $10,000, the child's parent may be able to choose to include that income on the parent's return rather than file a return for the child. Earned income tax credit (See Parent's Election To Report Child's Interest and Dividends , later. Earned income tax credit ) If the child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Earned income tax credit (See Tax for Certain Children Who Have Unearned Income , later. Earned income tax credit ) For these rules, the term “child” includes a legally adopted child and a stepchild. Earned income tax credit These rules apply whether or not the child is a dependent. Earned income tax credit These rules do not apply if neither of the child's parents were living at the end of the year. Earned income tax credit Which Parent's Return To Use If a child's parents are married to each other and file a joint return, use the joint return to figure the tax on the child's unearned income. Earned income tax credit The tax rate and other return information from that return are used to figure the child's tax as explained later under Tax for Certain Children Who Have Unearned Income . Earned income tax credit Parents Who Do Not File a Joint Return For parents who do not file a joint return, the following discussions explain which parent's tax return must be used to figure the tax. Earned income tax credit Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends . Earned income tax credit Parents are married. Earned income tax credit   If the child's parents file separate returns, use the return of the parent with the greater taxable income. Earned income tax credit Parents not living together. Earned income tax credit   If the child's parents are married to each other but not living together, and the parent with whom the child lives (the custodial parent) is considered unmarried, use the return of the custodial parent. Earned income tax credit If the custodial parent is not considered unmarried, use the return of the parent with the greater taxable income. Earned income tax credit   For an explanation of when a married person living apart from his or her spouse is considered unmarried, see Head of Household in Publication 501. Earned income tax credit Parents are divorced. Earned income tax credit   If the child's parents are divorced or legally separated, and the parent who had custody of the child for the greater part of the year (the custodial parent) has not remarried, use the return of the custodial parent. Earned income tax credit Custodial parent remarried. Earned income tax credit   If the custodial parent has remarried, the stepparent (rather than the noncustodial parent) is treated as the child's other parent. Earned income tax credit Therefore, if the custodial parent and the stepparent file a joint return, use that joint return. Earned income tax credit Do not use the return of the noncustodial parent. Earned income tax credit   If the custodial parent and the stepparent are married, but file separate returns, use the return of the one with the greater taxable income. Earned income tax credit If the custodial parent and the stepparent are married but not living together, the earlier discussion under Parents not living together applies. Earned income tax credit Parents never married. Earned income tax credit   If a child's parents have never been married to each other, but lived together all year, use the return of the parent with the greater taxable income. Earned income tax credit If the parents did not live together all year, the rules explained earlier under Parents are divorced apply. Earned income tax credit Widowed parent remarried. Earned income tax credit   If a widow or widower remarries, the new spouse is treated as the child's other parent. Earned income tax credit The rules explained earlier under Custodial parent remarried apply. Earned income tax credit Parent's Election To Report Child's Interest and Dividends You may be able to elect to include your child's interest and dividend income (including capital gain distributions) on your tax return. Earned income tax credit If you do, your child will not have to file a return. Earned income tax credit You can make this election only if all the following conditions are met. Earned income tax credit Your child was under age 19 (or under age 24 if a full-time student) at the end of the year. Earned income tax credit Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends). Earned income tax credit The child's gross income was less than $10,000. Earned income tax credit The child is required to file a return unless you make this election. Earned income tax credit The child does not file a joint return for the year. Earned income tax credit No estimated tax payment was made for the year, and no overpayment from the previous year (or from any amended return) was applied to this year under your child's name and social security number. Earned income tax credit No federal income tax was withheld from your child's income under the backup withholding rules. Earned income tax credit You are the parent whose return must be used when applying the special tax rules for children. Earned income tax credit (See Which Parent's Return To Use , earlier. Earned income tax credit ) These conditions are also shown in Figure 1. Earned income tax credit Certain January 1 birthdays. Earned income tax credit   A child born on January 1, 1995, is considered to be age 19 at the end of 2013. Earned income tax credit You cannot make this election for such a child unless the child was a full-time student. Earned income tax credit   A child born on January 1, 1990, is considered to be age 24 at the end of 2013. Earned income tax credit You cannot make this election for such a child. Earned income tax credit How to make the election. Earned income tax credit    Make the election by attaching Form 8814 to your Form 1040 or Form 1040NR. Earned income tax credit (If you make this election, you cannot file Form 1040A or Form 1040EZ. Earned income tax credit ) Attach a separate Form 8814 for each child for whom you make the election. Earned income tax credit You can make the election for one or more children and not for others. Earned income tax credit Effect of Making the Election The federal income tax on your child's income may be more if you make the Form 8814 election. Earned income tax credit Rate may be higher. Earned income tax credit   If your child received qualified dividends or capital gain distributions, you may pay up to $100 more tax if you make this election instead of filing a separate tax return for the child. Earned income tax credit This is because the tax rate on the child's income between $1,000 and $2,000 is 10% if you make this election. Earned income tax credit However, if you file a separate return for the child, the tax rate may be as low as 0% (zero percent) because of the preferential tax rates for qualified dividends and capital gain distributions. Earned income tax credit Deductions you cannot take. Earned income tax credit   By making the Form 8814 election, you cannot take any of the following deductions that the child would be entitled to on his or her return. Earned income tax credit The additional standard deduction if the child is blind. Earned income tax credit The deduction for a penalty on an early withdrawal of your child's savings. Earned income tax credit Itemized deductions (such as your child's investment expenses or charitable contributions). Earned income tax credit Figure 1. Earned income tax credit Can You Include Your Child's Income On Your Tax Return? Please click here for the text description of the image. Earned income tax credit Figure 1. Earned income tax credit Can You Include Your Child's Income On Your Tax Return? Deductible investment interest. Earned income tax credit   If you use Form 8814, your child's unearned income is considered your unearned income. Earned income tax credit To figure the limit on your deductible investment interest, add the child's unearned income to yours. Earned income tax credit However, if your child received qualified dividends, capital gain distributions, or Alaska Permanent Fund dividends, see chapter 3 of Publication 550 for information about how to figure the limit. Earned income tax credit Alternative minimum tax. Earned income tax credit    If your child received tax-exempt interest (or exempt-interest dividends paid by a regulated investment company) from certain private activity bonds, you must determine if that interest is a tax preference item for alternative minimum tax (AMT) purposes. Earned income tax credit If it is, you must include it with your own tax preference items when figuring your AMT. Earned income tax credit See Form 6251, Alternative Minimum Tax—Individuals, and its instructions for details. Earned income tax credit Reduced deductions or credits. Earned income tax credit   If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return, including the following. Earned income tax credit Deduction for contributions to a traditional individual retirement arrangement (IRA). Earned income tax credit Deduction for student loan interest. Earned income tax credit Itemized deductions for medical expenses, casualty and theft losses, and certain miscellaneous expenses. Earned income tax credit Credit for child and dependent care expenses. Earned income tax credit Child tax credit. Earned income tax credit Education tax credits. Earned income tax credit Earned income credit. Earned income tax credit Penalty for underpayment of estimated tax. Earned income tax credit   If you make this election for 2013 and did not have enough tax withheld or pay enough estimated tax to cover the tax you owe, you may be subject to a penalty. Earned income tax credit If you plan to make this election for 2014, you may need to increase your federal income tax withholding or your estimated tax payments to avoid the penalty. Earned income tax credit Get Publication 505 for more information. Earned income tax credit Figuring Child's Income Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. Earned income tax credit Only the amount over $2,000 is added to your income. Earned income tax credit The amount over $2,000 is shown on Form 8814, line 6. Earned income tax credit Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. Earned income tax credit Include the amount from Form 8814, line 12, on Form 1040 or Form 1040NR, line 21. Earned income tax credit If you file more than one Form 8814, include the total amounts from line 12 of all your Forms 8814 on Form 1040 or Form 1040NR, line 21. Earned income tax credit On the dotted line next to line 21, enter “Form 8814” and the total of the Form 8814, line 12 amounts. Earned income tax credit Note. Earned income tax credit The tax on the first $2,000 is figured on Form 8814, Part II. Earned income tax credit See Figuring Additional Tax , later. Earned income tax credit Qualified dividends. Earned income tax credit   Enter on Form 8814, line 2a, any ordinary dividends your child received. Earned income tax credit This amount may include qualified dividends. Earned income tax credit Qualified dividends are those dividends reported on Form 1040, line 9b, or Form 1040NR, line 10b, and are eligible for lower tax rates that apply to a net capital gain. Earned income tax credit For detailed information about qualified dividends, see Publication 550. Earned income tax credit   If your child received qualified dividends, the amount of these dividends that is added to your income must be reported on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Earned income tax credit You do not include these dividends on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. Earned income tax credit   Enter the child's qualified dividends on Form 8814, line 2b. Earned income tax credit But do not include this amount on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Earned income tax credit Instead, include the amount from Form 8814, line 9, on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Earned income tax credit (The amount on Form 8814, line 9, may be less than the amount on Form 8814, line 2b, because lines 7 through 12 of the form divide the $2,000 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts. Earned income tax credit ) Capital gain distributions. Earned income tax credit   Enter on Form 8814, line 3, any capital gain distributions your child received. Earned income tax credit The amount of these distributions that is added to your income must be reported on Schedule D (Form 1040), line 13, or, if you are not required to file Schedule D, on Form 1040, line 13, or Form 1040NR, line 14. Earned income tax credit You do not include it on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. Earned income tax credit   Include the amount from Form 8814, line 10, on Schedule D, line 13; Form 1040, line 13; or Form 1040NR, line 14, whichever applies. Earned income tax credit (The amount on Form 8814, line 10, may be less than the amount on Form 8814, line 3, because lines 7 through 12 of the form divide the $2,000 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts. Earned income tax credit ) Collectibles (28% rate) gain. Earned income tax credit    If any of the child's capital gain distributions are reported on Form 1099-DIV as collectibles (28% rate) gain, you must determine how much to also include on line 4 of the 28% Rate Gain Worksheet, in the instructions for Schedule D, line 18. Earned income tax credit Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Earned income tax credit The numerator is the part of the child's total capital gain distribution that is collectibles (28% rate) gain. Earned income tax credit The denominator is the child's total capital gain distribution. Earned income tax credit Enter the result on line 4 of the 28% Rate Gain Worksheet. Earned income tax credit Unrecaptured section 1250 gain. Earned income tax credit   If any of the child's capital gain distributions are reported on Form 1099-DIV as unrecaptured section 1250 gain, you must determine how much to include on line 11 of the Unrecaptured Section 1250 Gain Worksheet in the instructions for Schedule D, line 19. Earned income tax credit Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Earned income tax credit The numerator is the part of the child's total capital gain distribution that is unrecaptured section 1250 gain. Earned income tax credit The denominator is the child's total capital gain distribution. Earned income tax credit Enter the result on the Unrecaptured Section 1250 Gain Worksheet, line 11. Earned income tax credit Section 1202 gain. Earned income tax credit   If any of the child's capital gain distributions are reported as section 1202 gain (gain on qualified small business stock) on Form 1099-DIV, part or all of that gain may be eligible for the section 1202 exclusion. Earned income tax credit (For information about the exclusion, see chapter 4 of Publication 550. Earned income tax credit ) To figure that part, multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Earned income tax credit The numerator is the part of the child's total capital gain distribution that is section 1202 gain. Earned income tax credit The denominator is the child's total capital gain distribution. Earned income tax credit Your section 1202 exclusion is generally 50% of the result, but may be subject to a limit. Earned income tax credit In some cases, the exclusion is more than 50%. Earned income tax credit See the instructions for Schedule D for details and information on how to report the exclusion amount. Earned income tax credit Example. Earned income tax credit Fred is 6 years old. Earned income tax credit In 2013, he received dividend income of $2,100, which included $1,575 of ordinary dividends and a $525 capital gain distribution from a mutual fund. Earned income tax credit (None of the distributions were reported on Form 1099-DIV as unrecaptured section 1250 gain, section 1202 gain, or collectibles (28% rate) gain. Earned income tax credit ) All of the ordinary dividends are qualified dividends. Earned income tax credit He has no other income and is not subject to backup withholding. Earned income tax credit No estimated tax payments were made under his name and social security number. Earned income tax credit Fred's parents elect to include Fred's income on their tax return instead of filing a return for him. Earned income tax credit They figure the amount to report on Form 1040, lines 9a and 9b, the amount to report on their Schedule D, line 13, and the amount to report on Form 1040, line 21, as follows. Earned income tax credit They leave lines 1a and 1b of Form 8814 blank because Fred does not have any interest income. Earned income tax credit They enter his ordinary dividends of $1,575 on lines 2a and 2b because all of Fred's ordinary dividends are qualified dividends. Earned income tax credit They enter the amount of Fred's capital gain distributions, $525, on line 3. Earned income tax credit Next, they add the amounts on lines 1a, 2a, and 3 and enter the result, $2,100, on line 4. Earned income tax credit They subtract the base amount on line 5, $2,000, from the amount on line 4, $2,100, and enter the result, $100, on line 6. Earned income tax credit This is the total amount from Form 8814 to be reported on their return. Earned income tax credit Next, they figure how much of this amount is qualified dividends and how much is capital gain distributions. Earned income tax credit They divide the amount on line 2b, $1,575, by the amount on line 4, $2,100. Earned income tax credit They enter the result, . Earned income tax credit 75, on line 7. Earned income tax credit They divide the amount on line 3, $525, by the amount on line 4, $2,100. Earned income tax credit They enter the result, . Earned income tax credit 25, on line 8. Earned income tax credit They multiply the amount on line 6, $100, by the decimal on line 7, . Earned income tax credit 75, and enter the result, $75, on line 9. Earned income tax credit They multiply the amount on line 6, $100, by the decimal on line 8, . Earned income tax credit 25, and enter the result, $25, on line 10. Earned income tax credit They include the amount from line 9, $75, on lines 9a and 9b of their Form 1040 and enter “Form 8814 – $75” on the dotted lines next to lines 9a and 9b. Earned income tax credit They include the amount from line 10, $25, on line 13 of their Schedule D (Form 1040) and enter “Form 8814 – $25” on the dotted line next to Schedule D, line 13. Earned income tax credit They enter $100 ($75 + $25) on line 11 and -0- ($100 – $100) on line 12. Earned income tax credit Because the amount on line 12 is -0-, they do not include any amount from Form 8814 on their Form 1040, line 21. Earned income tax credit Figuring Additional Tax Use Form 8814, Part II, to figure the tax on the $2,000 of your child's interest and dividends that you do not include in your income. Earned income tax credit This tax is added to the tax figured on your income. Earned income tax credit This additional tax is the smaller of: 10% x (your child's gross income − $1,000), or $100. Earned income tax credit Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 44, or Form 1040NR, line 42. Earned income tax credit Check box a on Form 1040, line 44, or Form 1040NR, line 42. Earned income tax credit Tax for Certain Children Who Have Unearned Income If a child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Earned income tax credit If the parent does not or cannot choose to include the child's income on the parent's return, use Form 8615 to figure the child's tax. Earned income tax credit Attach the completed form to the child's Form 1040, Form 1040A, or Form 1040NR. Earned income tax credit When Form 8615 must be filed. Earned income tax credit   Form 8615 must be filed for a child if all of the following statements are true. Earned income tax credit The child's unearned income was more than $2,000. Earned income tax credit The child is required to file a return for 2013. Earned income tax credit The child either: Was under age 18 at the end of the year, Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or Was over age 18 and under age 24 at the end of the year, was a full-time student, and did not have earned income that was more than half of his or her support. Earned income tax credit At least one of the child's parents was alive at the end of 2013. Earned income tax credit The child does not file a joint return for 2013. Earned income tax credit These conditions are also shown in Figure 2. Earned income tax credit Certain January 1 birthdays. Earned income tax credit   Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed. Earned income tax credit IF a child was born on. Earned income tax credit . Earned income tax credit . Earned income tax credit THEN, at the end of 2013, the child is considered to be. Earned income tax credit . Earned income tax credit . Earned income tax credit January 1, 1996 18* January 1, 1995 19** January 1, 1990 24*** *This child is not under age 18. Earned income tax credit The child meets condition 3 only if the child did not have earned income that was more than half of the child's support. Earned income tax credit  **This child meets condition 3 only if the child was a full-time student who did not have earned income that was more than half of the child's support. Earned income tax credit  ***Do not use Form 8615 for this child. Earned income tax credit Figure 2. Earned income tax credit Do You Have To Use Form 8615 To Figure Your Child's Tax? Please click here for the text description of the image. Earned income tax credit Figure 2. Earned income tax credit Do You Have To Use Form 8615 To Figure Your Child's Tax? Providing Parental Information (Form 8615, Lines A–C) On Form 8615, lines A and B, enter the parent's name and social security number. Earned income tax credit (If the parents filed a joint return, enter the name and social security number listed first on the joint return. Earned income tax credit ) On line C, check the box for the parent's filing status. Earned income tax credit See Which Parent's Return To Use, earlier, for information on which parent's return information must be used on Form 8615. Earned income tax credit Parent with different tax year. Earned income tax credit   If the parent and the child do not have the same tax year, complete Form 8615 using the information on the parent's return for the tax year that ends in the child's tax year. Earned income tax credit Example. Earned income tax credit Kimberly must use her mother's tax and taxable income to complete her Form 8615 for calendar year 2013 (January 1 – December 31). Earned income tax credit Kimberly's mother files her tax return on a fiscal year basis (July 1 – June 30). Earned income tax credit Kimberly must use the information on her mother's return for the tax year ending June 30, 2013, to complete her 2013 Form 8615. Earned income tax credit Parent's return information not known timely. Earned income tax credit   If the information needed from the parent's return is not known by the time the child's return is due (usually April 15), you can file the return using estimates. Earned income tax credit   You can use any reasonable estimate. Earned income tax credit This includes using information from last year's return. Earned income tax credit If you use an estimated amount on Form 8615, enter “Estimated” on the line next to the amount. Earned income tax credit   When you get the correct information, file an amended return on Form 1040X, Amended U. Earned income tax credit S. Earned income tax credit Individual Income Tax Return. Earned income tax credit Extension of time to file. Earned income tax credit   Instead of using estimates, you can get an automatic 6-month extension of time to file if, by the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U. Earned income tax credit S. Earned income tax credit Individual Income Tax Return. Earned income tax credit See the instructions for Form 4868 for details. Earned income tax credit    An extension of time to file is not an extension of time to pay. Earned income tax credit You must make an accurate estimate of the tax for 2013. Earned income tax credit If you do not pay the full amount due by the regular due date, the child will owe interest and may also be charged penalties. Earned income tax credit See Form 4868 and its instructions. Earned income tax credit Parent's return information not available. Earned income tax credit   If a child cannot get the required information about his or her parent's tax return, the child (or the child's legal representative) can request the necessary information from the Internal Revenue Service (IRS). Earned income tax credit How to request. Earned income tax credit   After the end of the tax year, send a signed, written request for the information to the Internal Revenue Service Center where the parent's return will be filed. Earned income tax credit (The IRS cannot process a request received before the end of the tax year. Earned income tax credit )    You should also consider getting an extension of time to file the child's return, because there may be a delay in getting the requested information. Earned income tax credit   The request must contain all of the following. Earned income tax credit A statement that you are making the request to comply with section 1(g) of the Internal Revenue Code and that you have tried to get the information from the parent. Earned income tax credit Proof of the child's age (for example, a copy of the child's birth certificate). Earned income tax credit Evidence the child has more than $2,000 of unearned income (for example, a copy of the child's prior year tax return or copies of Forms 1099 for the current year). Earned income tax credit The name, address, social security number (if known), and filing status (if known) of the parent whose information is to be shown on Form 8615. Earned income tax credit    A child's legal representative making the request should include a copy of his or her Power of Attorney, such as Form 2848, or proof of legal guardianship. Earned income tax credit Step 1. Earned income tax credit Figuring the Child's Net Unearned Income (Form 8615, Part I) The first step in figuring a child's tax using Form 8615 is to figure the child's net unearned income. Earned income tax credit To do that, use Form 8615, Part I. Earned income tax credit Line 1 (Unearned Income) If the child had no earned income, enter on this line the adjusted gross income shown on the child's return. Earned income tax credit Adjusted gross income is shown on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37. Earned income tax credit Form 1040EZ and Form 1040NR-EZ cannot be used if Form 8615 must be filed. Earned income tax credit If the child had earned income, figure the amount to enter on Form 8615, line 1, by using the worksheet in the instructions for the form. Earned income tax credit However, use the following worksheet if: the child has excluded any foreign earned income, deducted a loss from self-employment, or has a net operating loss from another year. Earned income tax credit Alternate Worksheet for Form 8615, Line 1 A. Earned income tax credit Enter the amount from the child's Form 1040, line 22, or Form 1040NR, line 23   B. Earned income tax credit Enter the total of any net loss  from self-employment, any net operating loss deduction, any foreign earned income exclusion, and any foreign housing exclusion from the child's Form 1040 or Form 1040NR. Earned income tax credit Enter this total as a positive number (greater than zero)   C. Earned income tax credit Add line A and line B and  enter the total   D. Earned income tax credit Enter the child's earned income plus any amount from the child's Form 1040, line 30, or the child's Form 1040NR, line 30     Generally, the child's earned income is the total of the amounts reported on Form 1040, lines 7, 12, and 18 (if line 12 or 18 is a loss, use zero) or Form 1040NR, lines 8, 13, and 19 (if line 13 or 19 is a loss, use zero)   E. Earned income tax credit Subtract line D from line C. Earned income tax credit Enter the result here and on Form 8615, line 1   Unearned income defined. Earned income tax credit   Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually performed. Earned income tax credit It includes taxable interest, dividends, capital gains (including capital gain distributions), the taxable part of social security and pension payments, certain distributions from trusts, and unemployment compensation. Earned income tax credit Unearned income includes amounts produced by assets the child obtained with earned income (such as interest on a savings account into which the child deposited wages). Earned income tax credit Nontaxable income. Earned income tax credit   For this purpose, unearned income includes only amounts the child must include in gross income. Earned income tax credit Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, is not included. Earned income tax credit Capital loss. Earned income tax credit   A child's capital losses are taken into account in figuring the child's unearned income. Earned income tax credit Capital losses are first applied against capital gains. Earned income tax credit If the capital losses are more than the capital gains, the difference (up to $3,000) is subtracted from the child's interest, dividends, and other unearned income. Earned income tax credit Any difference over $3,000 is carried to the next year. Earned income tax credit Income from property received as a gift. Earned income tax credit   A child's unearned income includes all income produced by property belonging to the child. Earned income tax credit This is true even if the property was transferred to the child, regardless of when the property was transferred or purchased or who transferred it. Earned income tax credit   A child's unearned income includes income produced by property given as a gift to the child. Earned income tax credit This includes gifts to the child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act. Earned income tax credit Example. Earned income tax credit Amanda Black, age 13, received the following income. Earned income tax credit Dividends—$800 Wages—$2,100 Taxable interest—$1,200 Tax-exempt interest—$100 Capital gains—$300 Capital losses—($200) The dividends were qualified dividends on stock given to her by her grandparents. Earned income tax credit Amanda's unearned income is $2,100. Earned income tax credit This is the total of the dividends ($800), taxable interest ($1,200), and capital gains reduced by capital losses ($300 − $200 = $100). Earned income tax credit Her wages are earned (not unearned) income because they are received for work actually performed. Earned income tax credit Her tax-exempt interest is not included because it is nontaxable. Earned income tax credit Trust income. Earned income tax credit   If a child is the beneficiary of a trust, distributions of taxable interest, dividends, capital gains, and other unearned income from the trust are unearned income to the child. Earned income tax credit   However, taxable distributions from a qualified disability trust are considered earned income for the purposes of completing Form 8615. Earned income tax credit See the Form 8615 instructions for details. Earned income tax credit Adjustment to income. Earned income tax credit   In figuring the amount to enter on line 1, the child's unearned income is reduced by any penalty on the early withdrawal of savings. Earned income tax credit Line 2 (Deductions) If the child does not itemize deductions on Schedule A (Form 1040 or Form 1040NR), enter $2,000 on line 2. Earned income tax credit If the child itemizes deductions, enter on line 2 the larger of: $1,000 plus the portion of the child's itemized deductions on Schedule A (Form 1040), line 29 (or Schedule A (Form 1040NR), line 15), that are directly connected with the production of the unearned income entered on line 1, or $2,000. Earned income tax credit Directly connected. Earned income tax credit   Itemized deductions are directly connected with the production of unearned income if they are for expenses paid to produce or collect taxable income or to manage, conserve, or maintain property held for producing income. Earned income tax credit These expenses include custodian fees and service charges, service fees to collect taxable interest and dividends, and certain investment counsel fees. Earned income tax credit    These expenses are added to certain other miscellaneous itemized deductions on Schedule A (Form 1040). Earned income tax credit Only the amount greater than 2% of the child's adjusted gross income can be deducted. Earned income tax credit See Publication 529, Miscellaneous Deductions, for more information. Earned income tax credit Example 1. Earned income tax credit Roger, age 12, has unearned income of $8,000, no other income, no adjustments to income, and itemized deductions of $300 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with his unearned income. Earned income tax credit His adjusted gross income is $8,000, which is entered on Form 1040, line 38, and on Form 8615, line 1. Earned income tax credit Roger enters $2,000 on line 2 because that is more than the total of $1,000 plus his directly-connected itemized deductions of $300. Earned income tax credit Example 2. Earned income tax credit Eleanor, age 8, has unearned income of $16,000 and an early withdrawal penalty of $100. Earned income tax credit She has no other income. Earned income tax credit She has itemized deductions of $1,050 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with the production of her unearned income. Earned income tax credit Her adjusted gross income, entered on line 1, is $15,900 ($16,000 − $100). Earned income tax credit The amount on line 2 is $2,050. Earned income tax credit This is the larger of: $1,000 plus the $1,050 of directly connected itemized deductions, or $2,000. Earned income tax credit Line 3 Subtract line 2 from line 1 and enter the result on this line. Earned income tax credit If zero or less, do not complete the rest of the form. Earned income tax credit However, you must still attach Form 8615 to the child's tax return. Earned income tax credit Figure the tax on the child's taxable income in the normal manner. Earned income tax credit Line 4 (Child's Taxable Income) Enter on line 4 the child's taxable income from Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41. Earned income tax credit Child files Form 2555 or 2555-EZ. Earned income tax credit   If the child files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) is used to figure the child's tax. Earned income tax credit Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the child's taxable income on Form 8615, line 4. Earned income tax credit Line 5 (Net Unearned Income) A child's net unearned income cannot be more than his or her taxable income. Earned income tax credit Enter on Form 8615, line 5, the smaller of line 3 or line 4. Earned income tax credit This is the child's net unearned income. Earned income tax credit If zero or less, do not complete the rest of the form. Earned income tax credit However, you must still attach Form 8615 to the child's tax return. Earned income tax credit Figure the tax on the child's taxable income in the normal manner. Earned income tax credit Step 2. Earned income tax credit Figuring a Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) The next step in completing Form 8615 is to figure a tentative tax on the child's net unearned income at the parent's tax rate. Earned income tax credit The tentative tax at the parent's tax rate is the difference between the tax on the parent's taxable income figured with the child's net unearned income (plus the net unearned income of any other child whose Form 8615 includes the tax return information of that parent) and the tax figured without it. Earned income tax credit When figuring the tentative tax at the parent's tax rate on Form 8615, do not refigure any of the exclusions, deductions, or credits on the parent's return because of the child's net unearned income. Earned income tax credit For example, do not refigure the medical expense deduction. Earned income tax credit Figure the tentative tax on Form 8615, lines 6 through 13. Earned income tax credit Line 6 (Parent's Taxable Income) Enter on line 6 the amount from the parent's Form 1040, line 43; Form 1040A, line 27; Form 1040EZ, line 6; Form 1040NR, line 41; or Form 1040NR-EZ, line 14. Earned income tax credit If the parent's taxable income is zero or less, enter zero on line 6. Earned income tax credit Parent files Form 2555 or 2555-EZ. Earned income tax credit   If the parent files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet in the Form 1040 instructions is used to figure the parent's tax. Earned income tax credit Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the parent's taxable income, on line 6 of Form 8615. Earned income tax credit Line 7 (Net Unearned Income of Other Children) If the tax return information of the parent is also used on any other child's Form 8615, enter on line 7 the total of the amounts from line 5 of all the other children's Forms 8615. Earned income tax credit Do not include the amount from line 5 of the Form 8615 being completed. Earned income tax credit (The term “other child” means any other child whose Form 8615 uses the tax information of the parent identified on Lines A and B of Form 8615. Earned income tax credit ) Example. Earned income tax credit Paul and Jane Persimmon have three children, Sharon, Jerry, and Mike, who must attach Form 8615 to their tax returns. Earned income tax credit The children's net unearned income amounts on line 5 of their Forms 8615 are: Sharon—$800 Jerry—$600 Mike—$1,000 Line 7 of Sharon's Form 8615 will show $1,600, the total of the amounts on line 5 of Jerry's and Mike's Forms 8615. Earned income tax credit Line 7 of Jerry's Form 8615 will show $1,800 ($800 + $1,000). Earned income tax credit Line 7 of Mike's Form 8615 will show $1,400 ($800 + $600). Earned income tax credit Other children's information not available. Earned income tax credit   If the net unearned income of the other children is not available when the return is due, either file the return using estimates or get an extension of time to file. Earned income tax credit Estimates and extensions are discussed earlier under Providing Parental Information (Form 8615, Lines A–C) . Earned income tax credit Line 8 (Parent's Taxable Income Plus Children's Net Unearned Income) Enter on this line the total of lines 5, 6, and 7. Earned income tax credit You must determine the amount of net capital gain and qualified dividends included on this line before completing Form 8615, line 9. Earned income tax credit Net capital gain. Earned income tax credit   Net capital gain is the smaller of the gain, if any, on Schedule D (Form 1040), line 15, or the gain, if any, on Schedule D, line 16. Earned income tax credit If Schedule D is not required, it is the amount on Form 1040, line 13; Form 1040A, line 10; or Form 1040NR, line 14. Earned income tax credit Qualified dividends. Earned income tax credit   Qualified dividends are those dividends reported on line 9b of Form 1040 or Form 1040A, or line 10b of Form 1040NR. Earned income tax credit Net capital gain and qualified dividends on line 8. Earned income tax credit   If neither the child, nor the parent, nor any other child has net capital gain, the net capital gain on line 8 is zero. Earned income tax credit   If neither the child, nor the parent, nor any other child has qualified dividends, the amount of qualified dividends on line 8 is zero. Earned income tax credit   If the child, parent, or any other child has net capital gain, figure the amount of net capital gain included on line 8 by adding together the net capital gain amounts included on lines 5, 6, and 7 of Form 8615. Earned income tax credit   If the child, parent, or any other child has qualified dividends, figure the amount of qualified dividends included on line 8 by adding together the qualified dividend amounts included on lines 5, 6, and 7. Earned income tax credit   Use the instructions for Form 8615, line 8, including the appropriate Line 5 Worksheet, to find these amounts. Earned income tax credit See the instructions for Form 8615 for more details. Earned income tax credit Note. Earned income tax credit The amount of any net capital gain or qualified dividends is not separately reported on line 8. Earned income tax credit It is  needed, however, when figuring the tax on line 9. Earned income tax credit Line 9 (Tax on Parent's Taxable Income Plus Children's Net Unearned Income) Figure the tax on the amount on line 8 using the Tax Table, the Tax Computation Worksheet, the Qualified Dividends and Capital Gain Tax Worksheet (in the Form 1040, 1040A, or 1040NR instructions), the Schedule D Tax Worksheet (in the Schedule D instructions), or Schedule J (Form 1040), as follows. Earned income tax credit If line 8 does not include any net capital gain or qualified dividends, use the Tax Table or Tax Computation Worksheet to figure this tax. Earned income tax credit But if Schedule J, Income Averaging for Farmers and Fishermen, is used to figure the tax on the parent's return, use it to figure this tax. Earned income tax credit If line 8 includes any net capital gain or qualified dividends, use the Qualified Dividends and Capital Gain Tax Worksheet to figure this tax. Earned income tax credit For details, see the instructions for Form 8615, line 9. Earned income tax credit However, if the child, parent, or any other child has 28% rate gain or unrecaptured section 1250 gain, use the Schedule D Tax Worksheet. Earned income tax credit But if Schedule J is used to figure the tax on the parent's return, use it to figure this tax. Earned income tax credit Child files Form 2555 or 2555-EZ. Earned income tax credit   If line 8 includes any net capital gain or qualified dividends and the child, or any other child filing Form 8615, also files Form 2555 or 2555-EZ, use Using the Schedule D Tax Worksheet for line 9 tax, next, to figure the line 9 tax. Earned income tax credit Using the Schedule D Tax Worksheet for line 9 tax. Earned income tax credit    Use the Schedule D Tax Worksheet (in the Schedule D instructions) to figure the line 9 tax on Form 8615 if the child, parent, or any other child has unrecaptured section 1250 gain or 28% rate gain. Earned income tax credit If you must use the Schedule D Tax Worksheet, first complete any Schedule D and any actual Schedule D Tax Worksheet required for the child, parent, or any other child. Earned income tax credit Then figure the line 9 tax using another Schedule D Tax Worksheet. Earned income tax credit (Do not attach this Schedule D Tax Worksheet to the child's return. Earned income tax credit )   Complete this Schedule D Tax Worksheet as follows. Earned income tax credit On line 1, enter the amount from Form 8615, line 8. Earned income tax credit On line 2, enter the qualified dividends included on Form 8615, line 8. Earned income tax credit (See the earlier discussion for line 8. Earned income tax credit ) On line 3, enter the total of the amounts, if any, on line 4g of all Forms 4952 filed by the child, parent, or any other child. Earned income tax credit On line 4, enter the total of the amounts, if any, on line 4e of all Forms 4952 filed by the child, parent, or any other child. Earned income tax credit If applicable, include instead the smaller amount entered on the dotted line next to line 4e. Earned income tax credit On lines 5 and 6, follow the worksheet instructions. Earned income tax credit On line 7, enter the net capital gain included on Form 8615, line 8. Earned income tax credit (See the earlier discussion for line 8. Earned income tax credit ) On lines 8 through 10, follow the worksheet instructions. Earned income tax credit On line 11, enter zero if neither the child, nor the parent, nor any other child has unrecaptured section 1250 gain (Schedule D, line 19) or 28% rate gain (Schedule D, line 18). Earned income tax credit Otherwise, enter the amount of unrecaptured section 1250 gain and 28% rate gain included in the net capital gain on line 8 of Form 8615. Earned income tax credit Figure these amounts as explained later under Figuring unrecaptured section 1250 gain (line 11) and Figuring 28% rate gain (line 11). Earned income tax credit If the Foreign Earned Income Tax Worksheet was used to figure the parent's tax or the tax of any child, go to step 10 below. Earned income tax credit Otherwise, skip steps 10, 11, and 12 below, and go to step 13. Earned income tax credit Determine whether there is a line 8 capital gain excess as follows. Earned income tax credit Add the amounts on line 2 of all Foreign Earned Income Tax Worksheets completed by the parent or any child for whom Form 8615 is filed. Earned income tax credit (But for each child do not add more than the excess, if any, of the amount on line 5 of the child's Form 8615 over the child's taxable income on Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41. Earned income tax credit ) Subtract (a) from the amount on line 1 of this Schedule D Tax Worksheet. Earned income tax credit Subtract (b) from the amount on line 10 of this Schedule D Tax Worksheet. Earned income tax credit If the result is more than zero, that amount is the line 8 capital gain excess. Earned income tax credit If the result is zero or less, there is no line 8 capital gain excess. Earned income tax credit If there is no line 8 capital gain excess, skip step 12 below and go to step 13. Earned income tax credit If there is a line 8 capital gain excess, complete a second Schedule D Tax Worksheet as instructed above and in step 13, but in its entirety and with the following additional modifications. Earned income tax credit (These modifications are to be made only for purposes of filling out this additional Schedule D Tax Worksheet. Earned income tax credit ) Reduce the amount you would otherwise enter on line 9 (but not below zero) by the line 8 capital gain excess. Earned income tax credit Reduce the amount you would otherwise enter on line 6 (but not below zero) by any of the line 8 capital gain excess not used in (a) above. Earned income tax credit If the child, parent, or any other child has 28% rate gain, reduce the amount you would otherwise enter on line 8 of Worksheet 1 for Line 11 of the Schedule D Tax Worksheet – 28% Rate Gain (Line 9 Tax), shown later, (but not below zero) by the line 8 capital gain excess, and refigure the amount on line 11 of this Schedule D Tax Worksheet. Earned income tax credit If the child, parent, or any other child has unrecaptured section 1250 gain, reduce the amount you would otherwise enter on line 8 of Worksheet 2 for Line 11 of the Schedule D Tax Worksheet – Unrecaptured Section 1250 Gain (Line 9 Tax) (but not below zero) by the line 8 capital gain excess not used in 12(c), and refigure the amount on line 11 of this Schedule D Tax Worksheet. Earned income tax credit Complete lines 12 through 45 following the worksheet instructions. Earned income tax credit Use the parent's filing status to complete lines 15, 42, and 44. Earned income tax credit Enter the amount from line 45 of this Schedule D Tax Worksheet on Form 8615, line 9, and check the box on that line