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Federal And State Income Tax Forms

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Federal And State Income Tax Forms

Federal and state income tax forms 1. Federal and state income tax forms   Definitions You Need To Know Table of Contents Other options. Federal and state income tax forms Exception. Federal and state income tax forms Certain terms used in this publication are defined below. Federal and state income tax forms The same term used in another publication may have a slightly different meaning. Federal and state income tax forms Annual additions. Federal and state income tax forms   Annual additions are the total of all your contributions in a year, employee contributions (not including rollovers), and forfeitures allocated to a participant's account. Federal and state income tax forms Annual benefits. Federal and state income tax forms   Annual benefits are the benefits to be paid yearly in the form of a straight life annuity (with no extra benefits) under a plan to which employees do not contribute and under which no rollover contributions are made. Federal and state income tax forms Business. Federal and state income tax forms   A business is an activity in which a profit motive is present and economic activity is involved. Federal and state income tax forms Service as a newspaper carrier under age 18 or as a public official is not a business. Federal and state income tax forms Common-law employee. Federal and state income tax forms   A common-law employee is any individual who, under common law, would have the status of an employee. Federal and state income tax forms A leased employee can also be a common-law employee. Federal and state income tax forms   A common-law employee is a person who performs services for an employer who has the right to control and direct the results of the work and the way in which it is done. Federal and state income tax forms For example, the employer: Provides the employee's tools, materials, and workplace, and Can fire the employee. Federal and state income tax forms   Common-law employees are not self-employed and cannot set up retirement plans for income from their work, even if that income is self-employment income for social security tax purposes. Federal and state income tax forms For example, common-law employees who are ministers, members of religious orders, full-time insurance salespeople, and U. Federal and state income tax forms S. Federal and state income tax forms citizens employed in the United States by foreign governments cannot set up retirement plans for their earnings from those employments, even though their earnings are treated as self-employment income. Federal and state income tax forms   However, an individual may be a common-law employee and a self-employed person as well. Federal and state income tax forms For example, an attorney can be a corporate common-law employee during regular working hours and also practice law in the evening as a self-employed person. Federal and state income tax forms In another example, a minister employed by a congregation for a salary is a common-law employee even though the salary is treated as self-employment income for social security tax purposes. Federal and state income tax forms However, fees reported on Schedule C (Form 1040), Profit or Loss From Business, for performing marriages, baptisms, and other personal services are self-employment earnings for qualified plan purposes. Federal and state income tax forms Compensation. Federal and state income tax forms   Compensation for plan allocations is the pay a participant received from you for personal services for a year. Federal and state income tax forms You can generally define compensation as including all the following payments. Federal and state income tax forms Wages and salaries. Federal and state income tax forms Fees for professional services. Federal and state income tax forms Other amounts received (cash or noncash) for personal services actually rendered by an employee, including, but not limited to, the following items. Federal and state income tax forms Commissions and tips. Federal and state income tax forms Fringe benefits. Federal and state income tax forms Bonuses. Federal and state income tax forms   For a self-employed individual, compensation means the earned income, discussed later, of that individual. Federal and state income tax forms   Compensation generally includes amounts deferred in the following employee benefit plans. Federal and state income tax forms These amounts are elective deferrals. Federal and state income tax forms Qualified cash or deferred arrangement (section 401(k) plan). Federal and state income tax forms Salary reduction agreement to contribute to a tax-sheltered annuity (section 403(b) plan), a SIMPLE IRA plan, or a SARSEP. Federal and state income tax forms Section 457 nonqualified deferred compensation plan. Federal and state income tax forms Section 125 cafeteria plan. Federal and state income tax forms   However, an employer can choose to exclude elective deferrals under the above plans from the definition of compensation. Federal and state income tax forms The limit on elective deferrals is discussed in chapter 2 under Salary Reduction Simplified Employee Pension (SARSEP) and in chapter 4. Federal and state income tax forms Other options. Federal and state income tax forms   In figuring the compensation of a participant, you can treat any of the following amounts as the employee's compensation. Federal and state income tax forms The employee's wages as defined for income tax withholding purposes. Federal and state income tax forms The employee's wages you report in box 1 of Form W-2, Wage and Tax Statement. Federal and state income tax forms The employee's social security wages (including elective deferrals). Federal and state income tax forms   Compensation generally cannot include either of the following items. Federal and state income tax forms Nontaxable reimbursements or other expense allowances. Federal and state income tax forms Deferred compensation (other than elective deferrals). Federal and state income tax forms SIMPLE plans. Federal and state income tax forms   A special definition of compensation applies for SIMPLE plans. Federal and state income tax forms See chapter 3. Federal and state income tax forms Contribution. Federal and state income tax forms   A contribution is an amount you pay into a plan for all those participating in the plan, including self-employed individuals. Federal and state income tax forms Limits apply to how much, under the contribution formula of the plan, can be contributed each year for a participant. Federal and state income tax forms Deduction. Federal and state income tax forms   A deduction is the plan contributions you can subtract from gross income on your federal income tax return. Federal and state income tax forms Limits apply to the amount deductible. Federal and state income tax forms Earned income. Federal and state income tax forms   Earned income is net earnings from self-employment, discussed later, from a business in which your services materially helped to produce the income. Federal and state income tax forms   You can also have earned income from property your personal efforts helped create, such as royalties from your books or inventions. Federal and state income tax forms Earned income includes net earnings from selling or otherwise disposing of the property, but it does not include capital gains. Federal and state income tax forms It includes income from licensing the use of property other than goodwill. Federal and state income tax forms   Earned income includes amounts received for services by self-employed members of recognized religious sects opposed to social security benefits who are exempt from self-employment tax. Federal and state income tax forms   If you have more than one business, but only one has a retirement plan, only the earned income from that business is considered for that plan. Federal and state income tax forms Employer. Federal and state income tax forms   An employer is generally any person for whom an individual performs or did perform any service, of whatever nature, as an employee. Federal and state income tax forms A sole proprietor is treated as his or her own employer for retirement plan purposes. Federal and state income tax forms However, a partner is not an employer for retirement plan purposes. Federal and state income tax forms Instead, the partnership is treated as the employer of each partner. Federal and state income tax forms Highly compensated employee. Federal and state income tax forms   A highly compensated employee is an individual who: Owned more than 5% of the interest in your business at any time during the year or the preceding year, regardless of how much compensation that person earned or received, or For the preceding year, received compensation from you of more than $115,000 (if the preceding year is 2012, 2013, or 2014) and, if you so choose, was in the top 20% of employees when ranked by compensation. Federal and state income tax forms Leased employee. Federal and state income tax forms   A leased employee who is not your common-law employee must generally be treated as your employee for retirement plan purposes if he or she does all the following. Federal and state income tax forms Provides services to you under an agreement between you and a leasing organization. Federal and state income tax forms Has performed services for you (or for you and related persons) substantially full time for at least 1 year. Federal and state income tax forms Performs services under your primary direction or control. Federal and state income tax forms Exception. Federal and state income tax forms   A leased employee is not treated as your employee if all the following conditions are met. Federal and state income tax forms Leased employees are not more than 20% of your non-highly compensated work force. Federal and state income tax forms The employee is covered under the leasing organization's qualified pension plan. Federal and state income tax forms The leasing organization's plan is a money purchase pension plan that has all the following provisions. Federal and state income tax forms Immediate participation. Federal and state income tax forms (This requirement does not apply to any individual whose compensation from the leasing organization in each plan year during the 4-year period ending with the plan year is less than $1,000. Federal and state income tax forms ) Full and immediate vesting. Federal and state income tax forms A nonintegrated employer contribution rate of at least 10% of compensation for each participant. Federal and state income tax forms However, if the leased employee is your common-law employee, that employee will be your employee for all purposes, regardless of any pension plan of the leasing organization. Federal and state income tax forms Net earnings from self-employment. Federal and state income tax forms   For SEP and qualified plans, net earnings from self-employment is your gross income from your trade or business (provided your personal services are a material income-producing factor) minus allowable business deductions. Federal and state income tax forms Allowable deductions include contributions to SEP and qualified plans for common-law employees and the deduction allowed for the deductible part of your self-employment tax. Federal and state income tax forms   Net earnings from self-employment does not include items excluded from gross income (or their related deductions) other than foreign earned income and foreign housing cost amounts. Federal and state income tax forms   For the deduction limits, earned income is net earnings for personal services actually rendered to the business. Federal and state income tax forms You take into account the income tax deduction for the deductible part of self-employment tax and the deduction for contributions to the plan made on your behalf when figuring net earnings. Federal and state income tax forms   Net earnings include a partner's distributive share of partnership income or loss (other than separately stated items, such as capital gains and losses). Federal and state income tax forms It does not include income passed through to shareholders of S corporations. Federal and state income tax forms Guaranteed payments to limited partners are net earnings from self-employment if they are paid for services to or for the partnership. Federal and state income tax forms Distributions of other income or loss to limited partners are not net earnings from self-employment. Federal and state income tax forms   For SIMPLE plans, net earnings from self-employment is the amount on line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040), Self-Employment Tax, before subtracting any contributions made to the SIMPLE plan for yourself. Federal and state income tax forms Qualified plan. Federal and state income tax forms   A qualified plan is a retirement plan that offers a tax-favored way to save for retirement. Federal and state income tax forms You can deduct contributions made to the plan for your employees. Federal and state income tax forms Earnings on these contributions are generally tax free until distributed at retirement. Federal and state income tax forms Profit-sharing, money purchase, and defined benefit plans are qualified plans. Federal and state income tax forms A 401(k) plan is also a qualified plan. Federal and state income tax forms Participant. Federal and state income tax forms   A participant is an eligible employee who is covered by your retirement plan. Federal and state income tax forms See the discussions of the different types of plans for the definition of an employee eligible to participate in each type of plan. Federal and state income tax forms Partner. Federal and state income tax forms   A partner is an individual who shares ownership of an unincorporated trade or business with one or more persons. Federal and state income tax forms For retirement plans, a partner is treated as an employee of the partnership. Federal and state income tax forms Self-employed individual. Federal and state income tax forms   An individual in business for himself or herself, and whose business is not incorporated, is self-employed. Federal and state income tax forms Sole proprietors and partners are self-employed. Federal and state income tax forms Self-employment can include part-time work. Federal and state income tax forms   Not everyone who has net earnings from self-employment for social security tax purposes is self-employed for qualified plan purposes. Federal and state income tax forms See Common-law employee and Net earnings from self-employment , earlier. Federal and state income tax forms   In addition, certain fishermen may be considered self-employed for setting up a qualified plan. Federal and state income tax forms See Publication 595, Capital Construction Fund for Commercial Fishermen, for the special rules used to determine whether fishermen are self-employed. Federal and state income tax forms Sole proprietor. Federal and state income tax forms   A sole proprietor is an individual who owns an unincorporated business by himself or herself, including a single member limited liability company that is treated as a disregarded entity for tax purposes. Federal and state income tax forms For retirement plans, a sole proprietor is treated as both an employer and an employee. Federal and state income tax forms Prev  Up  Next   Home   More Online Publications
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Frequently Asked Questions: Do I Need a PTIN?

a. General Guidance

b. PTIN Scenarios

c. Supervised, Non-Signing, and Non-1040 Preparers

d. SSN Requirements for Obtaining a PTIN


a. General Guidance


1. Who needs a Preparer Tax Identification Number (PTIN)? (revised 2/22/12)

A PTIN must be obtained by all enrolled agents, as well as all tax return preparers who are compensated for preparing, or assisting in the preparation of, all or substantially all of any U.S. federal tax return, claim for refund, or other tax form submitted to the IRS except the following:

Form SS-4, Application for Employer Identification Number;
Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding;
Form SS-16, Certificate of Election of Coverage under FICA;
Form W-2 series of returns;
Form W-7, Application for IRS Individual Taxpayer Identification Number;
Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding;
Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment;
Form 872, Consent to Extend the Time to Assess Tax;
Form 906, Closing Agreement On Final Determination Covering Specific Matters;
Form 1098 series;
Form 1099 series;
Form 2848, Power of Attorney and Declaration of Representative;
Form 3115, Application for Change in Accounting Method;
Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits;
Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners;
Form 4419, Application for Filing Information Returns Electronically;
Form 5300, Application for Determination for Employee Benefit Plan;
Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans;
Form 5310, Application for Determination for Terminating Plan;
Form 5500 series;
Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips;
Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests;
Form 8288-B, Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests;
Form 8508, Request for Waiver From Filing Information Returns Electronically;
Form 8717, User Fee for Employee Plan Determination, Opinion, and Advisory Letter Request;
Form 8809, Application for Extension of Time to File Information Return;
Form 8821, Tax Information Authorization;
Form 8942, Application for Certification of Qualified Investments Eligible for Credits and Grants Under the Qualifying Therapeutic Discovery Project Program

Refer to the scenarios for additional guidance.

2. Are individuals who are active attorneys and certified public accountants required to obtain a PTIN if they do not prepare all or substantially all of any tax return? (revised 2/22/12)

Attorneys and certified public accountants do not need to obtain a PTIN unless they prepare for compensation all or substantially all of a federal tax return or claim for refund.

3. Are enrolled retirement plan agents required to obtain a PTIN? (posted 11/4/11)

Enrolled Retirement Plan Agents are only required to obtain a PTIN if they prepare or assist in the preparation of all or substantially all of any tax return or claim for refund that is not on the list of forms exempt from the PTIN requirement. ERPAs that prepare only Form 5300 or 5500 series returns are not required to obtain a PTIN. See Notice 2011-91 for more information.

4. Can multiple individuals or one office share one PTIN? (revised 6/9/11)

No, every individual who, for compensation, prepares or assists in the preparation of a tax return or claim for refund must have his or her own PTIN and each tax return preparer may only obtain one PTIN.

5. If I don't have a PTIN, can I still prepare tax returns for compensation? (revised 10/10/13)

No. You must have a PTIN to prepare tax returns for compensation. 

6. Is there an age requirement for obtaining a PTIN? (posted 9/30/10)

Yes, applicants must be at least 18 years of age.

7. What penalties can be imposed against tax return preparers who don't have a current PTIN? (revised 2/22/12)

Failure to have a current PTIN could result in the imposition of Internal Revenue Code section 6695 penalties, injunction, and/or disciplinary action by the IRS Office of Professional Responsibility.

8. What is the difference between a PTIN and an EFIN? Does a preparer need both? (revised 2/22/12)

A Preparer Tax Identification Number (PTIN) is a number issued by the IRS to paid tax return preparers. It is used as the tax return preparer’s identification number and, when applicable, must be placed in the Paid Preparer section of a tax return that the tax return preparer prepared for compensation. There is an initial fee of $64.25 and an annual renewal fee of $63.00.

An Electronic Filing Identification Number (EFIN) is a number issued by the IRS to individuals or firms that have been approved as authorized IRS e-file providers.  It is included with all electronic return data transmitted to the IRS.  There is no fee for an EFIN.

Preparer Tax Identification Numbers are issued to individuals.  Electronic Filing Identification Numbers are issued to individuals or firms.  Most preparers need both.

9. If an employee of a business prepares the business’ tax returns as part of their job responsibilities, do they need to obtain a PTIN? (revised 9/28/10)

No. An employee who prepares his employer’s federal tax returns is not required to sign as a paid preparer. Accordingly, unless the employee prepares other federal tax returns for compensation, he or she is not required to register and obtain a PTIN.

10. Are e-file transmitters or intermediate service providers that do not prepare returns subject to the PTIN requirements? (revised 9/28/10)

No. E-file providers that assist in the formatting and transmission of tax returns electronically, but do not prepare all or substantially all of a federal tax return or claim for refund for compensation, are not required to obtain a PTIN.

11. Will the IRS share my PTIN application information with other people? (revised 4/19/12)

The law allows vendors and others to obtain the PTIN holder listing. PTIN holders are not allowed to opt out of the disclosure of their contact information because Freedom of Information Act (FOIA) laws make the information public. If you receive unwanted email solicitations due to this required disclosure, the Federal Trade Commission, Bureau of Consumer Protection can best advise you whether an email violates the CAN-SPAM Act of 2003 and how to report violations.

You should also review the PTIN application Privacy Policy.

In order to maintain privacy PTIN holders may want to review and/or update contact information


b. PTIN Scenarios


1. I am a tax return preparer, and I have a PTIN.  My firm employs a bookkeeper.  She gathers client receipts and invoices, and organizes and records all information for me.  Although I use the information that our bookkeeper has compiled, I prepare my clients’ tax returns and make all substantive determinations that go into computing the tax liability.  Does my bookkeeper need to have a PTIN? (posted 9/28/10)

No, she is not a tax return preparer, and is not required to have a PTIN.

2. I am a tax return preparer, and I have a PTIN.  Every tax filing season I hire two paid interns from the accounting program at a local college to help me during the busy season.  The interns perform data entry from the tax organizer that my clients fill out, and assemble the documentation that the clients have submitted.  Where clients have submitted incomplete information, or more information is needed, the interns may call clients to gather information missing from the tax organizer, but they are not allowed to provide advice or answer tax law questions.  I prepare and sign all my clients’ returns.  Do my interns need to have a PTIN?  (posted 9/28/10)

No, the interns are not tax return preparers, and are not required to have a PTIN.

3. Same facts as above, but in order to help my interns get exposure to the tax system, I allow them to work with clients who have very simple tax situations, and prepare the Form 1040-EZ.  I review the forms carefully, and sign them.  Are my interns required to have PTINs? (posted 9/28/10)

Yes, the interns are tax return preparers and are required to have a PTIN, whether or not they sign the returns.

4. I am a tax return preparer, and I have a PTIN.  I have an administrative assistant in the office who also performs data entry during tax filing season.  At times, clients call and provide him with information, which he records in the system.  Using the data he has entered, I meet with my clients and provide advice as needed.   I then prepare and sign their returns.  Is my administrative assistant required to have a PTIN? posted 9/28/10)

No, the administrative assistant is not a tax return preparer, and is not required to have a PTIN.

5. I am a retired tax professional, and I volunteer during the tax filing season.  I volunteer at a VITA site, where I prepare individual tax returns for lower-income individuals for no compensation.  Do I need to have a PTIN? (revised 10/10/13)

No, you are not required to have a PTIN.

6. I run a small tax return preparation business that is heavily software-based.  I employ four associates who sit with taxpayers and walk through a step-by-step software program that uses an “interview” process that results in a draft tax return.  I check and sign the returns, and I have a PTIN.  Do my four associates need to have a PTIN? (posted 9/28/10)

You will need to perform additional analysis to determine whether your four associates must have a PTIN.  The answer depends on the specific circumstances of your firm.  In general, if individuals prepare, or assist in preparing, all or substantially all of a tax return, including making determinations that affect tax liability, they must have a PTIN.

7. I am a reporting agent who prepares Forms 94X series returns for my clients for compensation.  I do not exercise any discretion or independent judgment on my client's underlying tax positions and I do not render tax advice to any of my clients.  Do I need a PTIN?  (revised 1/3/11)

No.  The PTIN regulations incorporate the carve-out from the definition of tax return preparer in Treasury Regulation section 301.7701–15(f) for individuals who provide only typing, reproduction, or other mechanical assistance in the preparation of a return or claim for refund.  Example one under Treasury Regulation section 301.7701-15(f)(6) provides that reporting agents who do not exercise any discretion or independent judgment on the client's underlying tax positions and who do not render tax advice to any clients are carved-out under this exception and, therefore, are not tax return preparers.

8. I am a reporting agent who prepares Forms 94X series returns for my clients for compensation.  On occasion, my clients ask me for assistance with issues such as determining whether their workers are employees or independent contractors for federal tax purposes.  Do I need a PTIN? (revised 1/3/11)

Yes.  The PTIN regulations require all tax return preparers who are compensated for preparing, or assisting in the preparation of, all or substantially all of a tax return or claim for refund of tax to register and obtain a PTIN.  The carve-out from the definition of tax return preparer for individuals who provide only typing, reproduction, or other mechanical assistance in the preparation of a return or claim for refund does not apply to reporting agents who render tax advice to any client (example two under Treasury Regulation section 301.7701-15(f)(6)).

9. I am a retirement plan administrator who prepares Forms 5500 and the accompanying schedules for my clients. I also prepare Forms 8955-SSA and Form 5558 for my clients. While the Form 5500 series returns are included in the list of forms exempted from the PTIN requirements in Notice 2011-6, the Forms 8955-SSA and Forms 5558 are not included in that list. Am I required to obtain a PTIN? (posted 3/4/11)

No. The Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Participants, and Form 5558, Application for Extension of Time to File Certain Employee Plan Returns, are, for purposes of Notice 2011-6, part of the "Form 5500 series" of tax returns inasmuch as these forms are prepared either in conjunction with the filing of a retirement plan's Form 5500 filing or to request an extension of time to file a Form 5500 series tax return.

10. Is an attorney or a certified public accountant required to obtain a PTIN if the attorney or certified public accountant only advises a client regarding an issue that is reflected on a claim for refund? (posted 3/4/11)

An attorney or certified public accountant is required to obtain a PTIN if the attorney or certified public accountant prepares, or assists in preparing, all or substantially all of a return or claim for refund. Under the authority of section 1.6109-2(h), however, an attorney or certified public accountant will not be required to obtain a PTIN if the attorney or certified public accountant only advises a client regarding an issue that is reflected on a claim for refund and neither the attorney or certified public accountant nor any person in the firm of the attorney or certified public accountant signs or is required to sign the claim for refund under Treasury Regulation sections 301.7701-15(b)(1) and 1.6695-1(b). The attorney or certified public accountant in question is still a nonsigning tax return preparer subject to penalty under section 6694 if the attorney or certified public accountant has prepared all or a substantial portion of the claim for refund within the meaning of Treasury Regulation section 301.7701-15(b)(3).

11. Our company prepares Forms 2290 for our clients.  It is the only federal tax form we prepare.  Are our employees subject to any of the new regulations? (revised 2/7/13)

Yes, any individual who receives compensation for preparing Forms 2290 is required to register with the IRS and obtain a PTIN.

12. If someone only prepares or assists with preparing Form 1023 for compensation, should they obtain a PTIN? (posted 3/7/12)
 
Generally yes.  More information about PTIN requirements for preparers of exempt organization forms is available here


c. Supervised, Non-Signing, and Non-1040 Preparers


1.  What is a supervised preparer?  Do supervised preparers need a PTIN? (revised 2/7/13)

A supervised preparer is a non-signing preparer who is employed by a law firm, CPA firm or other recognized firm (a firm that is at least 80 percent owned by attorneys, CPAs, or enrolled agents).  The returns they prepare are signed by a supervising attorney, CPA or enrolled agent at the firm. 

A supervised preparer does need a PTIN and must provide their supervisor’s PTIN on their PTIN application or renewal.

Additional guidance on supervised preparers is available in Notice 2011-6 (or view the Fact Sheet).

2. I own a tax preparation business and I review and sign all the returns my employees prepare.  Do they need PTINs?  (revised 2/7/13)

Yes.  Anyone you hire to prepare tax returns needs a PTIN regardless of whether you review and sign the returns.

3. What are the requirements for people who prepare returns other than the Form 1040 series? (revised 2/7/13)

Non-1040 preparers generally need a PTIN.  For exemptions to the PTIN requirement, see FAQ 1 at the top of this page under General Guidance

4. When multiple paid preparers are involved in preparation and/or review of a return, who is required to sign the return?  (posted 8/11/10)

Existing Treasury regulations under sections 1.6695-1(b) and 301.7701-15(b)(1) provide that a signing tax return preparer is the individual tax return preparer who has the primary responsibility for the overall accuracy of the preparation of a return.  The PTIN requirements, which require all preparers to register and obtain a PTIN, do not change the existing rules regarding who is the signing tax return preparer.

5. Are non-signing preparers disclosed on each return prepared even if another preparer reviews and signs it? (revised 2/7/13)

No, the names of non-signing preparers are not disclosed on the return.  Although there is no plan to expand the paid preparer section of the return to include non-signing preparers, they still are required to have a PTIN.

6. If I don't prepare any Form 1040 returns but prepare returns that flow-through to Forms 1040 such as Schedules K-1 for Forms 1065 or 1120S, how do I answer the question, &quotDo you prepare Form 1040 series tax returns?&quot (posted 10/12/11)
 
You should answer &quotno&quot.


d. SSN Requirements for Obtaining a PTIN


1. Is a social security number required to obtain a PTIN? (revised 4/13/11)

Individuals generally are required to provide their social security numbers when they obtain a PTIN.  However, U.S. citizens who have a conscientious objection to obtaining a social security number for religious reasons and foreign persons who are not eligible to obtain a social security number and have a permanent non-U.S. address may obtain a PTIN without a social security number.  These individuals are required to provide supplemental documentation to verify their identity and substantiate their eligibility for a PTIN under these specific exceptions.  See questions 2 and 3 below or Revenue Procedure 2010-41 for additional guidance.

Individuals who have an Individual Taxpayer Identification Number (ITIN) are not eligible for a PTIN unless they are foreign persons with a permanent non-U.S. address, and can provide documentation to support that status.

2. How do U.S. citizens without a social security number due to a conscientious objection for religious reasons obtain a PTIN? (updated 3/21/14)

U.S. citizens who have a conscientious objection to obtaining a social security number for religious reasons must complete Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application, either online or on paper, and a paper Form 8945, PTIN Supplemental Application For U.S. Citizens Without a Social Security Number Due To Conscientious Religious Objection.

Documentation to substantiate identity, U.S. citizenship, and status as a member of a recognized religious group must accompany the Form 8945.  Documentation requirements and mailing information are included in the Form 8945 instructions. Allow 4-6 weeks to process your PTIN application.

3. How do foreign preparers without a social security number obtain a PTIN? (updated 3/21/14)

A foreign preparer who does not have and is not eligible to obtain a social security number and is neither a citizen of the U.S. nor a resident alien of the U.S. as defined in section 7701(b)(1)(A) will need to complete the Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application, either online or on paper, and a paper Form 8946, PTIN Supplemental Application For Foreign Persons Without a Social Security Number. Only preparers that have a foreign (non-U.S.) address may file this form.

Individuals who have an Individual Taxpayer Identification Number (ITIN) are not eligible for a PTIN unless they are foreign persons with a permanent non-U.S. address.

Documentation to substantiate identity and eligibility must accompany the Form 8946. Documentation requirements and mailing information are included in the Form 8946 instructions.

Allow 4-6 weeks to process your PTIN application.  

4. I have a social security number, but have not filed an income tax return with the IRS. My individual income tax returns were filed with the Departamento de Hacienda (Puerto Rico). How do I obtain a PTIN? (updated 3/21/2014)

A Puerto Rican resident who has never filed a U.S. individual income tax return must submit a paper Form W-12 PTIN application. Ensure the address on Line 15 of the Form W-12 matches the information from your Hacienda tax return information. 

Include the following with your W-12 application:

  • Check or money order for $64.25 (make payable to IRS Tax Pro PTIN Fee)  
  • An original, certified, or notarized copy of your social security card along with one other government issued document that contains a current photo ID. Examples of acceptable supporting documents are listed below. All documents must be a current original, certified, or notarized and must verify your name. Refer to Form W-12 instructions for complete information regarding acceptable supporting documentation and application requirements.
    Examples of acceptable supporting documents:
    - Passport/Passport Card
    - Driver's License
    - U.S. State ID Card
    - Military ID Card
    - National ID card

Return to Return Preparer Program FAQs

Page Last Reviewed or Updated: 21-Mar-2014

The Federal And State Income Tax Forms

Federal and state income tax forms 4. Federal and state income tax forms   Communications and Air Transportation Taxes Table of Contents Uncollected Tax Report Communications TaxLocal-only service. Federal and state income tax forms Private communication service. Federal and state income tax forms Exemptions Credits or Refunds Air Transportation TaxesTransportation of Persons by Air International Air Travel Facilities Transportation of Property by Air Special Rules on Transportation Taxes Excise taxes are imposed on amounts paid for certain facilities and services. Federal and state income tax forms If you receive any payment on which tax is imposed, you are required to collect the tax, file returns, and pay the tax over to the government. Federal and state income tax forms If you fail to collect and pay over the taxes, you may be liable for the trust fund recovery penalty. Federal and state income tax forms See chapter 14, later. Federal and state income tax forms Uncollected Tax Report A separate report is required to be filed by collecting agents of communications services and air transportation taxes if the person from whom the facilities or services tax (the tax) is required to be collected (the taxpayer) refuses to pay the tax, or it is impossible for the collecting agent to collect the tax. Federal and state income tax forms The report must contain the name and address of the taxpayer, the type of facility provided or service rendered, the amount paid for the facility or service (the amount on which the tax is based), and the date paid. Federal and state income tax forms Regular method taxpayers. Federal and state income tax forms   For regular method taxpayers, the report must be filed by the due date of the Form 720 on which the tax would have been reported. Federal and state income tax forms Alternative method taxpayers. Federal and state income tax forms   For alternative method taxpayers, the report must be filed by the due date of the Form 720 that includes an adjustment to the separate account for the uncollected tax. Federal and state income tax forms See Alternative method in  chapter 11. Federal and state income tax forms Where to file. Federal and state income tax forms    Do not file the uncollected tax report with Form 720. Federal and state income tax forms Instead, mail the report to: Internal Revenue Service Excise Tax Program SE:S:SP:EX MS C9-109 5000 Ellin Rd. Federal and state income tax forms  Lanham, MD 20706 Communications Tax A 3% tax is imposed on amounts paid for local telephone service and teletypewriter exchange service. Federal and state income tax forms Local telephone service. Federal and state income tax forms   This includes access to a local telephone system and the privilege of telephonic quality communication with most people who are part of the system. Federal and state income tax forms Local telephone service also includes any facility or services provided in connection with this service. Federal and state income tax forms The tax applies to lease payments for certain customer premises equipment (CPE) even though the lessor does not also provide access to a local telecommunications system. Federal and state income tax forms Local-only service. Federal and state income tax forms   Local-only service is local telephone service as described above, provided under a plan that does not include long distance telephone service or that separately states the charge for local service on the bill to customers. Federal and state income tax forms Local-only service also includes any facility or services provided in connection with this service, even though these services and facilities may also be used with long-distance service. Federal and state income tax forms Private communication service. Federal and state income tax forms   Private communication service is not local telephone service. Federal and state income tax forms Private communication service includes accessory-type services provided in connection with a Centrex, PBX, or other similar system for dual use accessory equipment. Federal and state income tax forms However, the charge for the service must be stated separately from the charge for the basic system, and the accessory must function, in whole or in part, in connection with intercommunication among the subscriber's stations. Federal and state income tax forms Teletypewriter exchange service. Federal and state income tax forms   This includes access from a teletypewriter or other data station to a teletypewriter exchange system and the privilege of intercommunication by that station with most persons having teletypewriter or other data stations in the same exchange system. Federal and state income tax forms Figuring the tax. Federal and state income tax forms   The tax is based on the sum of all charges for local telephone service included in the bill. Federal and state income tax forms However, if the bill groups individual items for billing and tax purposes, the tax is based on the sum of the individual items within that group. Federal and state income tax forms The tax on the remaining items not included in any group is based on the charge for each item separately. Federal and state income tax forms Do not include in the tax base state or local sales or use taxes that are separately stated on the taxpayer's bill. Federal and state income tax forms Exemptions Payments for certain services or payments from certain users are exempt from the communications tax. Federal and state income tax forms Nontaxable service. Federal and state income tax forms   Nontaxable service means bundled service and long distance service. Federal and state income tax forms Nontaxable service also includes pre-paid telephone cards and pre-paid cellular service. Federal and state income tax forms Bundled service. Federal and state income tax forms   Bundled service is local and long distance service provided under a plan that does not separately state the charge for the local telephone service. Federal and state income tax forms Bundled service includes plans that provide both local and long distance service for either a flat monthly fee or a charge that varies with the elapsed transmission time for which the service is used. Federal and state income tax forms Telecommunications companies provide bundled service for both landlines and wireless (cellular) service. Federal and state income tax forms If Voice over Internet Protocol service provides both local and long distance service and the charges are not separately stated, such service is bundled service. Federal and state income tax forms   The method for sending or receiving a call, such as on a landline telephone, wireless (cellular), or some other method, does not affect whether a service is local-only or bundled. Federal and state income tax forms Long distance service. Federal and state income tax forms   Long distance service is telephonic quality communication with persons whose telephones are outside the local telephone system of the caller. Federal and state income tax forms Pre-paid telephone cards (PTC). Federal and state income tax forms   A PTC will be treated as bundled service unless a PTC expressly states it is for local-only service. Federal and state income tax forms Generally, the person responsible for collecting the tax is the carrier who transfers the PTC to the transferee. Federal and state income tax forms The transferee is the first person that is not a carrier to whom a PTC is transferred by the carrier. Federal and state income tax forms The transferee is the person liable for the tax and is eligible to request a credit or refund. Federal and state income tax forms For more information, see Regulations section 49. Federal and state income tax forms 4251-4. Federal and state income tax forms   The holder is the person that purchases a PTC to use and not to resell. Federal and state income tax forms Holders are not liable for the tax and cannot request a credit or refund. Federal and state income tax forms Pre-paid cellular telephones. Federal and state income tax forms   Rules similar to the PTC rules described above apply to pre-paid cellular telephones. Federal and state income tax forms The transferee is the person eligible to request the credit or refund. Federal and state income tax forms Installation charges. Federal and state income tax forms   The tax does not apply to payments received for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment. Federal and state income tax forms However, the tax does apply to payments for the repair or replacement of those items incidental to ordinary maintenance. Federal and state income tax forms Answering services. Federal and state income tax forms   The tax does not apply to amounts paid for a private line, an answering service, and a one-way paging or message service if they do not provide access to a local telephone system and the privilege of telephonic communication as part of the local telephone system. Federal and state income tax forms Mobile radio telephone service. Federal and state income tax forms   The tax does not apply to payments for a two-way radio service that does not provide access to a local telephone system. Federal and state income tax forms Coin-operated telephones. Federal and state income tax forms   The tax for local telephone service does not apply to payments made for services by inserting coins in public coin-operated telephones. Federal and state income tax forms But the tax applies if the coin-operated telephone service is furnished for a guaranteed amount. Federal and state income tax forms Figure the tax on the amount paid under the guarantee plus any fixed monthly or other periodic charge. Federal and state income tax forms Telephone-operated security systems. Federal and state income tax forms   The tax does not apply to amounts paid for telephones used only to originate calls to a limited number of telephone stations for security entry into a building. Federal and state income tax forms In addition, the tax does not apply to any amounts paid for rented communication equipment used in the security system. Federal and state income tax forms News services. Federal and state income tax forms   The tax on teletypewriter exchange service does not apply to charges for the following news services. Federal and state income tax forms Services dealing exclusively with the collection or dissemination of news for or through the public press or radio or television broadcasting. Federal and state income tax forms Services used exclusively in the collection or dissemination of news by a news ticker service furnishing a general news service similar to that of the public press. Federal and state income tax forms This exemption applies to payments received for messages from one member of the news media to another member (or to or from their bona fide correspondents). Federal and state income tax forms For the exemption to apply, the charge for these services must be billed in writing to the person paying for the service and that person must certify in writing that the services are used for an exempt purpose. Federal and state income tax forms Services not exempted. Federal and state income tax forms   The tax applies to amounts paid by members of the news media for local telephone service. Federal and state income tax forms International organizations and the American Red Cross. Federal and state income tax forms   The tax does not apply to communication services furnished to an international organization or to the American National Red Cross. Federal and state income tax forms Nonprofit hospitals. Federal and state income tax forms   The tax does not apply to telephone services furnished to income tax-exempt nonprofit hospitals for their use. Federal and state income tax forms Also, the tax does not apply to amounts paid by these hospitals to provide local telephone service in the homes of their personnel who must be reached during their off-duty hours. Federal and state income tax forms Nonprofit educational organizations. Federal and state income tax forms   The tax does not apply to payments received for services and facilities furnished to a nonprofit educational organization for its use. Federal and state income tax forms A nonprofit educational organization is one that satisfies all the following requirements. Federal and state income tax forms It normally maintains a regular faculty and curriculum. Federal and state income tax forms It normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. Federal and state income tax forms It is exempt from income tax under section 501(a). Federal and state income tax forms This includes a school operated by an organization exempt under section 501(c)(3) if the school meets the above qualifications. Federal and state income tax forms Qualified blood collector organizations. Federal and state income tax forms   The tax does not apply to telephone services furnished to qualified blood collector organizations for their use. Federal and state income tax forms A qualified blood collector organization is one that is: Described in section 501(c)(3) and exempt from tax under section 501(a), Primarily engaged in the activity of collecting human blood, Registered with the IRS, and Registered by the Food and Drug Administration to collect blood. Federal and state income tax forms Federal, state, and local government. Federal and state income tax forms   The tax does not apply to communication services provided to the government of the United States, the government of any state or its political subdivisions, the District of Columbia, or the United Nations. Federal and state income tax forms Treat an Indian tribal government as a state for the exemption from the communications tax only if the services involve the exercise of an essential tribal government function. Federal and state income tax forms Exemption certificate. Federal and state income tax forms   Any form of exemption certificate will be acceptable if it includes all the information required by the Internal Revenue Code and Regulations. Federal and state income tax forms See Regulations section 49. Federal and state income tax forms 4253-11. Federal and state income tax forms File the certificate with the provider of the communication services. Federal and state income tax forms An exemption certificate is not required for nontaxable services. Federal and state income tax forms   The following users that are exempt from the communications tax do not have to file an annual exemption certificate after they have filed the initial certificate to claim an exemption from the communications tax. Federal and state income tax forms The American National Red Cross and other international organizations. Federal and state income tax forms Nonprofit hospitals. Federal and state income tax forms Nonprofit educational organizations. Federal and state income tax forms Qualified blood collector organizations. Federal and state income tax forms State and local governments. Federal and state income tax forms   The federal government does not have to file any exemption certificate. Federal and state income tax forms   All other organizations must furnish exemption certificates when required. Federal and state income tax forms Credits or Refunds If tax is collected and paid over for nontaxable services, or for certain services or users exempt from the communications tax, the collector or taxpayer may claim a credit or refund if it has repaid the tax to the person from whom the tax was collected or obtained the consent of that person to the allowance of the credit or refund. Federal and state income tax forms Alternatively, the person who paid the tax may claim a refund. Federal and state income tax forms For more information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. Federal and state income tax forms Collectors. Federal and state income tax forms   The collector may request a credit or refund if it has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. Federal and state income tax forms These requirements also apply to nontaxable service refunds. Federal and state income tax forms Collectors using the regular method for deposits. Federal and state income tax forms   Collectors using the regular method for deposits must use Form 720X to request a credit or refund if the collector has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. Federal and state income tax forms Collectors using the alternative method for deposits. Federal and state income tax forms   Collectors using the alternative method for deposits must adjust their separate accounts for the credit or refund if it has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. Federal and state income tax forms For more information, see the Instructions for Form 720. Federal and state income tax forms Air Transportation Taxes Taxes are imposed on amounts paid for: Transportation of persons by air, Use of international air travel facilities, and Transportation of property by air. Federal and state income tax forms Transportation of Persons by Air The tax on transportation of persons by air is made up of the: Percentage tax, and Domestic-segment tax. Federal and state income tax forms Percentage tax. Federal and state income tax forms   A tax of 7. Federal and state income tax forms 5% applies to amounts paid for taxable transportation of persons by air. Federal and state income tax forms Amounts paid for transportation include charges for layover or waiting time and movement of aircraft in deadhead service. Federal and state income tax forms Mileage awards. Federal and state income tax forms   The percentage tax may apply to an amount paid (in cash or in kind) to an air carrier (or any related person) for the right to provide mileage awards for, or other reductions in the cost of, any transportation of persons by air. Federal and state income tax forms For example, this applies to mileage awards purchased by credit card companies, telephone companies, restaurants, hotels, and other businesses. Federal and state income tax forms   Generally, the percentage tax does not apply to amounts paid for mileage awards where the mileage awards cannot, under any circumstances, be redeemed for air transportation that is subject to the tax. Federal and state income tax forms Until regulations are issued, the following rules apply to mileage awards. Federal and state income tax forms Amounts paid for mileage awards that cannot be redeemed for taxable transportation beginning and ending in the United States are not subject to the tax. Federal and state income tax forms For this rule, mileage awards issued by a foreign air carrier are considered to be usable only on that foreign air carrier and thus not redeemable for taxable transportation beginning and ending in the United States. Federal and state income tax forms Therefore, amounts paid to a foreign air carrier for mileage awards are not subject to the tax. Federal and state income tax forms Amounts paid by an air carrier to a domestic air carrier for mileage awards that can be redeemed for taxable transportation are not subject to the tax to the extent those miles will be awarded in connection with the purchase of taxable transportation. Federal and state income tax forms Amounts paid by an air carrier to a domestic air carrier for mileage awards that can be redeemed for taxable transportation are subject to the tax to the extent those miles will not be awarded in connection with the purchase of taxable transportation. Federal and state income tax forms Domestic-segment tax. Federal and state income tax forms   The domestic-segment tax is a flat dollar amount for each segment of taxable transportation for which an amount is paid. Federal and state income tax forms However, see Rural airports, later. Federal and state income tax forms A segment is a single takeoff and a single landing. Federal and state income tax forms The amount of the domestic-segment tax is in the Instructions for Form 720. Federal and state income tax forms Charter flights. Federal and state income tax forms    If an aircraft is chartered, the domestic-segment tax for each segment of taxable transportation is figured by multiplying the tax by the number of passengers transported on the aircraft. Federal and state income tax forms Rural airports. Federal and state income tax forms   The domestic-segment tax does not apply to a segment to or from a rural airport. Federal and state income tax forms An airport is a rural airport for a calendar year if fewer than 100,000 commercial passengers departed from the airport by air during the second preceding calendar year (the 100,000 passenger rule), and one of the following is true: The airport is not located within 75 miles of another airport from which 100,000 or more commercial passengers departed during the second preceding calendar year, The airport was receiving essential air service subsidies as of August 5, 1997, or The airport is not connected by paved roads to another airport. Federal and state income tax forms   To apply the 100,000 passenger rule to any airport described in (3) above, only count commercial passengers departing from the airport by air on flight segments of at least 100 miles. Federal and state income tax forms   An updated list of rural airports can be found on the Department of Transportation website at www. Federal and state income tax forms dot. Federal and state income tax forms gov and enter the phrase “Essential Air Service” in the search box. Federal and state income tax forms Taxable transportation. Federal and state income tax forms   Taxable transportation is transportation by air that meets either of the following tests. Federal and state income tax forms It begins and ends either in the United States or at any place in Canada or Mexico not more than 225 miles from the nearest point on the continental United States boundary (this is the 225-mile zone). Federal and state income tax forms It is directly or indirectly from one port or station in the United States to another port or station in the United States, but only if it is not a part of uninterrupted international air transportation, discussed later. Federal and state income tax forms Round trip. Federal and state income tax forms   A round trip is considered two separate trips. Federal and state income tax forms The first trip is from the point of departure to the destination. Federal and state income tax forms The second trip is the return trip from that destination. Federal and state income tax forms Uninterrupted international air transportation. Federal and state income tax forms   This means transportation entirely by air that does not begin and end in the United States or in the 225-mile zone if there is not more than a 12-hour scheduled interval between arrival and departure at any station in the United States. Federal and state income tax forms For a special rule that applies to military personnel, see Exemptions, later. Federal and state income tax forms Transportation between the continental U. Federal and state income tax forms S. Federal and state income tax forms and Alaska or Hawaii. Federal and state income tax forms   This transportation is partially exempt from the tax on transportation of persons by air. Federal and state income tax forms The tax does not apply to the part of the trip between the point at which the route of transportation leaves or enters the continental United States (or a port or station in the 225-mile zone) and the point at which it enters or leaves Hawaii or Alaska. Federal and state income tax forms Leaving or entering occurs when the route of the transportation passes over either the United States border or a point 3 nautical miles (3. Federal and state income tax forms 45 statute miles) from low tide on the coast line, or when it leaves a port or station in the 225-mile zone. Federal and state income tax forms Therefore, this transportation is subject to the percentage tax on the part of the trip in U. Federal and state income tax forms S. Federal and state income tax forms airspace, the domestic-segment tax for each domestic segment, and the tax on the use of international air travel facilities, discussed later. Federal and state income tax forms Transportation within Alaska or Hawaii. Federal and state income tax forms   The tax on transportation of persons by air applies to the entire fare paid in the case of flights between any of the Hawaiian Islands, and between any ports or stations in the Aleutian Islands or other ports or stations elsewhere in Alaska. Federal and state income tax forms The tax applies even though parts of the flights may be over international waters or over Canada, if no point on the direct line of transportation between the ports or stations is more than 225 miles from the United States (Hawaii or Alaska). Federal and state income tax forms Package tours. Federal and state income tax forms   The air transportation taxes apply to “complimentary” air transportation furnished solely to participants in package holiday tours. Federal and state income tax forms The amount paid for these package tours includes a charge for air transportation even though it may be advertised as “free. Federal and state income tax forms ” This rule also applies to the tax on the use of international air travel facilities, discussed later. Federal and state income tax forms Liability for tax. Federal and state income tax forms   The person paying for taxable transportation is liable for the tax and, ordinarily, the person receiving the payment collects the tax, files the returns, and pays the tax over to the government. Federal and state income tax forms However, if payment is made outside the United States for a prepaid order, exchange order, or similar order, the person furnishing the initial transportation provided for under that order must collect the tax. Federal and state income tax forms    A travel agency that is an independent broker and sells tours on aircraft that it charters must collect the transportation tax, file the returns, and pay the tax over to the government. Federal and state income tax forms However, a travel agency that sells tours as the agent of an airline must collect the tax and remit it to the airline for the filing of returns and for the payment of the tax over to the government. Federal and state income tax forms An independent third party that is not under the airline's supervision or control, but is acting on behalf of, and receiving compensation from, a passenger, is not required to collect the tax and pay it to the government. Federal and state income tax forms For more information on resellers of air transportation, see Revenue Ruling 2006-52. Federal and state income tax forms You can find Revenue Ruling 2006-52 on page 761 of I. Federal and state income tax forms R. Federal and state income tax forms B. Federal and state income tax forms 2006-43 at www. Federal and state income tax forms irs. Federal and state income tax forms gov/pub/irs-irbs/irb06-43. Federal and state income tax forms pdf. Federal and state income tax forms   The fact that the aircraft does not use public or commercial airports in taking off and landing has no effect on the tax. Federal and state income tax forms But see Certain helicopter uses, later. Federal and state income tax forms   For taxable transportation that begins and ends in the United States, the tax applies regardless of whether the payment is made in or outside the United States. Federal and state income tax forms   If the tax is not paid when payment for the transportation is made, the air carrier providing the initial segment of the transportation that begins or ends in the United States becomes liable for the tax. Federal and state income tax forms Exemptions. Federal and state income tax forms   The tax on transportation of persons by air does not apply in the following situations. Federal and state income tax forms See also Special Rules on Transportation Taxes, later. Federal and state income tax forms Military personnel on international trips. Federal and state income tax forms   When traveling in uniform at their own expense, United States military personnel on authorized leave are deemed to be traveling in uninterrupted international air transportation (defined earlier) even if the scheduled interval between arrival and departure at any station in the United States is actually more than 12 hours. Federal and state income tax forms However, such personnel must buy their tickets within 12 hours after landing at the first domestic airport and accept the first available accommodation of the type called for by their tickets. Federal and state income tax forms The trip must begin or end outside the United States and the 225-mile zone. Federal and state income tax forms Certain helicopter uses. Federal and state income tax forms   The tax does not apply to air transportation by helicopter if the helicopter is used for any of the following purposes. Federal and state income tax forms Transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas. Federal and state income tax forms Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Federal and state income tax forms Providing emergency medical transportation. Federal and state income tax forms   However, during a use described in items (1) or (2), the tax applies if the helicopter takes off from, or lands at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise uses services provided under section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Federal and state income tax forms For item (1), treat each flight segment as a separate flight. Federal and state income tax forms Fixed-wing aircraft uses. Federal and state income tax forms   The tax does not apply to air transportation by fixed-wing aircraft if the fixed-wing aircraft is used for any of the following purposes. Federal and state income tax forms Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Federal and state income tax forms Providing emergency medical transportation. Federal and state income tax forms The aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. Federal and state income tax forms   However, during a use described in item (1), the tax applies if the fixed-wing aircraft takes off from, or lands at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise uses services provided under section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Federal and state income tax forms Skydiving. Federal and state income tax forms   The tax does not apply to any air transportation exclusively for the purpose of skydiving. Federal and state income tax forms Seaplanes. Federal and state income tax forms   The tax does not apply to any air transportation by seaplane for any segment consisting of a takeoff from, and a landing on, water if the places where the takeoff and landing occur are not receiving financial assistance from the Airport and Airways Trust Fund. Federal and state income tax forms Bonus tickets. Federal and state income tax forms   The tax does not apply to free bonus tickets issued by an airline company to its customers who have satisfied all requirements to qualify for the bonus tickets. Federal and state income tax forms However, the tax applies to amounts paid by customers for advance bonus tickets when customers have traveled insufficient mileage to fully qualify for the free advance bonus tickets. Federal and state income tax forms International Air Travel Facilities A tax per person is imposed (whether in or outside the United States) for international flights that begin or end in the United States. Federal and state income tax forms However, for a domestic segment that begins or ends in Alaska or Hawaii, a reduced tax per person applies only to departures. Federal and state income tax forms This tax does not apply if all the transportation is subject to the percentage tax, discussed earlier. Federal and state income tax forms It also doesn't apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. Federal and state income tax forms See the Instructions for Form 720 for the tax rates. Federal and state income tax forms Transportation of Property by Air A tax of 6. Federal and state income tax forms 25% is imposed on amounts paid (whether in or outside the United States) for transportation of property by air. Federal and state income tax forms The fact that the aircraft may not use public or commercial airports in taking off and landing has no effect on the tax. Federal and state income tax forms The tax applies only to amounts paid to a person engaged in the business of transporting property by air for hire. Federal and state income tax forms The tax applies only to transportation (including layover time and movement of aircraft in deadhead service) that begins and ends in the United States. Federal and state income tax forms Thus, the tax does not apply to transportation of property by air that begins or ends outside the United States. Federal and state income tax forms Exemptions. Federal and state income tax forms   The tax on transportation of property by air does not apply in the following situations. Federal and state income tax forms See also Special Rules on Transportation Taxes, later. Federal and state income tax forms Cropdusting and firefighting service. Federal and state income tax forms   The tax does not apply to amounts paid for cropdusting or aerial firefighting service. Federal and state income tax forms Exportation. Federal and state income tax forms    The tax does not apply to payments for transportation of property by air in the course of exportation (including to United States possessions) by continuous movement, as evidenced by the execution of Form 1363, Export Exemption Certificate. Federal and state income tax forms See Form 1363 for more information. Federal and state income tax forms Certain helicopter and fixed-wing air ambulance uses. Federal and state income tax forms   The tax does not apply to amounts paid for the use of helicopters in construction to set heating and air conditioning units on roofs of buildings, to dismantle tower cranes, and to aid in construction of power lines and ski lifts. Federal and state income tax forms   The tax also does not apply to air transportation by helicopter or fixed-wing aircraft for the purpose of providing emergency medical services. Federal and state income tax forms The fixed-wing aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. Federal and state income tax forms Skydiving. Federal and state income tax forms   The tax does not apply to any air transportation exclusively for the purpose of skydiving. Federal and state income tax forms Excess baggage. Federal and state income tax forms    The tax does not apply to excess baggage accompanying a passenger on an aircraft operated on an established line. Federal and state income tax forms Surtax on fuel used in a fractional ownership program aircraft. Federal and state income tax forms   The tax does not apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. Federal and state income tax forms Alaska and Hawaii. Federal and state income tax forms   For transportation of property to and from Alaska and Hawaii, the tax in general does not apply to the portion of the transportation that is entirely outside the continental United States (or the 225-mile zone if the aircraft departs from or arrives at an airport in the 225-mile zone). Federal and state income tax forms But the tax applies to flights between ports or stations in Alaska and the Aleutian Islands, as well as between ports or stations in Hawaii. Federal and state income tax forms The tax applies even though parts of the flights may be over international waters or over Canada, if no point on a line drawn from where the route of transportation leaves the United States (Alaska) to where it reenters the United States (Alaska) is more than 225 miles from the United States. Federal and state income tax forms Liability for tax. Federal and state income tax forms   The person paying for taxable transportation is liable for the tax and, ordinarily, the person engaged in the business of transporting property by air for hire receives the payment, collects the tax, files the returns, and pays the tax over to the government. Federal and state income tax forms   If tax is not paid when a payment is made outside the United States, the person furnishing the last segment of taxable transportation collects the tax from the person to whom the property is delivered in the United States. Federal and state income tax forms Special Rules on Transportation Taxes In certain circumstances, special rules apply to the taxes on transportation of persons and property by air. Federal and state income tax forms Aircraft used by affiliated corporations. Federal and state income tax forms   The taxes do not apply to payments received by one member of an affiliated group of corporations from another member for services furnished in connection with the use of an aircraft. Federal and state income tax forms However, the aircraft must be owned or leased by a member of the affiliated group and cannot be available for hire by a nonmember of the affiliated group. Federal and state income tax forms Determine whether an aircraft is available for hire by a nonmember of an affiliated group on a flight-by-flight basis. Federal and state income tax forms   For this rule, an affiliated group of corporations is any group of corporations connected with a common parent corporation through 80% or more of stock ownership. Federal and state income tax forms Small aircraft. Federal and state income tax forms   The taxes do not apply to transportation furnished by an aircraft having a maximum certificated takeoff weight of 6,000 pounds or less. Federal and state income tax forms However, the taxes do apply if the aircraft is operated on an established line. Federal and state income tax forms “Operated on an established line” means the aircraft operates with some degree of regularity between definite points. Federal and state income tax forms However, it does not include any time an aircraft is being operated on a flight that is solely for sightseeing. Federal and state income tax forms   Consider an aircraft to be operated on an established line if it is operated on a charter basis between two cities also served by that carrier on a regularly scheduled basis. Federal and state income tax forms   Also, the taxes apply if the aircraft is jet-powered, regardless of its maximum certificated takeoff weight or whether or not it is operated on an established line. Federal and state income tax forms Mixed load of persons and property. Federal and state income tax forms   If a single amount is paid for air transportation of persons and property, the payment must be allocated between the amount subject to the tax on transportation of persons and the amount subject to the tax on transportation of property. Federal and state income tax forms The allocation must be reasonable and supported by adequate records. Federal and state income tax forms Credits or refunds. Federal and state income tax forms   If tax is collected and paid over for air transportation that is not taxable air transportation, the collector may claim a credit or refund if it has repaid the tax to the person from whom the tax was collected or obtained the consent of that person to the allowance of the credit or refund. Federal and state income tax forms Alternatively, the person who paid the tax may claim a refund. Federal and state income tax forms For information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. 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