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Filing 2012 Taxes Online

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Filing 2012 Taxes Online

Filing 2012 taxes online Index A Archer MSAs, Archer MSAs, Employment taxes. Filing 2012 taxes online Assistance (see Tax help) C Contributions to FSA, Contributions to an FSA HRA, Contributions to an HRA HSA, Contributions to an HSA MSA, Contributions to an MSA D Death of HSA holder, Death of HSA Holder MSA holder, Death of the Archer MSA Holder Distributions from FSA, Distributions From an FSA HRA, Distributions From an HRA HSA, Distributions From an HSA MSA, Distributions From an MSA E Employer participation FSA, Employer Participation HRA, Employer Participation HSA, Employer Participation MSA, Employer Participation F Flexible Spending Arrangements Grace Period, Health FSA – grace period. Filing 2012 taxes online Flexible spending arrangements, Flexible Spending Arrangements (FSAs), Employer Participation Balance in, Balance in an FSA Contributions to, Contributions to an FSA Distributions from, Distributions From an FSA Qualifying for, Qualifying for an FSA When to contribute, When To Contribute Form 5329, Excess contributions. Filing 2012 taxes online , Excess contributions. Filing 2012 taxes online 5498–SA, Form 8889. Filing 2012 taxes online , Reporting Contributions on Your Return 8853, Additional tax. Filing 2012 taxes online , Filing Form 8853 8889, Form 8889. Filing 2012 taxes online , Additional tax. Filing 2012 taxes online , Filing Form 8889 Free tax services, Free help with your tax return. Filing 2012 taxes online H Health plans, high deductible, High deductible health plan (HDHP). Filing 2012 taxes online , High deductible health plan (HDHP). Filing 2012 taxes online Health reimbursement arrangements, Health Reimbursement Arrangements (HRAs), Employer Participation Balance in, Balance in an HRA Contributions to, Contributions to an HRA Distributions from, Distributions From an HRA Qualifying for, Qualifying for an HRA Health savings accounts, Health Savings Accounts (HSAs), Employment taxes. Filing 2012 taxes online Balance in, Balance in an HSA Contributions to, Contributions to an HSA Deemed distributions, Deemed distributions from HSAs. Filing 2012 taxes online Distributions from, Distributions From an HSA Last-month rule, Last-month rule. Filing 2012 taxes online Partnerships, Reporting Contributions on Your Return Qualifying for, Qualifying for an HSA Rollovers, Rollovers S corporations, Reporting Contributions on Your Return When to contribute, When To Contribute Help (see Tax help) High deductible health plan, High deductible health plan (HDHP). Filing 2012 taxes online , High deductible health plan (HDHP). Filing 2012 taxes online M Medical expenses, qualified, Qualified medical expenses. Filing 2012 taxes online , Qualified medical expenses. Filing 2012 taxes online , Qualified medical expenses. Filing 2012 taxes online , Qualified medical expenses. Filing 2012 taxes online Medical savings accounts, Medical Savings Accounts (MSAs), Medicare Advantage MSAs Balance in, Balance in an Archer MSA Contributions to, Contributions to an MSA Deemed distributions, Deemed distributions from Archer MSAs. Filing 2012 taxes online Distributions from, Distributions From an MSA Medicare Advantage MSAs, Medicare Advantage MSAs Qualifying for, Qualifying for an Archer MSA When to contribute, When To Contribute Medicare Advantage MSAs, Medicare Advantage MSAs P Preventive care, High deductible health plan (HDHP). Filing 2012 taxes online Publications (see Tax help) Q Qualified HSA funding distribution, Qualified HSA funding distribution. Filing 2012 taxes online T Tax help, How To Get Tax Help Testing period Last-month rule, Testing period. Filing 2012 taxes online Qualified HSA funding distribution, Funding distribution – testing period. Filing 2012 taxes online TTY/TDD information, How To Get Tax Help Prev  Up     Home   More Online Publications
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The Filing 2012 Taxes Online

Filing 2012 taxes online Publication 596 - Main Content Table of Contents Chapter 1—Rules for EveryoneRule 1—Adjusted Gross Income (AGI) Limits Rule 2—You Must Have a Valid Social Security Number (SSN) Rule 3—Your Filing Status Cannot Be Married Filing Separately Rule 4—You Must Be a U. Filing 2012 taxes online S. Filing 2012 taxes online Citizen or Resident Alien All Year Rule 5—You Cannot File Form 2555 or Form 2555-EZ Rule 6—Your Investment Income Must Be $3,300 or Less Rule 7—You Must Have Earned Income Chapter 2—Rules If You Have a Qualifying ChildRule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9—Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer Chapter 3—Rules If You Do Not Have a Qualifying ChildRule 11—You Must Be at Least Age 25 but Under Age 65 Rule 12—You Cannot Be the Dependent of Another Person Rule 13—You Cannot Be a Qualifying Child of Another Taxpayer Rule 14—You Must Have Lived in the United States More Than Half of the Year Chapter 4—Figuring and Claiming the EICRule 15—Earned Income Limits IRS Will Figure the EIC for You How To Figure the EIC Yourself Schedule EIC Chapter 5—Disallowance of the EICForm 8862 Are You Prohibited From Claiming the EIC for a Period of Years? Chapter 6—Detailed ExamplesExample 1—Sharon Rose Example 2—Cynthia and Jerry Grey Chapter 1—Rules for Everyone This chapter discusses Rules 1 through 7. Filing 2012 taxes online You must meet all seven rules to qualify for the earned income credit. Filing 2012 taxes online If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the publication. Filing 2012 taxes online If you meet all seven rules in this chapter, then read either chapter 2 or chapter 3 (whichever applies) for more rules you must meet. Filing 2012 taxes online Rule 1—Adjusted Gross Income (AGI) Limits Your adjusted gross income (AGI) must be less than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Filing 2012 taxes online Adjusted gross income (AGI). Filing 2012 taxes online   AGI is the amount on line 4 of Form 1040EZ, line 22 of Form 1040A, or line 38 of Form 1040. Filing 2012 taxes online   If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. Filing 2012 taxes online You do not need to read the rest of this publication. Filing 2012 taxes online Example—AGI is more than limit. Filing 2012 taxes online Your AGI is $38,550, you are single, and you have one qualifying child. Filing 2012 taxes online You cannot claim the EIC because your AGI is not less than $37,870. Filing 2012 taxes online However, if your filing status was married filing jointly, you might be able to claim the EIC because your AGI is less than $43,210. Filing 2012 taxes online Community property. Filing 2012 taxes online   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3), and live in a state that has community property laws, your AGI includes that portion of both your and your spouse's wages that you are required to include in gross income. Filing 2012 taxes online This is different from the community property rules that apply under Rule 7. Filing 2012 taxes online Rule 2—You Must Have a Valid Social Security Number (SSN) To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). Filing 2012 taxes online Any qualifying child listed on Schedule EIC also must have a valid SSN. Filing 2012 taxes online (See Rule 8 if you have a qualifying child. Filing 2012 taxes online ) If your social security card (or your spouse's, if filing a joint return) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. Filing 2012 taxes online An example of a federally funded benefit is Medicaid. Filing 2012 taxes online If you have a card with the legend “Not valid for employment” and your immigration status has changed so that you are now a U. Filing 2012 taxes online S. Filing 2012 taxes online citizen or permanent resident, ask the SSA for a new social security card without the legend. Filing 2012 taxes online If you get the new card after you have already filed your return, you can file an amended return on Form 1040X, Amended U. Filing 2012 taxes online S. Filing 2012 taxes online Individual Income Tax Return, to claim the EIC. Filing 2012 taxes online U. Filing 2012 taxes online S. Filing 2012 taxes online citizen. Filing 2012 taxes online   If you were a U. Filing 2012 taxes online S. Filing 2012 taxes online citizen when you received your SSN, you have a valid SSN. Filing 2012 taxes online Valid for work only with INS authorization or DHS authorization. Filing 2012 taxes online   If your social security card reads “Valid for work only with INS authorization” or “Valid for work only with DHS authorization,” you have a valid SSN, but only if that authorization is still valid. Filing 2012 taxes online SSN missing or incorrect. Filing 2012 taxes online   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. Filing 2012 taxes online Other taxpayer identification number. Filing 2012 taxes online   You cannot get the EIC if, instead of an SSN, you (or your spouse, if filing a joint return) have an individual taxpayer identification number (ITIN). Filing 2012 taxes online ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. Filing 2012 taxes online No SSN. Filing 2012 taxes online   If you do not have a valid SSN, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Filing 2012 taxes online You cannot claim the EIC. Filing 2012 taxes online Getting an SSN. Filing 2012 taxes online   If you (or your spouse, if filing a joint return) do not have an SSN, you can apply for one by filing Form SS-5 with the SSA. Filing 2012 taxes online You can get Form SS-5 online at www. Filing 2012 taxes online socialsecurity. Filing 2012 taxes online gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. Filing 2012 taxes online Filing deadline approaching and still no SSN. Filing 2012 taxes online   If the filing deadline is approaching and you still do not have an SSN, you have two choices. Filing 2012 taxes online Request an automatic 6-month extension of time to file your return. Filing 2012 taxes online You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Filing 2012 taxes online S. Filing 2012 taxes online Individual Income Tax Return. Filing 2012 taxes online For more information, see the instructions for Form 4868. Filing 2012 taxes online File the return on time without claiming the EIC. Filing 2012 taxes online After receiving the SSN, file an amended return, Form 1040X, claiming the EIC. Filing 2012 taxes online Attach a filled-in Schedule EIC, Earned Income Credit, if you have a qualifying child. Filing 2012 taxes online Rule 3—Your Filing Status Cannot Be “Married Filing Separately” If you are married, you usually must file a joint return to claim the EIC. Filing 2012 taxes online Your filing status cannot be “Married filing separately. Filing 2012 taxes online ” Spouse did not live with you. Filing 2012 taxes online   If you are married and your spouse did not live in your home at any time during the last 6 months of the year, you may be able to file as head of household, instead of married filing separately. Filing 2012 taxes online In that case, you may be able to claim the EIC. Filing 2012 taxes online For detailed information about filing as head of household, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Filing 2012 taxes online Rule 4—You Must Be a U. Filing 2012 taxes online S. Filing 2012 taxes online Citizen or Resident Alien All Year If you (or your spouse, if married) were a nonresident alien for any part of the year, you cannot claim the earned income credit unless your filing status is married filing jointly. Filing 2012 taxes online You can use that filing status only if one spouse is a U. Filing 2012 taxes online S. Filing 2012 taxes online citizen or resident alien and you choose to treat the nonresident spouse as a U. Filing 2012 taxes online S. Filing 2012 taxes online resident. Filing 2012 taxes online If you make this choice, you and your spouse are taxed on your worldwide income. Filing 2012 taxes online If you need more information on making this choice, get Publication 519, U. Filing 2012 taxes online S. Filing 2012 taxes online Tax Guide for Aliens. Filing 2012 taxes online If you (or your spouse, if married) were a nonresident alien for any part of the year and your filing status is not married filing jointly, enter “No” on the dotted line next to line 64a (Form 1040) or in the space to the left of line 38a (Form 1040A). Filing 2012 taxes online Rule 5—You Cannot File Form 2555 or Form 2555-EZ You cannot claim the earned income credit if you file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. Filing 2012 taxes online You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. Filing 2012 taxes online U. Filing 2012 taxes online S. Filing 2012 taxes online possessions are not foreign countries. Filing 2012 taxes online See Publication 54, Tax Guide for U. Filing 2012 taxes online S. Filing 2012 taxes online Citizens and Resident Aliens Abroad, for more detailed information. Filing 2012 taxes online Rule 6—Your Investment Income Must Be $3,300 or Less You cannot claim the earned income credit unless your investment income is $3,300 or less. Filing 2012 taxes online If your investment income is more than $3,300, you cannot claim the credit. Filing 2012 taxes online Form 1040EZ. Filing 2012 taxes online   If you file Form 1040EZ, your investment income is the total of the amount on line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. Filing 2012 taxes online Form 1040A. Filing 2012 taxes online   If you file Form 1040A, your investment income is the total of the amounts on lines 8a (taxable interest), 8b (tax-exempt interest), 9a (ordinary dividends), and 10 (capital gain distributions) on that form. Filing 2012 taxes online Form 1040. Filing 2012 taxes online   If you file Form 1040, use Worksheet 1 in this chapter to figure your investment income. Filing 2012 taxes online    Worksheet 1. Filing 2012 taxes online Investment Income If You Are Filing Form 1040 Use this worksheet to figure investment income for the earned income credit when you file Form 1040. Filing 2012 taxes online Interest and Dividends         1. Filing 2012 taxes online Enter any amount from Form 1040, line 8a 1. Filing 2012 taxes online   2. Filing 2012 taxes online Enter any amount from Form 1040, line 8b, plus any amount on Form 8814, line 1b 2. Filing 2012 taxes online   3. Filing 2012 taxes online Enter any amount from Form 1040, line 9a 3. Filing 2012 taxes online   4. Filing 2012 taxes online Enter the amount from Form 1040, line 21, that is from Form 8814 if you are filing that form to report your child's interest and dividend income on your return. Filing 2012 taxes online (If your child received an Alaska Permanent Fund dividend, use Worksheet 2 in this chapter to figure the amount to enter on this line. Filing 2012 taxes online ) 4. Filing 2012 taxes online   Capital Gain Net Income         5. Filing 2012 taxes online Enter the amount from Form 1040, line 13. Filing 2012 taxes online If the amount on that line is a loss, enter -0- 5. Filing 2012 taxes online       6. Filing 2012 taxes online Enter any gain from Form 4797, Sales of Business Property, line 7. Filing 2012 taxes online If the amount on that line is a loss, enter -0-. Filing 2012 taxes online (But, if you completed lines 8 and 9 of Form 4797, enter the amount from line 9 instead. Filing 2012 taxes online ) 6. Filing 2012 taxes online       7. Filing 2012 taxes online Substract line 6 of this worksheet from line 5 of this worksheet. Filing 2012 taxes online (If the result is less than zero, enter -0-. Filing 2012 taxes online ) 7. Filing 2012 taxes online   Royalties and Rental Income From Personal Property         8. Filing 2012 taxes online Enter any royalty income from Schedule E, line 23b, plus any income from the rental of personal property shown on Form 1040, line 21 8. Filing 2012 taxes online       9. Filing 2012 taxes online Enter any expenses from Schedule E, line 20, related to royalty income, plus any expenses from the rental of personal property deducted on Form 1040, line 36 9. Filing 2012 taxes online       10. Filing 2012 taxes online Subtract the amount on line 9 of this worksheet from the amount on line 8. Filing 2012 taxes online (If the result is less than zero, enter -0-. Filing 2012 taxes online ) 10. Filing 2012 taxes online   Passive Activities         11. Filing 2012 taxes online Enter the total of any net income from passive activities (such as income included on Schedule E, line 26, 29a (col. Filing 2012 taxes online (g)), 34a (col. Filing 2012 taxes online (d)), or 40). Filing 2012 taxes online (See instructions below for lines 11 and 12. Filing 2012 taxes online ) 11. Filing 2012 taxes online       12. Filing 2012 taxes online Enter the total of any losses from passive activities (such as losses included on Schedule E, line 26, 29b (col. Filing 2012 taxes online (f)), 34b (col. Filing 2012 taxes online (c)), or 40). Filing 2012 taxes online (See instructions below for lines 11 and 12. Filing 2012 taxes online ) 12. Filing 2012 taxes online       13. Filing 2012 taxes online Combine the amounts on lines 11 and 12 of this worksheet. Filing 2012 taxes online (If the result is less than zero, enter -0-. Filing 2012 taxes online ) 13. Filing 2012 taxes online   14. Filing 2012 taxes online Add the amounts on lines 1, 2, 3, 4, 7, 10, and 13. Filing 2012 taxes online Enter the total. Filing 2012 taxes online This is your investment income 14. Filing 2012 taxes online   15. Filing 2012 taxes online Is the amount on line 14 more than $3,300? ❑ Yes. Filing 2012 taxes online You cannot take the credit. Filing 2012 taxes online  ❑ No. Filing 2012 taxes online Go to Step 3 of the Form 1040 instructions for lines 64a and 64b to find out if you can take the credit (unless you are using this publication to find out if you can take the credit; in that case, go to Rule 7, next). Filing 2012 taxes online       Instructions for lines 11 and 12. Filing 2012 taxes online In figuring the amount to enter on lines 11 and 12, do not take into account any royalty income (or loss) included on line 26 of Schedule E or any amount included in your earned income. Filing 2012 taxes online To find out if the income on line 26 or line 40 of Schedule E is from a passive activity, see the Schedule E instructions. Filing 2012 taxes online If any of the rental real estate income (or loss) included on Schedule E, line 26, is not from a passive activity, print “NPA” and the amount of that income (or loss) on the dotted line next to line 26. Filing 2012 taxes online Worksheet 2. Filing 2012 taxes online Worksheet for Line 4 of Worksheet 1 Complete this worksheet only if Form 8814 includes an Alaska Permanent Fund dividend. Filing 2012 taxes online Note. Filing 2012 taxes online Fill out a separate Worksheet 2 for each Form 8814. Filing 2012 taxes online     1. Filing 2012 taxes online Enter the amount from Form 8814, line 2a 1. Filing 2012 taxes online   2. Filing 2012 taxes online Enter the amount from Form 8814, line 2b 2. Filing 2012 taxes online   3. Filing 2012 taxes online Subtract line 2 from line 1 3. Filing 2012 taxes online   4. Filing 2012 taxes online Enter the amount from Form 8814, line 1a 4. Filing 2012 taxes online   5. Filing 2012 taxes online Add lines 3 and 4 5. Filing 2012 taxes online   6. Filing 2012 taxes online Enter the amount of the child's Alaska Permanent Fund dividend 6. Filing 2012 taxes online   7. Filing 2012 taxes online Divide line 6 by line 5. Filing 2012 taxes online Enter the result as a decimal (rounded to at least three places) 7. Filing 2012 taxes online   8. Filing 2012 taxes online Enter the amount from Form 8814, line 12 8. Filing 2012 taxes online   9. Filing 2012 taxes online Multiply line 7 by line 8 9. Filing 2012 taxes online   10. Filing 2012 taxes online Subtract line 9 from line 8. Filing 2012 taxes online Enter the result on line 4 of Worksheet 1 10. Filing 2012 taxes online     (If filing more than one Form 8814, enter on line 4 of Worksheet 1 the total of the amounts on line 10 of all Worksheets 2. Filing 2012 taxes online )     Example—completing Worksheet 2. Filing 2012 taxes online Your 10-year-old child has taxable interest income of $400, an Alaska Permanent Fund dividend of $1,000, and ordinary dividends of $1,100, of which $500 are qualified dividends. Filing 2012 taxes online You choose to report this income on your return. Filing 2012 taxes online You enter $400 on line 1a of Form 8814, $2,100 ($1,000 + $1,100) on line 2a, and $500 on line 2b. Filing 2012 taxes online After completing lines 4 through 11, you enter $400 on line 12 of Form 8814 and line 21 of Form 1040. Filing 2012 taxes online On Worksheet 2, you enter $2,100 on line 1, $500 on line 2, $1,600 on line 3, $400 on line 4, $2,000 on line 5, $1,000 on line 6, 0. Filing 2012 taxes online 500 on line 7, $400 on line 8, $200 on line 9, and $200 on line 10. Filing 2012 taxes online You then enter $200 on line 4 of Worksheet 1. Filing 2012 taxes online Rule 7—You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. Filing 2012 taxes online If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. Filing 2012 taxes online If you are an employee, earned income includes all the taxable income you get from your employer. Filing 2012 taxes online Rule 15 has information that will help you figure the amount of your earned income. Filing 2012 taxes online If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the Form 1040 instructions. Filing 2012 taxes online Earned Income Earned income includes all of the following types of income. Filing 2012 taxes online Wages, salaries, tips, and other taxable employee pay. Filing 2012 taxes online Employee pay is earned income only if it is taxable. Filing 2012 taxes online Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Filing 2012 taxes online But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained later in this chapter. Filing 2012 taxes online Net earnings from self-employment. Filing 2012 taxes online Gross income received as a statutory employee. Filing 2012 taxes online Wages, salaries, and tips. Filing 2012 taxes online    Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. Filing 2012 taxes online You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). Filing 2012 taxes online Nontaxable combat pay election. Filing 2012 taxes online   You can elect to include your nontaxable combat pay in earned income for the earned income credit. Filing 2012 taxes online The amount of your nontaxable combat pay should be shown on your Form W-2, in box 12, with code Q. Filing 2012 taxes online Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. Filing 2012 taxes online For details, see Nontaxable combat pay in chapter 4. Filing 2012 taxes online Net earnings from self-employment. Filing 2012 taxes online   You may have net earnings from self-employment if: You own your own business, or You are a minister or member of a religious order. Filing 2012 taxes online Minister's housing. Filing 2012 taxes online   The rental value of a home or a housing allowance provided to a minister as part of the minister's pay generally is not subject to income tax but is included in net earnings from self-employment. Filing 2012 taxes online For that reason, it is included in earned income for the EIC (except in the cases described in Approved Form 4361 or Form 4029 , below). Filing 2012 taxes online Statutory employee. Filing 2012 taxes online   You are a statutory employee if you receive a Form W-2 on which the “Statutory employee” box (box 13) is checked. Filing 2012 taxes online You report your income and expenses as a statutory employee on Schedule C or C-EZ (Form 1040). Filing 2012 taxes online Strike benefits. Filing 2012 taxes online   Strike benefits paid by a union to its members are earned income. Filing 2012 taxes online Approved Form 4361 or Form 4029 This section is for persons who have an approved: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, or Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. Filing 2012 taxes online Each approved form exempts certain income from social security taxes. Filing 2012 taxes online Each form is discussed here in terms of what is or is not earned income for the EIC. Filing 2012 taxes online Form 4361. Filing 2012 taxes online   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. Filing 2012 taxes online This includes wages, salaries, tips, and other taxable employee compensation. Filing 2012 taxes online A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. Filing 2012 taxes online Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. Filing 2012 taxes online Examples include fees for performing marriages and honoraria for delivering speeches. Filing 2012 taxes online Form 4029. Filing 2012 taxes online   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. Filing 2012 taxes online However, amounts you received as a self-employed individual do not count as earned income. Filing 2012 taxes online Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. Filing 2012 taxes online Disability Benefits If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Filing 2012 taxes online Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. Filing 2012 taxes online You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. Filing 2012 taxes online Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Filing 2012 taxes online Report taxable pension payments on Form 1040, lines 16a and 16b, or Form 1040A, lines 12a and 12b. Filing 2012 taxes online Disability insurance payments. Filing 2012 taxes online   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. Filing 2012 taxes online It does not matter whether you have reached minimum retirement age. Filing 2012 taxes online If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. Filing 2012 taxes online ” Income That Is Not Earned Income Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. Filing 2012 taxes online Do not include any of these items in your earned income. Filing 2012 taxes online Earnings while an inmate. Filing 2012 taxes online   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. Filing 2012 taxes online This includes amounts for work performed while in a work release program or while in a halfway house. Filing 2012 taxes online Workfare payments. Filing 2012 taxes online   Nontaxable workfare payments are not earned income for the EIC. Filing 2012 taxes online These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if sufficient private sector employment is not available, or (2) community service program activities. Filing 2012 taxes online Community property. Filing 2012 taxes online   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under those laws. Filing 2012 taxes online That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. Filing 2012 taxes online Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. Filing 2012 taxes online Nevada, Washington, and California domestic partners. Filing 2012 taxes online   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. Filing 2012 taxes online Your earned income for the EIC does not include any amount earned by your partner. Filing 2012 taxes online Your earned income includes the entire amount you earned. Filing 2012 taxes online For details, see Publication 555. Filing 2012 taxes online Conservation Reserve Program (CRP) payments. Filing 2012 taxes online   If you were receiving social security retirement benefits or social security disability benefits at the time you received any CRP payments, your CRP payments are not earned income for the EIC. Filing 2012 taxes online Nontaxable military pay. Filing 2012 taxes online   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. Filing 2012 taxes online Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). Filing 2012 taxes online See Publication 3, Armed Forces' Tax Guide, for more information. Filing 2012 taxes online    Combat pay. Filing 2012 taxes online You can elect to include your nontaxable combat pay in earned income for the EIC. Filing 2012 taxes online See Nontaxable combat pay in chapter 4. Filing 2012 taxes online Chapter 2—Rules If You Have a Qualifying Child If you have met all the rules in chapter 1, use this chapter to see if you have a qualifying child. Filing 2012 taxes online This chapter discusses Rules 8 through 10. Filing 2012 taxes online You must meet all three of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned income credit with a qualifying child. Filing 2012 taxes online You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. Filing 2012 taxes online (You cannot file Form 1040EZ. Filing 2012 taxes online ) You also must complete Schedule EIC and attach it to your return. Filing 2012 taxes online If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find out what to do next. Filing 2012 taxes online No qualifying child. Filing 2012 taxes online   If you do not meet Rule 8, you do not have a qualifying child. Filing 2012 taxes online Read chapter 3 to find out if you can get the earned income credit without a qualifying child. Filing 2012 taxes online Rule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. Filing 2012 taxes online The fours tests are: Relationship, Age, Residency, and Joint return. Filing 2012 taxes online The four tests are illustrated in Figure 1. Filing 2012 taxes online The paragraphs that follow contain more information about each test. Filing 2012 taxes online Relationship Test To be your qualifying child, a child must be your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), or Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew). Filing 2012 taxes online The following definitions clarify the relationship test. Filing 2012 taxes online Adopted child. Filing 2012 taxes online   An adopted child is always treated as your own child. Filing 2012 taxes online The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Filing 2012 taxes online Foster child. Filing 2012 taxes online   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Filing 2012 taxes online (An authorized placement agency includes a state or local government agency. Filing 2012 taxes online It also includes a tax-exempt organization licensed by a state. Filing 2012 taxes online In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. Filing 2012 taxes online ) Example. Filing 2012 taxes online Debbie, who is 12 years old, was placed in your care 2 years ago by an authorized agency responsible for placing children in foster homes. Filing 2012 taxes online Debbie is your foster child. Filing 2012 taxes online Figure 1. Filing 2012 taxes online Tests for Qualifying Child Please click here for the text description of the image. Filing 2012 taxes online Conditions for Qualifying Child Age Test Your child must be: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a student, and younger than you (or your spouse, if filing jointly, or Permanently and totally disabled at any time during 2013, regardless of age. Filing 2012 taxes online The following examples and definitions clarify the age test. Filing 2012 taxes online Example 1—child not under age 19. Filing 2012 taxes online Your son turned 19 on December 10. Filing 2012 taxes online Unless he was permanently and totally disabled or a student, he is not a qualifying child because, at the end of the year, he was not under age 19. Filing 2012 taxes online Example 2—child not younger than you or your spouse. Filing 2012 taxes online Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. Filing 2012 taxes online He is not disabled. Filing 2012 taxes online Both you and your spouse are 21 years old, and you file a joint return. Filing 2012 taxes online Your brother is not your qualifying child because he is not younger than you or your spouse. Filing 2012 taxes online Example 3—child younger than your spouse but not younger than you. Filing 2012 taxes online The facts are the same as in Example 2 except that your spouse is 25 years old. Filing 2012 taxes online Because your brother is younger than your spouse, he is your qualifying child, even though he is not younger than you. Filing 2012 taxes online Student defined. Filing 2012 taxes online   To qualify as a student, your child must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regular student body at the school, or A student taking a full-time, on-farm training course given by a school described in (1), or a state, county, or local government. Filing 2012 taxes online   The 5 calendar months need not be consecutive. Filing 2012 taxes online   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. Filing 2012 taxes online School defined. Filing 2012 taxes online   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Filing 2012 taxes online However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. Filing 2012 taxes online Vocational high school students. Filing 2012 taxes online   Students who work in co-op jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. Filing 2012 taxes online Permanently and totally disabled. Filing 2012 taxes online   Your child is permanently and totally disabled if both of the following apply. Filing 2012 taxes online He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Filing 2012 taxes online A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Filing 2012 taxes online Residency Test Your child must have lived with you in the United States for more than half of 2013. Filing 2012 taxes online The following definitions clarify the residency test. Filing 2012 taxes online United States. Filing 2012 taxes online   This means the 50 states and the District of Columbia. Filing 2012 taxes online It does not include Puerto Rico or U. Filing 2012 taxes online S. Filing 2012 taxes online possessions such as Guam. Filing 2012 taxes online Homeless shelter. Filing 2012 taxes online   Your home can be any location where you regularly live. Filing 2012 taxes online You do not need a traditional home. Filing 2012 taxes online For example, if your child lived with you for more than half the year in one or more homeless shelters, your child meets the residency test. Filing 2012 taxes online Military personnel stationed outside the United States. Filing 2012 taxes online   U. Filing 2012 taxes online S. Filing 2012 taxes online military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. Filing 2012 taxes online Extended active duty. Filing 2012 taxes online   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Filing 2012 taxes online Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. Filing 2012 taxes online Birth or death of child. Filing 2012 taxes online    child who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the child's home for more than half the time he or she was alive in 2013. Filing 2012 taxes online Temporary absences. Filing 2012 taxes online   Count time that you or your child is away from home on a temporary absence due to a special circumstance as time the child lived with you. Filing 2012 taxes online Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. Filing 2012 taxes online Kidnapped child. Filing 2012 taxes online   A kidnapped child is treated as living with you for more than half of the year if the child lived with you for more than half the part of the year before the date of the kidnapping. Filing 2012 taxes online The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family. Filing 2012 taxes online This treatment applies for all years until the child is returned. Filing 2012 taxes online However, the last year this treatment can apply is the earlier of: The year there is a determination that the child is dead, or The year the child would have reached age 18. Filing 2012 taxes online   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. Filing 2012 taxes online Joint Return Test To meet this test, the child cannot file a joint return for the year. Filing 2012 taxes online Exception. Filing 2012 taxes online   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. Filing 2012 taxes online Example 1—child files joint return. Filing 2012 taxes online You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Filing 2012 taxes online He earned $25,000 for the year. Filing 2012 taxes online The couple files a joint return. Filing 2012 taxes online Because your daughter and her husband file a joint return, she is not your qualifying child. Filing 2012 taxes online Example 2—child files joint return to get refund of tax withheld. Filing 2012 taxes online Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Filing 2012 taxes online They do not have a child. Filing 2012 taxes online Neither is required to file a tax return. Filing 2012 taxes online Taxes were taken out of their pay, so they file a joint return only to get a refund of the withheld taxes. Filing 2012 taxes online The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Filing 2012 taxes online Example 3—child files joint return to claim American opportunity credit. Filing 2012 taxes online The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Filing 2012 taxes online He and his wife are not required to file a tax return, but they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Filing 2012 taxes online Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to claim a refund of income tax withheld or estimated tax paid. Filing 2012 taxes online The exception to the joint return test does not apply, so your son is not your qualifying child. Filing 2012 taxes online Married child. Filing 2012 taxes online   Even if your child does not file a joint return, if your child was married at the end of the year, he or she cannot be your qualifying child unless: You can claim an exemption for the child, or The reason you cannot claim an exemption for the child is that you let the child's other parent claim the exemption under the Special rule for divorced or separated parents (or parents who live apart) described later. Filing 2012 taxes online    Social security number. Filing 2012 taxes online Your qualifying child must have a valid social security number (SSN), unless the child was born and died in 2013 and you attach to your return a copy of the child's birth certificate, death certificate, or hospital records showing a live birth. Filing 2012 taxes online You cannot claim the EIC on the basis of a qualifying child if: The qualifying child's SSN is missing from your tax return or is incorrect, The qualifying child's social security card says “Not valid for employment” and was issued for use in getting a federally funded benefit, or Instead of an SSN, the qualifying child has: An individual taxpayer identification number (ITIN), which is issued to a noncitizen who cannot get an SSN, or An adoption taxpayer identification number (ATIN), issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. Filing 2012 taxes online   If you have more than one qualifying child and only one has a valid SSN, you can use only that child to claim the EIC. Filing 2012 taxes online For more information about SSNs, see Rule 2. Filing 2012 taxes online Rule 9—Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC Sometimes a child meets the tests to be a qualifying child of more than one person. Filing 2012 taxes online However, only one of these persons can actually treat the child as a qualifying child. Filing 2012 taxes online Only that person can use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). Filing 2012 taxes online The exemption for the child. Filing 2012 taxes online The child tax credit. Filing 2012 taxes online Head of household filing status. Filing 2012 taxes online The credit for child and dependent care expenses. Filing 2012 taxes online The exclusion for dependent care benefits. Filing 2012 taxes online The EIC. Filing 2012 taxes online The other person cannot take any of these benefits based on this qualifying child. Filing 2012 taxes online In other words, you and the other person cannot agree to divide these tax benefits between you. Filing 2012 taxes online The other person cannot take any of these tax benefits unless he or she has a different qualifying child. Filing 2012 taxes online The tiebreaker rules, which follow, explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. Filing 2012 taxes online However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. Filing 2012 taxes online Tiebreaker rules. Filing 2012 taxes online   To determine which person can treat the child as a qualifying child to claim the six tax benefits just listed, the following tiebreaker rules apply. Filing 2012 taxes online If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Filing 2012 taxes online If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. Filing 2012 taxes online If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. Filing 2012 taxes online If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. Filing 2012 taxes online If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. Filing 2012 taxes online If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. Filing 2012 taxes online If the child's parents file a joint return with each other, this rule can be applied by treating the parents' total AGI as divided evenly between them. Filing 2012 taxes online See Example 8. Filing 2012 taxes online   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. Filing 2012 taxes online See Examples 1 through 13. Filing 2012 taxes online   If you cannot claim the EIC because your qualifying child is treated under the tiebreaker rules as the qualifying child of another person for 2013, you may be able to take the EIC using a different qualifying child, but you cannot take the EIC using the rules in chapter 3 for people who do not have a qualifying child. Filing 2012 taxes online If the other person cannot claim the EIC. Filing 2012 taxes online   If you and someone else have the same qualifying child but the other person cannot claim the EIC because he or she is not eligible or his or her earned income or AGI is too high, you may be able to treat the child as a qualifying child. Filing 2012 taxes online See Examples 6 and 7. Filing 2012 taxes online But you cannot treat the child as a qualifying child to claim the EIC if the other person uses the child to claim any of the other six tax benefits listed earlier in this chapter. Filing 2012 taxes online Examples. Filing 2012 taxes online    The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. Filing 2012 taxes online Example 1—child lived with parent and grandparent. Filing 2012 taxes online You and your 2-year-old son Jimmy lived with your mother all year. Filing 2012 taxes online You are 25 years old, unmarried, and your AGI is $9,000. Filing 2012 taxes online Your only income was $9,000 from a part-time job. Filing 2012 taxes online Your mother's only income was $20,000 from her job, and her AGI is $20,000. Filing 2012 taxes online Jimmy's father did not live with you or Jimmy. Filing 2012 taxes online The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. Filing 2012 taxes online Jimmy is a qualifying child of both you and your mother because he meets the relationship, age, residency, and joint return tests for both you and your mother. Filing 2012 taxes online However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier in this chapter for which that person qualifies). Filing 2012 taxes online He is not a qualifying child of anyone else, including his father. Filing 2012 taxes online If you do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can treat him as a qualifying child to claim the EIC (and any of the other tax benefits listed earlier for which she qualifies). Filing 2012 taxes online Example 2—parent has higher AGI than grandparent. Filing 2012 taxes online The facts are the same as in Example 1 except your AGI is $25,000. Filing 2012 taxes online Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. Filing 2012 taxes online Only you can claim him. Filing 2012 taxes online Example 3—two persons claim same child. Filing 2012 taxes online The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. Filing 2012 taxes online In this case, you as the child's parent will be the only one allowed to claim Jimmy as a qualifying child for the EIC and the other tax benefits listed earlier for which you qualify. Filing 2012 taxes online The IRS will disallow your mother's claim to the EIC and any of the other tax benefits listed earlier unless she has another qualifying child. Filing 2012 taxes online Example 4—qualifying children split between two persons. Filing 2012 taxes online The facts are the same as in Example 1 except that you also have two other young children who are qualifying children of both you and your mother. Filing 2012 taxes online Only one of you can claim each child. Filing 2012 taxes online However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Filing 2012 taxes online For example, if you claim one child, your mother can claim the other two. Filing 2012 taxes online Example 5—taxpayer who is a qualifying child. Filing 2012 taxes online The facts are the same as in Example 1 except that you are only 18 years old. Filing 2012 taxes online This means you are a qualifying child of your mother. Filing 2012 taxes online Because of Rule 10, discussed next, you cannot claim the EIC and cannot claim your son as a qualifying child. Filing 2012 taxes online Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. Filing 2012 taxes online If your mother meets all the other requirements for claiming the EIC and you do not claim Jimmy as a qualifying child for any of the other tax benefits listed earlier, your mother can claim both you and Jimmy as qualifying children for the EIC. Filing 2012 taxes online Example 6—grandparent with too much earned income to claim EIC. Filing 2012 taxes online The facts are the same as in Example 1 except that your mother earned $50,000 from her job. Filing 2012 taxes online Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. Filing 2012 taxes online Example 7—parent with too much earned income to claim EIC. Filing 2012 taxes online The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. Filing 2012 taxes online Your earned income is too high for you to claim the EIC. Filing 2012 taxes online But your mother cannot claim the EIC either, because her AGI is not higher than yours. Filing 2012 taxes online Example 8—child lived with both parents and grandparent. Filing 2012 taxes online The facts are the same as in Example 1 except that you and Jimmy's father are married to each other, live with Jimmy and your mother, and have AGI of $30,000 on a joint return. Filing 2012 taxes online If you and your husband do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can claim him instead. Filing 2012 taxes online Even though the AGI on your joint return, $30,000, is more than your mother's AGI of $20,000, for this purpose half of the joint AGI can be treated as yours and half as your husband's. Filing 2012 taxes online In other words, each parent's AGI can be treated as $15,000. Filing 2012 taxes online Example 9—separated parents. Filing 2012 taxes online You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. Filing 2012 taxes online In August and September, Joey lived with you. Filing 2012 taxes online For the rest of the year, Joey lived with your husband, who is Joey's father. Filing 2012 taxes online Joey is a qualifying child of both you and your husband because he lived with each of you for more than half the year and because he met the relationship, age, and joint return tests for both of you. Filing 2012 taxes online At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the Special rule for divorced or separated parents (or parents who live apart) does not apply. Filing 2012 taxes online You and your husband will file separate returns. Filing 2012 taxes online Your husband agrees to let you treat Joey as a qualifying child. Filing 2012 taxes online This means, if your husband does not claim Joey as a qualifying child for any of the tax benefits listed earlier, you can claim him as a qualifying child for any tax benefit listed earlier for which you qualify. Filing 2012 taxes online However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. Filing 2012 taxes online See Rule 3. Filing 2012 taxes online Example 10—separated parents claim same child. Filing 2012 taxes online The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. Filing 2012 taxes online In this case, only your husband will be allowed to treat Joey as a qualifying child. Filing 2012 taxes online This is because, during 2013, the boy lived with him longer than with you. Filing 2012 taxes online You cannot claim the EIC (either with or without a qualifying child). Filing 2012 taxes online However, your husband's filing status is married filing separately, so he cannot claim the EIC or the credit for child and dependent care expenses. Filing 2012 taxes online See Rule 3. Filing 2012 taxes online Example 11—unmarried parents. Filing 2012 taxes online You, your 5-year-old son, and your son's father lived together all year. Filing 2012 taxes online You and your son's father are not married. Filing 2012 taxes online Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, and joint return tests for both you and his father. Filing 2012 taxes online Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. Filing 2012 taxes online Neither of you had any other income. Filing 2012 taxes online Your son's father agrees to let you treat the child as a qualifying child. Filing 2012 taxes online This means, if your son's father does not claim your son as a qualifying child for the EIC or any of the other tax benefits listed earlier, you can claim him as a qualifying child for the EIC and any of the other tax benefits listed earlier for which you qualify. Filing 2012 taxes online Example 12—unmarried parents claim same child. Filing 2012 taxes online The facts are the same as in Example 11 except that you and your son's father both claim your son as a qualifying child. Filing 2012 taxes online In this case, only your son's father will be allowed to treat your son as a qualifying child. Filing 2012 taxes online This is because his AGI, $14,000, is more than your AGI, $12,000. Filing 2012 taxes online You cannot claim the EIC (either with or without a qualifying child). Filing 2012 taxes online Example 13—child did not live with a parent. Filing 2012 taxes online You and your 7-year-old niece, your sister's child, lived with your mother all year. Filing 2012 taxes online You are 25 years old, and your AGI is $9,300. Filing 2012 taxes online Your only income was from a part-time job. Filing 2012 taxes online Your mother's AGI is $15,000. Filing 2012 taxes online Her only income was from her job. Filing 2012 taxes online Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Filing 2012 taxes online Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, and joint return tests for both you and your mother. Filing 2012 taxes online However, only your mother can treat her as a qualifying child. Filing 2012 taxes online This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Filing 2012 taxes online Special rule for divorced or separated parents (or parents who live apart). Filing 2012 taxes online   A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following statements are true. Filing 2012 taxes online The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all time during the last 6 months of 2013, whether or not they are or were married. Filing 2012 taxes online The child received over half of his or her support for the year from the parents. Filing 2012 taxes online The child is in the custody of one or both parents for more than half of 2013. Filing 2012 taxes online Either of the following statements is true. Filing 2012 taxes online The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return. Filing 2012 taxes online If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Filing 2012 taxes online A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 provides that the noncustodial parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during 2013. Filing 2012 taxes online For details, see Publication 501. Filing 2012 taxes online Also see Applying Rule 9 to divorced or separated parents (or parents who live apart), next. Filing 2012 taxes online Applying Rule 9 to divorced or separated parents (or parents who live apart). Filing 2012 taxes online   If a child is treated as the qualifying child of the noncustodial parent under the special rule just described for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. Filing 2012 taxes online However, the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for the EIC and other tax benefits listed earlier in this chapter. Filing 2012 taxes online If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine which person can treat the child as a qualifying child. Filing 2012 taxes online Example 1. Filing 2012 taxes online You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Filing 2012 taxes online Your AGI is $10,000. Filing 2012 taxes online Your mother’s AGI is $25,000. Filing 2012 taxes online Your son's father did not live with you or your son. Filing 2012 taxes online Under the Special rule for divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child. Filing 2012 taxes online However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the EIC. Filing 2012 taxes online You and your mother did not have any child care expenses or dependent care benefits. Filing 2012 taxes online If you do not claim your son as a qualifying child, your mother can claim him as a qualifying child for the EIC and head of household filing status, if she qualifies for these tax benefits. Filing 2012 taxes online Example 2. Filing 2012 taxes online The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. Filing 2012 taxes online Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Filing 2012 taxes online Example 3. Filing 2012 taxes online The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the EIC. Filing 2012 taxes online Your mother also claims him as a qualifying child for head of household filing status. Filing 2012 taxes online You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. Filing 2012 taxes online The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. Filing 2012 taxes online Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Filing 2012 taxes online ) if all of the following statements are true. Filing 2012 taxes online You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Filing 2012 taxes online Or, you are that person's brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Filing 2012 taxes online You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Filing 2012 taxes online You lived with that person in the United States for more than half of the year. Filing 2012 taxes online You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Filing 2012 taxes online For more details about the tests to be a qualifying child, see Rule 8. Filing 2012 taxes online If you are a qualifying child of another taxpayer, you cannot claim the EIC. Filing 2012 taxes online This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Filing 2012 taxes online Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). Filing 2012 taxes online Example. Filing 2012 taxes online You and your daughter lived with your mother all year. Filing 2012 taxes online You are 22 years old, unmarried, and attended a trade school full time. Filing 2012 taxes online You had a part-time job and earned $5,700. Filing 2012 taxes online You had no other income. Filing 2012 taxes online Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. Filing 2012 taxes online She can claim the EIC if she meets all the other requirements. Filing 2012 taxes online Because you are your mother's qualifying child, you cannot claim the EIC. Filing 2012 taxes online This is so even if your mother cannot or does not claim the EIC. Filing 2012 taxes online Child of person not required to file a return. Filing 2012 taxes online   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you met the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Filing 2012 taxes online Example 1—return not required. Filing 2012 taxes online The facts are the same as in the last example except your mother had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Filing 2012 taxes online As a result, you are not your mother's qualifying child. Filing 2012 taxes online You can claim the EIC if you meet all the other requirements to do so. Filing 2012 taxes online Example 2—return filed to get refund of tax withheld. Filing 2012 taxes online The facts are the same as in Example 1 except your mother had wages of $1,500 and had income tax withheld from her wages. Filing 2012 taxes online She files a return only to get a refund of the income tax withheld and does not claim the EIC or any other tax credits or deductions. Filing 2012 taxes online As a result, you are not your mother's qualifying child. Filing 2012 taxes online You can claim the EIC if you meet all the other requirements to do so. Filing 2012 taxes online Example 3—return filed to get EIC. Filing 2012 taxes online The facts are the same as in Example 2 except your mother claimed the EIC on her return. Filing 2012 taxes online Since she filed the return to get the EIC, she is not filing it only to get a refund of income tax withheld. Filing 2012 taxes online As a result, you are your mother's qualifying child. Filing 2012 taxes online You cannot claim the EIC. Filing 2012 taxes online Chapter 3—Rules If You Do Not Have a Qualifying Child Use this chapter if you do not have a qualifying child and have met all the rules in chapter 1. Filing 2012 taxes online This chapter discusses Rules 11 through 14. Filing 2012 taxes online You must meet all four of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned income credit without a qualifying child. Filing 2012 taxes online You can file Form 1040, Form 1040A, or Form 1040EZ to claim the EIC without a qualifying child. Filing 2012 taxes online If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find out what to do next. Filing 2012 taxes online If you have a qualifying child. Filing 2012 taxes online   If you meet Rule 8, you have a qualifying child. Filing 2012 taxes online If you meet Rule 8 and do not claim the EIC with a qualifying child, you cannot claim the EIC without a qualifying child. Filing 2012 taxes online Rule 11—You Must Be at Least Age 25 but Under Age 65 You must be at least age 25 but under age 65 at the end of 2013. Filing 2012 taxes online If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65 at the end of 2013. Filing 2012 taxes online It does not matter which spouse meets the age test, as long as one of the spouses does. Filing 2012 taxes online You meet the age test if you were born after December 31, 1948, and before January 2, 1989. Filing 2012 taxes online If you are married filing a joint return, you meet the age test if either you or your spouse was born after December 31, 1948, and before January 2, 1989. Filing 2012 taxes online If neither you nor your spouse meets the age test, you cannot claim the EIC. Filing 2012 taxes online Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Filing 2012 taxes online Death of spouse. Filing 2012 taxes online   If you are filing a joint return with your spouse who died in 2013, you meet the age test if your spouse was at least age 25 but under age 65 at the time of death. Filing 2012 taxes online Example 1. Filing 2012 taxes online You are age 28 and unmarried. Filing 2012 taxes online You meet the age test. Filing 2012 taxes online Example 2—spouse meets age test. Filing 2012 taxes online You are married and filing a joint return. Filing 2012 taxes online You are age 23 and your spouse is age 27. Filing 2012 taxes online You meet the age test because your spouse is at least age 25 but under age 65. Filing 2012 taxes online Example 3—spouse dies in 2013. Filing 2012 taxes online You are married and filing a joint return with your spouse who died in August 2013. Filing 2012 taxes online You are age 67. Filing 2012 taxes online Your spouse would have become age 65 in November 2013. Filing 2012 taxes online Because your spouse was under age 65 when she died, you meet the age test. Filing 2012 taxes online Rule 12—You Cannot Be the Dependent of Another Person If you are not filing a joint return, you meet this rule if: You checked box 6a on Form 1040 or 1040A, or You did not check the “You” box on line 5 of Form 1040EZ, and you entered $10,000 on that line. Filing 2012 taxes online If you are filing a joint return, you meet this rule if: You checked both box 6a and box 6b on Form 1040 or 1040A, or You and your spouse did not check either the “You” box or the “Spouse” box on line 5 of Form 1040EZ, and you entered $20,000 on that line. Filing 2012 taxes online If you are not sure whether someone else can claim you as a dependent, get Publication 501 and read the rules for claiming a dependent. Filing 2012 taxes online If someone else can claim you as a dependent on his or her return, but does not, you still cannot claim the credit. Filing 2012 taxes online Example 1. Filing 2012 taxes online In 2013, you were age 25, single, and living at home with your parents. Filing 2012 taxes online You worked and were not a student. Filing 2012 taxes online You earned $7,500. Filing 2012 taxes online Your parents cannot claim you as a dependent. Filing 2012 taxes online When you file your return, you claim an exemption for yourself by not checking the You box on line 5 of your Form 1040EZ and by entering $10,000 on that line. Filing 2012 taxes online You meet this rule. Filing 2012 taxes online You can claim the EIC if you meet all the other requirements. Filing 2012 taxes online Example 2. Filing 2012 taxes online The facts are the same as in Example 1, except that you earned $2,000. Filing 2012 taxes online Your parents can claim you as a dependent but decide not to. Filing 2012 taxes online You do not meet this rule. Filing 2012 taxes online You cannot claim the credit because your parents could have claimed you as a dependent. Filing 2012 taxes online Joint returns. Filing 2012 taxes online   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. Filing 2012 taxes online   However, another person may be able to claim you as a dependent if you and your spouse file a joint return merely to claim a refund of income tax withheld or estimated tax paid. Filing 2012 taxes online But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. Filing 2012 taxes online Example 1—return filed to get refund of tax withheld. Filing 2012 taxes online You are 26 years old. Filing 2012 taxes online You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. Filing 2012 taxes online Neither you nor your wife is required to file a tax return. Filing 2012 taxes online You do not have a child. Filing 2012 taxes online Taxes were taken out of your pay so you file a joint return only to get a refund of the withheld taxes. Filing 2012 taxes online Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. Filing 2012 taxes online They can claim exemptions for you and your wife if all the other tests to do so are met. Filing 2012 taxes online Example 2—return filed to get EIC. Filing 2012 taxes online The facts are the same as in Example 1except no taxes were taken out of your pay. Filing 2012 taxes online Also, you and your wife are not required to file a tax return, but you file a joint return to claim an EIC of $63 and get a refund of that amount. Filing 2012 taxes online Because claiming the EIC is your reason for filing the return, you are not filing it only to claim a refund of income tax withheld or estimated tax paid. Filing 2012 taxes online Your parents cannot claim an exemption for either you or your wife. Filing 2012 taxes online Rule 13—You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Filing 2012 taxes online ) if all of the following statements are true. Filing 2012 taxes online You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Filing 2012 taxes online Or, you are that person's brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Filing 2012 taxes online You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Filing 2012 taxes online You lived with that person in the United States for more than half of the year. Filing 2012 taxes online You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Filing 2012 taxes online For more details about the tests to be a qualifying child, see Rule 8. Filing 2012 taxes online If you are a qualifying child of another taxpayer, you cannot claim the EIC. Filing 2012 taxes online This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Filing 2012 taxes online Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Filing 2012 taxes online Example. Filing 2012 taxes online You lived with your mother all year. Filing 2012 taxes online You are age 26, unmarried, and permanently and totally disabled. Filing 2012 taxes online Your only income was from a community center where you went three days a week to answer telephones. Filing 2012 taxes online You earned $5,000 for the year and provided more than half of your own support. Filing 2012 taxes online Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. Filing 2012 taxes online She can claim the EIC if she meets all the other requirements. Filing 2012 taxes online Because you are a qualifying child of your mother, you cannot claim the EIC. Filing 2012 taxes online This is so even if your mother cannot or does not claim the EIC. Filing 2012 taxes online Joint returns. Filing 2012 taxes online   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. Filing 2012 taxes online   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return merely to claim a refund of income tax withheld or estimated tax paid. Filing 2012 taxes online But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. Filing 2012 taxes online Child of person not required to file a return. Filing 2012 taxes online   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Filing 2012 taxes online Example 1—return not required. Filing 2012 taxes online You lived all year with your father. Filing 2012 taxes online You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. Filing 2012 taxes online You have no other income, no children, and provided more than half of your own support. Filing 2012 taxes online Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Filing 2012 taxes online As a result, you are not your father's qualifying child. Filing 2012 taxes online You can claim the EIC if you meet all the other requirements to do so. Filing 2012 taxes online Example 2—return filed to get refund of tax withheld. Filing 2012 taxes online The facts are the same as in Example 1 except your father had wages of $1,500 and had income tax withheld from his wages. Filing 2012 taxes online He files a return only to get a refund of the income tax withheld and does not claim the EIC or any other tax credits or deductions. Filing 2012 taxes online As a result, you are not your father's qualifying child. Filing 2012 taxes online You can claim the EIC if you meet all the other requirements to do so. Filing 2012 taxes online Example 3—return filed to get EIC. Filing 2012 taxes online The facts are the same as in Example 2 except your father claimed the EIC on his return. Filing 2012 taxes online Since he filed the return to get the EIC, he is not filing it only to get a refund of income tax withheld. Filing 2012 taxes online As a result, you are your father's qualifying child. Filing 2012 taxes online You cannot claim the EIC. Filing 2012 taxes online Rule 14—You Must Have Lived in the United States More Than Half of the Year Your home (and your spouse's, if filing a joint return) must have been in the United States for more than half the year. Filing 2012 taxes online If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Filing 2012 taxes online United States. Filing 2012 taxes online   This means the 50 states and the District of Columbia. Filing 2012 taxes online It does not include Puerto Rico or U. Filing 2012 taxes online S. Filing 2012 taxes online possessions such as Guam. Filing 2012 taxes online Homeless shelter. Filing 2012 taxes online   Your home can be any location where you regularly live. Filing 2012 taxes online You do not need a traditional home. Filing 2012 taxes online If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. Filing 2012 taxes online Military personnel stationed outside the United States. Filing 2012 taxes online   U. Filing 2012 taxes online S. Filing 2012 taxes online military personnel stationed outside the United States on extended active duty (defined in chapter 2) are considered to live in the United States during that duty period for purposes of the EIC. Filing 2012 taxes online Chapter 4—Figuring and Claiming the EIC You must meet one more rule to claim the EIC. Filing 2012 taxes online You need to know the amount of your earned income to see if you meet the rule in this chapter. Filing 2012 taxes online You also need to know that amount to figure your EIC. Filing 2012 taxes online Rule 15—Earned Income Limits Your earned income must be less than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Filing 2012 taxes online Earned Income Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Filing 2012 taxes online Employee pay is earned income only if it is taxable. Filing 2012 taxes online Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Filing 2012 taxes online But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Filing 2012 taxes online Earned income is explained in detail in Rule 7 in chapter 1. Filing 2012 taxes online Figuring earned income. Filing 2012 taxes online   If you are self-employed, a statutory employee, or a member of the clergy or a church employee who files Schedule SE (Form 1040), you will figure your earned income when you fill out Part 4 of EIC Worksheet B in the Form 1040 instructions. Filing 2012 taxes online   Otherwise, figure your earned income by using the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b or the Form 1040A instructions for lines 38a and 38b, or the worksheet in Step 2 of the Form 1040EZ instructions for lines 8a and 8b. Filing 2012 taxes online   When using one of those worksheets to figure your earned income, you will start with the amount on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). Filing 2012 taxes online You will then reduce that amount by any amount included on that line and described in the following list. Filing 2012 taxes online Scholarship or fellowship grants not reported on a Form W-2. Filing 2012 taxes online A scholarship or fellowship grant that was not reported to you on a Form W-2 is not considered earned income for the earned income credit. Filing 2012 taxes online Inmate's income. Filing 2012 taxes online Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. Filing 2012 taxes online This includes amounts received for work performed while in a work release program or while in a halfway house. Filing 2012 taxes online If you received any amount for work done while an inmate in a penal institution and that amount is included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “PRI” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Filing 2012 taxes online Pension or annuity from deferred compensation plans. Filing 2012 taxes online A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan is not considered earned income for the earned income credit. Filing 2012 taxes online If you received such an amount and it was included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “DFC” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Filing 2012 taxes online This amount may be reported in box 11 of your Form W-2. Filing 2012 taxes online If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or an annuity. Filing 2012 taxes online Clergy. Filing 2012 taxes online   If you are a member of the clergy who files Schedule SE and the amount on line 2 of that schedule includes an amount that was also re