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Form 1040nr

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Form 1040nr

Form 1040nr Publication 721 - Main Content Table of Contents Part I General InformationRefund of Contributions Tax Withholding and Estimated Tax Filing Requirements Part II Rules for RetireesAnnuity starting date. Form 1040nr Gross monthly rate. Form 1040nr Your cost. Form 1040nr Choosing a survivor annuity after retirement. Form 1040nr Canceling a survivor annuity after retirement. Form 1040nr Annuity starting date after 1986. Form 1040nr Annuity starting date before 1987. Form 1040nr Simplified Method General Rule Three-Year Rule Alternative Annuity Option Federal Gift Tax Retirement During the Past Year Reemployment After Retirement Nonresident Aliens Thrift Savings Plan Rollover Rules Distributions Used To Pay Insurance Premiums for Public Safety Officers How To Report Benefits Part III Rules for Disability Retirement and Credit for the Elderly or the DisabledDisability Annuity Other Benefits Credit for the Elderly or the Disabled Part IV Rules for Survivors of Federal EmployeesFERS Death Benefit CSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Thrift Savings Plan Federal Estate Tax Part V Rules for Survivors of Federal RetireesCSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Voluntary Contributions Thrift Savings Plan Federal Estate Tax Income Tax Deduction for Estate Tax Paid How To Get Tax HelpLow Income Taxpayer Clinics Part I General Information This part of the publication contains information that can apply to most recipients of civil service retirement benefits. Form 1040nr Refund of Contributions If you leave federal government service or transfer to a job not under the CSRS or FERS and you are not eligible for an immediate annuity, you can choose to receive a refund of the money in your CSRS or FERS retirement account. Form 1040nr The refund will include both regular and voluntary contributions you made to the fund, plus any interest payable. Form 1040nr If the refund includes only your contributions, none of the refund is taxable. Form 1040nr If it includes any interest, the interest is taxable unless you roll it over directly into another qualified plan or a traditional individual retirement arrangement (IRA). Form 1040nr If you do not have the Office of Personnel Management (OPM) transfer the interest to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. Form 1040nr See Rollover Rules in Part II for information on how to make a rollover. Form 1040nr Interest is not paid on contributions to the CSRS for service after 1956 unless your service was for more than 1 year but not more than 5 years. Form 1040nr Therefore, many employees who withdraw their contributions under the CSRS do not get interest and do not owe any tax on their refund. Form 1040nr If you do not roll over interest included in your refund, it may qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Form 1040nr If you separate from service before the calendar year in which you reach age 55, it may be subject to an additional 10% tax on early distributions. Form 1040nr For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Form 1040nr A lump-sum distribution is eligible for capital gain treatment or the 10-year tax option only if the plan participant was born before January 2, 1936. Form 1040nr Tax Withholding and Estimated Tax The CSRS or FERS annuity you receive is subject to federal income tax withholding, unless you choose not to have tax withheld. Form 1040nr OPM will tell you how to make the choice. Form 1040nr The choice for no withholding remains in effect until you change it. Form 1040nr These withholding rules also apply to a disability annuity, whether received before or after minimum retirement age. Form 1040nr If you choose not to have tax withheld, or if you do not have enough tax withheld, you may have to make estimated tax payments. Form 1040nr You may owe a penalty if the total of your withheld tax and estimated tax does not cover most of the tax shown on your return. Form 1040nr Generally, you will owe the penalty for 2014 if the additional tax you must pay with your return is $1,000 or more and more than 10% of the tax to be shown on your 2014 return. Form 1040nr For more information, including exceptions to the penalty, see chapter 4 of Publication 505, Tax Withholding and Estimated Tax. Form 1040nr Form CSA 1099R. Form 1040nr   Form CSA 1099R is mailed to you by OPM each year. Form 1040nr It will show any tax you had withheld. Form 1040nr File a copy of Form CSA 1099R with your tax return if any federal income tax was withheld. Form 1040nr    You also can view and download your Form CSA 1099R by visiting the OPM website at  www. Form 1040nr servicesonline. Form 1040nr opm. Form 1040nr gov. Form 1040nr To log in, you will need your retirement CSA claim number and your personal identification number. Form 1040nr Choosing no withholding on payments outside the United States. Form 1040nr   The choice for no withholding generally cannot be made for annuity payments to be delivered outside the United States and its possessions. Form 1040nr   To choose no withholding if you are a U. Form 1040nr S. Form 1040nr citizen or resident alien, you must provide OPM with your home address in the United States or its possessions. Form 1040nr Otherwise, OPM has to withhold tax. Form 1040nr For example, OPM must withhold if you provide a U. Form 1040nr S. Form 1040nr address for a nominee, trustee, or agent (such as a bank) to whom the benefits are to be delivered, but you do not provide your own U. Form 1040nr S. Form 1040nr home address. Form 1040nr   If you do not provide a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to OPM that you are not a U. Form 1040nr S. Form 1040nr citizen, a U. Form 1040nr S. Form 1040nr resident alien, or someone who left the United States to avoid tax. Form 1040nr But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. Form 1040nr For details, see Publication 519, U. Form 1040nr S. Form 1040nr Tax Guide for Aliens. Form 1040nr Withholding certificate. Form 1040nr   If you give OPM a Form W-4P-A, Election of Federal Income Tax Withholding, you can choose not to have tax withheld or you can choose to have tax withheld. Form 1040nr The amount of tax withheld depends on your marital status, the number of withholding allowances, and any additional amount you designate to be withheld. Form 1040nr If you do not make either of these choices, OPM must withhold as if you were married with three withholding allowances. Form 1040nr To change the amount of tax withholding or to stop withholding, call OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Form 1040nr C. Form 1040nr calling area must call 202-606-0500). Form 1040nr No special form is needed. Form 1040nr You will need your retirement CSA or CSF claim number, your social security number, and your personal identification number (PIN) when you call. Form 1040nr If you have TTY/TDD equipment, call 1-855–887–4957. Form 1040nr If you need a PIN, call OPM's Retirement Information Office. Form 1040nr You also can change the amount of withholding or stop withholding online by visiting the OPM website at www. Form 1040nr servicesonline. Form 1040nr opm. Form 1040nr gov. Form 1040nr You will need your retirement CSA or CSF claim number and your PIN. Form 1040nr Withholding from certain lump-sum payments. Form 1040nr   If you leave the federal government before becoming eligible to retire and you apply for a refund of your CSRS or FERS contributions, or you die without leaving a survivor eligible for an annuity, you or your beneficiary will receive a distribution of your contributions to the retirement plan plus any interest payable. Form 1040nr Tax will be withheld at a 20% rate on the interest distributed. Form 1040nr However, tax will not be withheld if you have OPM transfer (roll over) the interest directly to your traditional IRA or other qualified plan. Form 1040nr If you have OPM transfer (roll over) the interest directly to a Roth IRA, the entire amount will be taxed in the current year. Form 1040nr Because no income tax will be withheld at the time of the transfer, you may want to increase your withholding or pay estimated taxes. Form 1040nr See Rollover Rules in Part II. Form 1040nr If you receive only your contributions, no tax will be withheld. Form 1040nr Withholding from Thrift Savings Plan payments. Form 1040nr   Generally, a distribution that you receive from the TSP is subject to federal income tax withholding. Form 1040nr The amount withheld is: 20% if the distribution is an eligible rollover distribution, 10% if it is a nonperiodic distribution other than an eligible rollover distribution, or An amount determined as if you were married with three withholding allowances, unless you submit a withholding certificate (Form W-4P), if it is a periodic distribution. Form 1040nr  However, you usually can choose not to have tax withheld from TSP payments other than eligible rollover distributions. Form 1040nr By January 31 after the end of the year in which you receive a distribution, the TSP will issue Form 1099-R showing the total distributions you received in the prior year and the amount of tax withheld. Form 1040nr   For a detailed discussion of withholding on distributions from the TSP, see Important Tax Information About Payments From Your TSP Account, available from your agency personnel office or from the TSP. Form 1040nr The above document is also available in the “Forms & Publications” section of the TSP website at www. Form 1040nr tsp. Form 1040nr gov. Form 1040nr Estimated tax. Form 1040nr   Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 (after subtracting your withholding and credits) and you expect your withholding and your credits to be less than the smaller of: 90% of the tax to be shown on your income tax return for 2014, or 100% of the tax shown on your 2013 income tax return (110% of that amount if the adjusted gross income shown on the return was more than $150,000 ($75,000 if your filing status for 2014 will be married filing separately)). Form 1040nr The return must cover all 12 months. Form 1040nr   You do not have to pay estimated tax for 2014 if you were a U. Form 1040nr S. Form 1040nr citizen or resident alien for all of 2013 and you had no tax liability for the full 12-month 2013 tax year. Form 1040nr   Publication 505 contains information that you can use to help you figure your estimated tax payments. Form 1040nr Filing Requirements If your gross income, including the taxable part of your annuity, is less than a certain amount, you generally do not have to file a federal income tax return for that year. Form 1040nr The gross income filing requirements for the tax year are in the instructions to Form 1040, 1040A, or 1040EZ. Form 1040nr Children. Form 1040nr   If you are the surviving spouse of a federal employee or retiree and your monthly annuity check includes a survivor annuity for one or more children, each child's annuity counts as his or her own income (not yours) for federal income tax purposes. Form 1040nr   If your child can be claimed as a dependent, treat the taxable part of his or her annuity as unearned income when applying the filing requirements for dependents. Form 1040nr Form CSF 1099R. Form 1040nr   Form CSF 1099R will be mailed to you by January 31 after the end of each tax year. Form 1040nr It will show the total amount of the annuity you received in the past year. Form 1040nr It also should show, separately, the survivor annuity for a child or children. Form 1040nr Only the part that is each individual's survivor annuity should be shown on that individual's Form 1040 or 1040A. Form 1040nr   If your Form CSF 1099R does not show separately the amount paid to you for a child or children, attach a statement to your return, along with a copy of Form CSF 1099R, explaining why the amount shown on the tax return differs from the amount shown on Form CSF 1099R. Form 1040nr    You also can view and download your Form CSF 1099R by visiting the OPM website at  www. Form 1040nr servicesonline. Form 1040nr opm. Form 1040nr gov. Form 1040nr To log in you will need your retirement CSF claim number and personal identification number. Form 1040nr    You may request a Summary of Payments, showing the amounts paid to you for your child(ren), from OPM by calling OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Form 1040nr C. Form 1040nr calling area must call 202-606-0500). Form 1040nr You will need your CSF claim number and your social security number when you call. Form 1040nr Taxable part of annuity. Form 1040nr   To find the taxable part of a retiree's annuity when applying the filing requirements, see the discussion in Part II, Rules for Retirees , or Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled , whichever applies. Form 1040nr To find the taxable part of each survivor annuity when applying the filing requirements, see the discussion in Part IV, Rules for Survivors of Federal Employees , or Part V, Rules for Survivors of Federal Retirees , whichever applies. Form 1040nr Part II Rules for Retirees This part of the publication is for retirees who retired on nondisability retirement. Form 1040nr If you retired on disability before you reached your minimum retirement age, see Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled. Form 1040nr However, on the day after you reach your minimum retirement age, use the rules in this section to report your disability retirement and begin recovering your cost. Form 1040nr Annuity statement. Form 1040nr   The statement you received from OPM when your CSRS or FERS annuity was approved shows the commencing date (the annuity starting date), the gross monthly rate of your annuity benefit, and your total contributions to the retirement plan (your cost). Form 1040nr You will use this information to figure the tax-free recovery of your cost. Form 1040nr Annuity starting date. Form 1040nr   If you retire from federal government service on a regular annuity, your annuity starting date is the commencing date on your annuity statement from OPM. Form 1040nr If something delays payment of your annuity, such as a late application for retirement, it does not affect the date your annuity begins to accrue or your annuity starting date. Form 1040nr Gross monthly rate. Form 1040nr   This is the amount you were to get after any adjustment for electing a survivor's annuity or for electing the lump-sum payment under the alternative annuity option (if either applied) but before any deduction for income tax withholding, insurance premiums, etc. Form 1040nr Your cost. Form 1040nr   Your monthly annuity payment contains an amount on which you have previously paid income tax. Form 1040nr This amount represents part of your contributions to the retirement plan. Form 1040nr Even though you did not receive the money that was contributed to the plan, it was included in your gross income for federal income tax purposes in the years it was taken out of your pay. Form 1040nr   The cost of your annuity is the total of your contributions to the retirement plan, as shown on your annuity statement from OPM. Form 1040nr If you elected the alternative annuity option, it includes any deemed deposits and any deemed redeposits that were added to your lump-sum credit. Form 1040nr (See Lump-sum credit under Alternative Annuity Option, later. Form 1040nr )   If you repaid contributions that you had withdrawn from the retirement plan earlier, or if you paid into the plan to receive full credit for service not subject to retirement deductions, the entire repayment, including any interest, is a part of your cost. Form 1040nr You cannot claim an interest deduction for any interest payments. Form 1040nr You cannot treat these payments as voluntary contributions; they are considered regular employee contributions. Form 1040nr Recovering your cost tax free. Form 1040nr   How you figure the tax-free recovery of the cost of your CSRS or FERS annuity depends on your annuity starting date. Form 1040nr If your annuity starting date is before July 2, 1986, either the Three-Year Rule or the General Rule (both discussed later) applies to your annuity. Form 1040nr If your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method (discussed later). Form 1040nr If your annuity starting date is after November 18, 1996, you must use the Simplified Method. Form 1040nr   Under both the General Rule and the Simplified Method, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your cost, and the taxable part that is the amount of each payment that is more than the part that represents your cost (unless such payment is used for purposes discussed under Distributions Used To Pay Insurance Premiums for Public Safety Officers , later). Form 1040nr The tax-free part is a fixed dollar amount. Form 1040nr It remains the same, even if your annuity is increased. Form 1040nr Generally, this rule applies as long as you receive your annuity. Form 1040nr However, see Exclusion limit , later. Form 1040nr Choosing a survivor annuity after retirement. Form 1040nr    If you retired without a survivor annuity and report your annuity under the Simplified Method, do not change your tax-free monthly amount even if you later choose a survivor annuity. Form 1040nr   If you retired without a survivor annuity and report your annuity under the General Rule, you must figure the tax-free part of your annuity using a new exclusion percentage if you later choose a survivor annuity and take reduced annuity payments. Form 1040nr To figure the new exclusion percentage, reduce your cost by the amount you previously recovered tax free. Form 1040nr Figure the expected return as of the date the reduced annuity begins. Form 1040nr For details on the General Rule, see Publication 939. Form 1040nr Canceling a survivor annuity after retirement. Form 1040nr   If you retired with a survivor annuity payable to your spouse upon your death and you notify OPM that your marriage has ended, your annuity might be increased to remove the reduction for a survivor benefit. Form 1040nr The increased annuity does not change the cost recovery you figured at the annuity starting date. Form 1040nr The tax-free part of each annuity payment remains the same. Form 1040nr    For more information about choosing or canceling a survivor annuity after retirement, contact OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Form 1040nr C. Form 1040nr calling area must call 202-606-0500). Form 1040nr Exclusion limit. Form 1040nr   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. Form 1040nr Annuity starting date after 1986. Form 1040nr   If your annuity starting date is after 1986, the total amount of annuity income that you (or the survivor annuitant) can exclude over the years as a return of your cost cannot exceed your total cost. Form 1040nr Annuity payments you or your survivors receive after the total cost in the plan has been recovered are generally fully taxable. Form 1040nr Example. Form 1040nr Your annuity starting date is after 1986 and you exclude $100 a month under the Simplified Method. Form 1040nr If your cost is $12,000, the exclusion ends after 10 years (120 months). Form 1040nr Thereafter, your entire annuity is generally fully taxable. Form 1040nr Annuity starting date before 1987. Form 1040nr   If your annuity starting date is before 1987, you can continue to take your monthly exclusion figured under the General Rule or Simplified Method for as long as you receive your annuity. Form 1040nr If you chose a joint and survivor annuity, your survivor can continue to take that same exclusion. Form 1040nr The total exclusion may be more than your cost. Form 1040nr Deduction of unrecovered cost. Form 1040nr   If your annuity starting date is after July 1, 1986, and the cost of your annuity has not been fully recovered at your (or the survivor annuitant's) death, a deduction is allowed for the unrecovered cost. Form 1040nr The deduction is claimed on your (or your survivor's) final tax return as a miscellaneous itemized deduction (not subject to the 2%-of-adjusted-gross-income limit). Form 1040nr If your annuity starting date is before July 2, 1986, no tax benefit is allowed for any unrecovered cost at death. Form 1040nr Simplified Method If your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the tax-free part of your CSRS or FERS annuity. Form 1040nr (OPM has figured the taxable amount of your annuity shown on your Form CSA 1099R using the Simplified Method. Form 1040nr ) You could have chosen to use either the Simplified Method or the General Rule if your annuity starting date is after July 1, 1986, but before November 19, 1996. Form 1040nr The Simplified Method does not apply if your annuity starting date is before July 2, 1986. Form 1040nr Under the Simplified Method, you figure the tax-free part of each full monthly payment by dividing your cost by a number of months based on your age. Form 1040nr This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Form 1040nr If your annuity starting date is after 1997 and your annuity includes a survivor benefit for your spouse, this number is based on your combined ages. Form 1040nr Worksheet A. Form 1040nr   Use Worksheet A. Form 1040nr Simplified Method (near the end of this publication), to figure your taxable annuity. Form 1040nr Be sure to keep the completed worksheet. Form 1040nr It will help you figure your taxable amounts for later years. Form 1040nr Instead of Worksheet A, you generally can use the Simplified Method Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR to figure your taxable annuity. Form 1040nr However, you must use Worksheet A and Worksheet B in this publication if you chose the alternative annuity option, discussed later. Form 1040nr Line 2. Form 1040nr   See Your cost , earlier, for an explanation of your cost in the plan. Form 1040nr If your annuity starting date is after November 18, 1996, and you chose the alternative annuity option (explained later), you must reduce your cost by the tax-free part of the lump-sum payment you received. Form 1040nr Line 3. Form 1040nr   The number you enter on line 3 is the appropriate number from Table 1 or 2 representing approximate life expectancies in months. Form 1040nr If your annuity starting date is after 1997, use: Table 1 for an annuity without a survivor benefit, or Table 2 for an annuity with a survivor benefit. Form 1040nr If your annuity starting date is before 1998, use Table 1. Form 1040nr Line 6. Form 1040nr   If you received contributions tax free before 2013, the amount previously recovered tax free that you must enter on line 6 is the total amount from line 10 of last year's worksheet. Form 1040nr If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, this amount includes the tax-free part of the lump-sum payment you received. Form 1040nr Example. Form 1040nr Bill Smith retired from the Federal Government on March 31, 2013, under an annuity that will provide a survivor benefit for his wife, Kathy. Form 1040nr His annuity starting date is April 1, 2013, the annuity is paid in arrears, and he received his first monthly annuity payment on May 1, 2013. Form 1040nr He must use the Simplified Method to figure the tax-free part of his annuity benefits. Form 1040nr Bill's monthly annuity benefit is $1,000. Form 1040nr He had contributed $31,000 to his retirement plan and had received no distributions before his annuity starting date. Form 1040nr At his annuity starting date, he was 65 and Kathy was 57. Form 1040nr Bill's completed Worksheet A is shown later. Form 1040nr To complete line 3, he used Table 2 at the bottom of the worksheet and found that 310 is the number in the second column opposite the age range that includes 122 (his and Kathy's combined ages). Form 1040nr Bill keeps a copy of the completed worksheet for his records. Form 1040nr It will help him (and Kathy, if she survives him) figure the taxable amount of the annuity in later years. Form 1040nr Bill's tax-free monthly amount is $100. Form 1040nr (See line 4 of the worksheet. Form 1040nr ) If he lives to collect more than 310 monthly payments, he will generally have to include in his gross income the full amount of any annuity payments received after 310 payments have been made. Form 1040nr If Bill does not live to collect 310 monthly payments and his wife begins to receive monthly payments, she also will exclude $100 from each monthly payment until 310 payments (Bill's and hers) have been collected. Form 1040nr If she dies before 310 payments have been made, a miscellaneous itemized deduction (not subject to the 2%-of-adjusted- gross-income limit) will be allowed for the unrecovered cost on her final income tax return. Form 1040nr General Rule If your annuity starting date is after November 18, 1996, you cannot use the General Rule to figure the tax-free part of your CSRS or FERS annuity. Form 1040nr If your annuity starting date is after July 1, 1986, but before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. Form 1040nr If your annuity starting date is before July 2, 1986, you could have chosen to use the General Rule only if you could not use the Three-Year Rule. Form 1040nr Under the General Rule, you figure the tax-free part of each full monthly payment by multiplying the initial gross monthly rate of your annuity by an exclusion percentage. Form 1040nr Figuring this percentage is complex and requires the use of actuarial tables. Form 1040nr For these tables and other information about using the General Rule, see Publication 939. Form 1040nr Three-Year Rule If your annuity starting date was before July 2, 1986, you probably had to report your annuity using the Three-Year Rule. Form 1040nr Under this rule, you excluded all the annuity payments from income until you fully recovered your cost. Form 1040nr After your cost was recovered, all payments became fully taxable. Form 1040nr You cannot use another rule to again exclude amounts from income. Form 1040nr The Three-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. Form 1040nr Worksheet A. Form 1040nr Simplified Method for Bill Smith See the instructions in Part II of this publication under Simplified Method. Form 1040nr 1. Form 1040nr Enter the total pension or annuity payments received this year. Form 1040nr Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Form 1040nr $ 8,000 2. Form 1040nr Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. Form 1040nr See Your cost in Part II, Rules for Retirees, earlier 2. Form 1040nr 31,000 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Form 1040nr Otherwise, go to line 3. Form 1040nr   3. Form 1040nr Enter the appropriate number from Table 1 below. Form 1040nr But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. Form 1040nr 3. Form 1040nr 310 4. Form 1040nr Divide line 2 by the number on line 3 4. Form 1040nr 100 5. Form 1040nr Multiply line 4 by the number of months for which this year's payments were made. Form 1040nr If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Form 1040nr Otherwise, go to line 6 5. Form 1040nr 800 6. Form 1040nr Enter any amounts previously recovered tax free in years after 1986. Form 1040nr This is the amount shown on line 10 of your worksheet for last year 6. Form 1040nr 0 7. Form 1040nr Subtract line 6 from line 2 7. Form 1040nr 31,000 8. Form 1040nr Enter the smaller of line 5 or line 7 8. Form 1040nr 800 9. Form 1040nr Taxable amount for year. Form 1040nr Subtract line 8 from line 1. Form 1040nr Enter the result, but not less than zero. Form 1040nr Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. Form 1040nr If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. Form 1040nr If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. Form 1040nr If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. Form 1040nr $7,200 10. Form 1040nr Was your annuity starting date before 1987?   Yes. Form 1040nr Do not complete the rest of this worksheet. Form 1040nr    No. Form 1040nr Add lines 6 and 8. Form 1040nr This is the amount you have recovered tax free through 2013. Form 1040nr You will need this number if you need to fill out this worksheet next year 10. Form 1040nr 800 11. Form 1040nr Balance of cost to be recovered. Form 1040nr Subtract line 10 from line 2. Form 1040nr If zero, you will not have to complete this worksheet next year. Form 1040nr The payments you receive next year will generally be fully taxable 11. Form 1040nr $30,200 Table 1 for Line 3 Above    IF your age on your  annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. Form 1040nr Alternative Annuity Option If you are eligible, you may choose an alternative form of annuity. Form 1040nr If you make this choice, you will receive a lump-sum payment equal to your contributions to the plan and a reduced monthly annuity. Form 1040nr You are eligible to make this choice if you meet all of the following requirements. Form 1040nr You are retiring, but not on disability. Form 1040nr You have a life-threatening illness or other critical medical condition. Form 1040nr You do not have a former spouse entitled to court ordered benefits based on your service. Form 1040nr If you are not eligible or do not choose this alternative annuity, you can skip the following discussion and go to Federal Gift Tax , later. Form 1040nr Lump-Sum Payment The lump-sum payment you receive under the alternative annuity option generally has a tax-free part and a taxable part. Form 1040nr The tax-free part represents part of your cost. Form 1040nr The taxable part represents part of the earnings on your annuity contract. Form 1040nr Your lump-sum credit (discussed later) may include a deemed deposit or redeposit that is treated as being included in your lump-sum payment even though you do not actually receive such amounts. Form 1040nr Deemed deposits and redeposits, which are described later under Lump-sum credit , are taxable to you in the year of retirement. Form 1040nr Your taxable amount may therefore be more than the lump-sum payment you receive. Form 1040nr You must include the taxable part of the lump-sum payment in your income for the year you receive the payment unless you roll it over into another qualified plan or an IRA. Form 1040nr If you do not have OPM transfer the taxable amount to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. Form 1040nr See Rollover Rules , later, for information on how to make a rollover. Form 1040nr OPM can make a direct rollover only up to the amount of the lump-sum payment. Form 1040nr Therefore, to defer tax on the full taxable amount if it is more than the payment, you must add funds from another source. Form 1040nr The taxable part of the lump-sum payment does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Form 1040nr It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55, even if you reach age 55 in the year you receive the lump-sum payment. Form 1040nr For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Form 1040nr Worksheet B. Form 1040nr   Use Worksheet B. Form 1040nr Lump-Sum Payment (near the end of this publication), to figure the taxable part of your lump-sum payment. Form 1040nr Be sure to keep the completed worksheet for your records. Form 1040nr   To complete the worksheet, you will need to know the amount of your lump-sum credit and the present value of your annuity contract. Form 1040nr Lump-sum credit. Form 1040nr   Generally, this is the same amount as the lump-sum payment you receive (the total of your contributions to the retirement system). Form 1040nr However, for purposes of the alternative annuity option, your lump-sum credit also may include deemed deposits and redeposits that OPM advanced to your retirement account so that you are given credit for the service they represent. Form 1040nr Deemed deposits (including interest) are for federal employment during which no retirement contributions were taken out of your pay. Form 1040nr Deemed redeposits (including interest) are for any refunds of retirement contributions that you received and did not repay. Form 1040nr You are treated as if you had received a lump-sum payment equal to the amount of your lump-sum credit and then had made a repayment to OPM of the advanced amounts. Form 1040nr Present value of your annuity contract. Form 1040nr   The present value of your annuity contract is figured using actuarial tables provided by the IRS. Form 1040nr If you are receiving a lump-sum payment under the Alternative Annuity Option, you can write to the address below to find out the present value of your annuity contract. Form 1040nr Internal Revenue Service Attn: Actuarial Group 2 TE/GE SE:T:EP:RA:T:A2 NCA-629 1111 Constitution Ave. Form 1040nr , NW Washington, DC 20224-0002 Example. Form 1040nr David Brown retired from the federal government in 2013, one month after his 55th birthday. Form 1040nr He had contributed $31,000 to his retirement plan and chose to receive a lump-sum payment of that amount under the alternative annuity option. Form 1040nr The present value of his annuity contract was $155,000. Form 1040nr The tax-free part and the taxable part of the lump-sum payment are figured using Worksheet B, as shown below. Form 1040nr The taxable part ($24,800) is also his net cost in the plan, which is used to figure the taxable part of his reduced annuity payments. Form 1040nr See Reduced Annuity , later. Form 1040nr Worksheet B. Form 1040nr Lump-Sum Payment for David Brown See the instructions in Part II of this publication under Alternative Annuity Option . Form 1040nr  1. Form 1040nr Enter your lump-sum credit (your cost in the plan at the annuity starting date) 1. Form 1040nr $ 31,000 2. Form 1040nr Enter the present value of your annuity contract 2. Form 1040nr 155,000 3. Form 1040nr Divide line 1 by line 2 3. Form 1040nr . Form 1040nr 20 4. Form 1040nr Tax-free amount. Form 1040nr Multiply line 1 by line 3. Form 1040nr (Caution: Do not include this amount on line 6 of Worksheet A in this publication. Form 1040nr ) 4. Form 1040nr $6,200 5. Form 1040nr Taxable amount (net cost in the plan). Form 1040nr Subtract line 4 from line 1. Form 1040nr Include this amount in the total on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Form 1040nr Also, enter this amount on line 2 of Worksheet A in this publication. Form 1040nr 5. Form 1040nr $24,800   Lump-sum payment in installments. Form 1040nr   If you choose the alternative annuity option, you usually will receive the lump-sum payment in two equal installments. Form 1040nr You will receive the first installment after you make the choice upon retirement. Form 1040nr The second installment will be paid to you, with interest, in the next calendar year. Form 1040nr (Exceptions to the installment rule are provided for cases of critical medical need. Form 1040nr )   Even though the lump-sum payment is made in installments, the overall tax treatment (explained at the beginning of this discussion) is the same as if the whole payment were paid at once. Form 1040nr If the payment has a tax-free part, you must treat the taxable part as received first. Form 1040nr How to report. Form 1040nr   Add any actual or deemed payment of your lump-sum credit (defined earlier) to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Form 1040nr Add the taxable part to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b, unless you roll over the taxable part to your traditional IRA or a qualified retirement plan. Form 1040nr    If you receive the lump-sum payment in two installments, include any interest paid with the second installment on line 8a of either Form 1040 or Form 1040A, or on line 9a of Form 1040NR. Form 1040nr Reduced Annuity If you have chosen to receive a lump-sum payment under the alternative annuity option, you also will receive reduced monthly annuity payments. Form 1040nr These annuity payments each will have a tax-free and a taxable part. Form 1040nr To figure the tax-free part of each annuity payment, you must use the Simplified Method (Worksheet A). Form 1040nr For instructions on how to complete the worksheet, see Worksheet A under Simplified Method, earlier. Form 1040nr To complete Worksheet A, line 2, you must reduce your cost in the plan by the tax-free part of the lump-sum payment you received. Form 1040nr Enter as your net cost on line 2 the amount from Worksheet B, line 5. Form 1040nr Do not include the tax-free part of the lump-sum payment with other amounts recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. Form 1040nr Example. Form 1040nr The facts are the same as in the example for David Brown in the preceding discussion. Form 1040nr In addition, David received 10 annuity payments in 2013 of $1,200 each. Form 1040nr Using Worksheet A, he figures the taxable part of his annuity payments. Form 1040nr He completes line 2 by reducing his $31,000 cost by the $6,200 tax-free part of his lump-sum payment. Form 1040nr His entry on line 2 is his $24,800 net cost in the plan (the amount from Worksheet B, line 5). Form 1040nr He does not include the tax-free part of his lump-sum payment on Worksheet A, line 6. Form 1040nr David's filled-in Worksheet A is shown on the next page. Form 1040nr Worksheet A. Form 1040nr Simplified Method for David Brown See the instructions in Part II of this publication under Simplified Method . Form 1040nr 1. Form 1040nr Enter the total pension or annuity payments received this year. Form 1040nr Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Form 1040nr $ 12,000 2. Form 1040nr Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. Form 1040nr See Your cost in Part II, Rules for Retirees, earlier 2. Form 1040nr 24,800 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Form 1040nr Otherwise, go to line 3. Form 1040nr   3. Form 1040nr Enter the appropriate number from Table 1 below. Form 1040nr But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. Form 1040nr 3. Form 1040nr 360 4. Form 1040nr Divide line 2 by the number on line 3 4. Form 1040nr 68. Form 1040nr 89 5. Form 1040nr Multiply line 4 by the number of months for which this year's payments were made. Form 1040nr If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Form 1040nr Otherwise, go to line 6 5. Form 1040nr 688. Form 1040nr 90 6. Form 1040nr Enter any amounts previously recovered tax free in years after 1986. Form 1040nr This is the amount shown on line 10 of your worksheet for last year 6. Form 1040nr 0 7. Form 1040nr Subtract line 6 from line 2 7. Form 1040nr 24,800 8. Form 1040nr Enter the smaller of line 5 or line 7 8. Form 1040nr 688. Form 1040nr 90 9. Form 1040nr Taxable amount for year. Form 1040nr Subtract line 8 from line 1. Form 1040nr Enter the result, but not less than zero. Form 1040nr Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. Form 1040nr If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. Form 1040nr If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. Form 1040nr If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. Form 1040nr $11,311. Form 1040nr 10 10. Form 1040nr Was your annuity starting date before 1987?   Yes. Form 1040nr Do not complete the rest of this worksheet. Form 1040nr    No. Form 1040nr Add lines 6 and 8. Form 1040nr This is the amount you have recovered tax free through 2013. Form 1040nr You will need this number if you need to fill out this worksheet next year 10. Form 1040nr 688. Form 1040nr 90 11. Form 1040nr Balance of cost to be recovered. Form 1040nr Subtract line 10 from line 2. Form 1040nr If zero, you will not have to complete this worksheet next year. Form 1040nr The payments you receive next year will generally be fully taxable 11. Form 1040nr $24,111. Form 1040nr 10 Table 1 for Line 3 Above    IF your age on your annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. Form 1040nr Reemployment after choosing the alternative annuity option. Form 1040nr If you chose this option when you retired and then you were reemployed by the Federal Government before retiring again, your Form CSA 1099R may show only the amount of your contributions to your retirement plan during your reemployment. Form 1040nr If the amount on the form does not include all your contributions, disregard it and use your total contributions to figure the taxable part of your annuity payments. Form 1040nr Annuity starting date before November 19, 1996. Form 1040nr   If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, the taxable and tax-free parts of your lump-sum payment and your annuity payments are figured using different rules. Form 1040nr Under those rules, you do not reduce your cost in the plan (Worksheet A, line 2) by the tax-free part of the lump-sum payment. Form 1040nr However, you must include that tax-free amount with other amounts previously recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. Form 1040nr Federal Gift Tax If, through the exercise or nonexercise of an election or option, you provide an annuity for your beneficiary at or after your death, you have made a gift. Form 1040nr The gift may be taxable for gift tax purposes. Form 1040nr The value of the gift is equal to the value of the annuity. Form 1040nr Joint and survivor annuity. Form 1040nr   If the gift is an interest in a joint and survivor annuity where only you and your spouse can receive payments before the death of the last spouse to die, the gift generally will qualify for the unlimited marital deduction. Form 1040nr This will eliminate any gift tax liability with regard to that gift. Form 1040nr   If you provide survivor annuity benefits for someone other than your current spouse, such as your former spouse, the unlimited marital deduction will not apply. Form 1040nr This may result in a taxable gift. Form 1040nr More information. Form 1040nr   For information about the gift tax, see Publication 950, Introduction to Estate and Gift Taxes, and Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. Form 1040nr Retirement During the Past Year If you have recently retired, the following discussions covering annual leave, voluntary contributions, and community property may apply to you. Form 1040nr Annual leave. Form 1040nr   A payment for accrued annual leave received on retirement is a salary payment. Form 1040nr It is taxable as wages in the tax year you receive it. Form 1040nr Voluntary contributions. Form 1040nr   Voluntary contributions to the retirement fund are those made in addition to the regular contributions that were deducted from your salary. Form 1040nr They also include the regular contributions withheld from your salary after you have the years of service necessary for the maximum annuity allowed by law. Form 1040nr Voluntary contributions are not the same as employee contributions to the Thrift Savings Plan. Form 1040nr See Thrift Savings Plan , later. Form 1040nr Additional annuity benefit. Form 1040nr   If you choose to receive an additional annuity benefit from your voluntary contributions, it is treated separately from the annuity benefit that comes from the regular contributions deducted from your salary. Form 1040nr This separate treatment applies for figuring the amounts to be excluded from, and included in, gross income. Form 1040nr It does not matter that you receive only one monthly check covering both benefits. Form 1040nr Each year you will receive a Form CSA 1099R that will show how much of your total annuity received in the past year was from each type of benefit. Form 1040nr   Figure the taxable and tax-free parts of your additional monthly benefits from voluntary contributions using the rules that apply to regular CSRS and FERS annuities, as explained earlier. Form 1040nr Refund of voluntary contributions. Form 1040nr   If you choose to receive a refund of your voluntary contributions plus accrued interest, the interest is taxable to you in the tax year it is distributed unless you roll it over to a traditional IRA or another qualified retirement plan. Form 1040nr If you do not have OPM transfer the interest to a traditional IRA or other qualified retirement plan in a direct rollover, tax will be withheld at a 20% rate. Form 1040nr See Rollover Rules , later. Form 1040nr The interest does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Form 1040nr It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55. Form 1040nr For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Form 1040nr Community property laws. Form 1040nr   State community property laws apply to your annuity. Form 1040nr These laws will affect your income tax only if you file a return separately from your spouse. Form 1040nr   Generally, the determination of whether your annuity is separate income (taxable to you) or community income (taxable to both you and your spouse) is based on your marital status and domicile when you were working. Form 1040nr Regardless of whether you are now living in a community property state or a noncommunity property state, your current annuity may be community income if it is based on services you performed while married and domiciled in a community property state. Form 1040nr   At any time, you have only one domicile even though you may have more than one home. Form 1040nr Your domicile is your fixed and permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. Form 1040nr The question of your domicile is mainly a matter of your intentions as indicated by your actions. Form 1040nr   If your annuity is a mixture of community income and separate income, you must divide it between the two kinds of income. Form 1040nr The division is based on your periods of service and domicile in community and noncommunity property states while you were married. Form 1040nr   For more information, see Publication 555, Community Property. Form 1040nr Reemployment After Retirement If you retired from federal service and are later rehired by the Federal Government as an employee, you can continue to receive your annuity during reemployment. Form 1040nr The employing agency usually will pay you the difference between your salary for your period of reemployment and your annuity. Form 1040nr This amount is taxable as wages. Form 1040nr Your annuity will continue to be taxed just as it was before. Form 1040nr If you are still recovering your cost, you continue to do so. Form 1040nr If you have recovered your cost, the annuity you receive while you are reemployed generally is fully taxable. Form 1040nr Nonresident Aliens The following special rules apply to nonresident alien federal employees performing services outside the United States and to nonresident alien retirees and beneficiaries. Form 1040nr A nonresident alien is an individual who is not a citizen or a resident alien of the United States. Form 1040nr Special rule for figuring your total contributions. Form 1040nr   Your contributions to the retirement plan (your cost) also include the government's contributions to the plan to a certain extent. Form 1040nr You include government contributions that would not have been taxable to you at the time they were contributed if they had been paid directly to you. Form 1040nr For example, government contributions would not have been taxable to you if, at the time made, your services were performed outside the United States. Form 1040nr Thus, your cost is increased by these government contributions and the benefits that you, or your beneficiary, must include in income are reduced. Form 1040nr   This method of figuring your total contributions does not apply to any contributions the government made on your behalf after you became a citizen or a resident alien of the United States. Form 1040nr Limit on taxable amount. Form 1040nr   There is a limit on the taxable amount of payments received from the CSRS, the FERS, or the TSP by a nonresident alien retiree or nonresident alien beneficiary. Form 1040nr Figure this limited taxable amount by multiplying the otherwise taxable amount by a fraction. Form 1040nr The numerator of the fraction is the retiree's total U. Form 1040nr S. Form 1040nr Government basic pay, other than tax-exempt pay for services performed outside the United States. Form 1040nr The denominator is the retiree's total U. Form 1040nr S. Form 1040nr Government basic pay for all services. Form 1040nr    Basic pay includes regular pay plus any standby differential. Form 1040nr It does not include bonuses, overtime pay, certain retroactive pay, uniform or other allowances, or lump-sum leave payments. Form 1040nr   To figure the limited taxable amount of your CSRS or FERS annuity or your TSP distributions, use Worksheet C. Form 1040nr (For an annuity, first complete Worksheet A in this publication. Form 1040nr ) Worksheet C. Form 1040nr Limited Taxable Amount for Nonresident Alien 1. Form 1040nr Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Form 1040nr   2. Form 1040nr Enter the total U. Form 1040nr S. Form 1040nr Government basic pay other than tax-exempt pay for services performed outside the United States 2. Form 1040nr   3. Form 1040nr Enter the total U. Form 1040nr S. Form 1040nr Government basic pay for all services 3. Form 1040nr   4. Form 1040nr Divide line 2 by line 3 4. Form 1040nr   5. Form 1040nr Limited taxable amount. Form 1040nr Multiply line 1 by line 4. Form 1040nr Enter this amount on Form 1040NR, line 17b 5. Form 1040nr   Example 1. Form 1040nr You are a nonresident alien who performed all services for the U. Form 1040nr S. Form 1040nr Government abroad as a nonresident alien. Form 1040nr You retired and began to receive a monthly annuity of $200. Form 1040nr Your total basic pay for all services for the U. Form 1040nr S. Form 1040nr Government was $100,000. Form 1040nr All of your basic pay was tax exempt because it was not U. Form 1040nr S. Form 1040nr source income. Form 1040nr The taxable amount of your annuity using Worksheet A in this publication is $720. Form 1040nr You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. Form 1040nr Worksheet C. Form 1040nr Limited Taxable Amount for Nonresident Alien — Example 1 1. Form 1040nr Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Form 1040nr $ 720 2. Form 1040nr Enter the total U. Form 1040nr S. Form 1040nr Government basic pay other than tax-exempt pay for services performed outside the United States 2. Form 1040nr 0 3. Form 1040nr Enter the total U. Form 1040nr S. Form 1040nr Government basic pay for all services 3. Form 1040nr 100,000 4. Form 1040nr Divide line 2 by line 3 4. Form 1040nr 0 5. Form 1040nr Limited taxable amount. Form 1040nr Multiply line 1 by line 4. Form 1040nr Enter this amount on Form 1040NR, line 17b 5. Form 1040nr 0 Example 2. Form 1040nr You are a nonresident alien who performed services for the U. Form 1040nr S. Form 1040nr Government as a nonresident alien both within the United States and abroad. Form 1040nr You retired and began to receive a monthly annuity of $240. Form 1040nr Your total basic pay for your services for the U. Form 1040nr S. Form 1040nr Government was $120,000; $40,000 was for work done in the United States and $80,000 was for your work done in a foreign country. Form 1040nr The part of your total basic pay for your work done in a foreign country was tax exempt because it was not U. Form 1040nr S. Form 1040nr source income. Form 1040nr The taxable amount of your annuity figured using Worksheet A in this publication is $1,980. Form 1040nr You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. Form 1040nr Worksheet C. Form 1040nr Limited Taxable Amount for Nonresident Alien — Example 2 1. Form 1040nr Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Form 1040nr $ 1,980 2. Form 1040nr Enter the total U. Form 1040nr S. Form 1040nr Government basic pay other than tax-exempt pay for services performed outside the United States 2. Form 1040nr 40,000 3. Form 1040nr Enter the total U. Form 1040nr S. Form 1040nr Government basic pay for all services 3. Form 1040nr 120,000 4. Form 1040nr Divide line 2 by line 3 4. Form 1040nr . Form 1040nr 333 5. Form 1040nr Limited taxable amount. Form 1040nr Multiply line 1 by line 4. Form 1040nr Enter this amount on Form 1040NR, line 17b 5. Form 1040nr 659 Thrift Savings Plan Generally, all of the money in your TSP account is taxed as ordinary income when you receive it. Form 1040nr (However, see Roth TSP balance and Uniformed services TSP accounts, next. Form 1040nr ) This is because neither the contributions to your traditional TSP balance nor its earnings have been included previously in your taxable income. Form 1040nr The way that you withdraw your account balance determines when you must pay the tax. Form 1040nr Roth TSP balance. Form 1040nr   The TSP also offers a Roth TSP option, which allows you to make after-tax contributions into your TSP account. Form 1040nr This means Roth TSP contributions are included in your income. Form 1040nr The contribution limits are the same as the traditional TSP. Form 1040nr You can elect to have part or all of your TSP contributions designated as a Roth TSP. Form 1040nr Agency contributions will be part of your traditional TSP balance. Form 1040nr Also, you cannot roll over any portion of your traditional TSP into your Roth TSP. Form 1040nr   Qualified distributions from your Roth TSP are not included in income. Form 1040nr This applies to both your cost in the account and income earned on that account. Form 1040nr A qualified distribution is generally a distribution that is: Made after a 5-tax-year period of participation, and Made on or after the date you reach age 59½, made to a beneficiary or your estate on or after your death, or attributable to your being disabled. Form 1040nr   For more information, go to the TSP website, www. Form 1040nr tsp. Form 1040nr gov, or the TSP Service Office. Form 1040nr See Publication 575, Pension and Annuity Income, for more information about designated Roth accounts. Form 1040nr Uniformed services TSP accounts. Form 1040nr   If you have a uniformed services TSP account that includes contributions from combat zone pay, the distributions attributable to those contributions are tax exempt. Form 1040nr However, any earnings on those contributions to a traditional TSP balance are subject to tax when they are distributed. Form 1040nr See Roth TSP balance discussed previously to get more information about Roth contributions. Form 1040nr The statement you receive from the TSP will separately state the total amount of your distribution and the amount of your taxable distribution for the year. Form 1040nr You can get more information from the TSP website, www. Form 1040nr tsp. Form 1040nr gov, or the TSP Service Office. Form 1040nr Direct rollover by the TSP. Form 1040nr   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a traditional IRA or other qualified retirement plan, the tax on that part is deferred until you receive payments from the traditional IRA or other plan. Form 1040nr However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. Form 1040nr Also, see Rollover Rules , later. Form 1040nr Direct rollover by the TSP to a Roth IRA. Form 1040nr   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a Roth IRA, the amount transferred will be taxed in the current year. Form 1040nr However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. Form 1040nr Also, see Rollovers to Roth IRAs for more information, later. Form 1040nr Note. Form 1040nr A direct rollover of your Roth contributions and its earnings (if certain conditions are met, see Roth TSP balance , earlier) in your TSP account to a Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA are not subject to tax when they are transferred or when you receive payments from those accounts at a later date. Form 1040nr This is because you already paid tax on those contributions. Form 1040nr You cannot rollover Roth contributions and its earnings in your TSP account to a traditional IRA. Form 1040nr TSP annuity. Form 1040nr   If you ask the TSP to buy an annuity with the money in your account, from traditional contributions and its earnings, the annuity payments are taxed when you receive them. Form 1040nr The payments are not subject to the additional 10% tax on early distributions, even if you are under age 55 when they begin. Form 1040nr However, there is no tax on the annuity payments if the annuity is purchased using the money in your account from Roth contributions and its earnings if certain conditions are met. Form 1040nr See Roth TSP balance , earlier. Form 1040nr This is because you already paid tax on those contributions. Form 1040nr Cash withdrawals. Form 1040nr   If you withdraw any of the money in your TSP account, from traditional contributions and its earnings, it is generally taxed as ordinary income when you receive it unless you roll it over into a traditional IRA or other qualified plan. Form 1040nr (See Rollover Rules , later. Form 1040nr ) If you receive your entire TSP account balance in a single tax year, you may be able to use the 10-year tax option to figure your tax. Form 1040nr See Lump-Sum Distributions in Publication 575 for details. Form 1040nr However, there is no tax if you withdraw money in your TSP account from Roth contributions and its earnings if certain conditions are met. Form 1040nr See Roth TSP balance , earlier. Form 1040nr    To qualify for the 10-year tax option, the plan participant must have been born before January 2, 1936. Form 1040nr   If you receive a single payment or you choose to receive your account balance in monthly payments over a period of less than 10 years, the TSP generally must withhold 20% for federal income tax. Form 1040nr If you choose to receive your account balance in monthly payments over a period of 10 or more years or a period based on your life expectancy, the payments are subject to withholding as if you are married with three withholding allowances, unless you submit a withholding certificate. Form 1040nr See also Withholding from Thrift Savings Plan payments earlier under Tax Withholding and Estimated Tax in Part I. Form 1040nr However, there is no withholding requirement for amounts withdrawn from your TSP account that is from Roth contributions and its earnings, if certain conditions are met. Form 1040nr See Roth TSP balance , earlier, for a discussion of those conditions. Form 1040nr Tax on early distributions. Form 1040nr   Any money paid to you from your TSP account before you reach age 59½ may be subject to an additional 10% tax on early distributions. Form 1040nr However, this additional tax does not apply in certain situations, including any of the following. Form 1040nr You receive the distribution and separate from government service during or after the calendar year in which you reach age 55. Form 1040nr You choose to receive your account balance in monthly payments based on your life expectancy. Form 1040nr You are totally and permanently disabled. Form 1040nr You receive amounts from your Roth contributions since that represents a return of your cost (after-tax money). Form 1040nr The earnings may be subject to the 10% tax depending on whether you met certain conditions. Form 1040nr See Roth TSP balance , earlier. Form 1040nr   For more information, see Tax on Early Distributions in Publication 575. Form 1040nr Outstanding loan. Form 1040nr   If the TSP declares a distribution from your account because money you borrowed has not been repaid when you separate from government service, your account is reduced and the amount of the distribution (your unpaid loan balance and any unpaid interest), from traditional contributions and its earnings, is taxed in the year declared. Form 1040nr The distribution also may be subject to the additional 10% tax on early distributions. Form 1040nr However, the tax will be deferred if you make a rollover contribution to a traditional IRA or other qualified plan equal to the declared distribution amount. Form 1040nr See Rollover Rules , later. Form 1040nr   If you withdraw any money from your TSP account in that same year, the TSP must withhold income tax of 20% of the total of the declared distribution and the amount withdrawn. Form 1040nr However, no withholding is required for portions of the distribution that is from Roth contributions and its earnings, if certain conditions are met. Form 1040nr See Roth TSP balance , earlier. Form 1040nr More information. Form 1040nr   For more information about the TSP, see Summary of the Thrift Savings Plan, distributed to all federal employees. Form 1040nr Also, see Important Tax Information About Payments From Your TSP Account and Special Tax Withholding Rules for Thrift Savings Plan Payments to Nonresident Aliens, which are available from your agency personnel office or from the TSP by calling 1-TSP-YOU-FIRST (1-877-968-3778) and for participants who are deaf, hard of hearing, or have a speech disability, call 1-TSP-THRIFT5 (1-877-847-4385). Form 1040nr    The above documents are also available on the TSP website at www. Form 1040nr tsp. Form 1040nr gov. Form 1040nr Select “Forms & Publications. Form 1040nr ” Rollover Rules Generally, a rollover is a tax-free withdrawal of cash or other assets from one qualified retirement plan or traditional IRA and its reinvestment in another qualified retirement plan or traditional IRA. Form 1040nr You do not include the amount rolled over in your income, and you cannot take a deduction for it. Form 1040nr The amount rolled over is taxed later as the new program pays that amount to you. Form 1040nr If you roll over amounts into a traditional IRA, later distributions of these amounts from the traditional IRA do not qualify for the capital gain or the 10-year tax option. Form 1040nr However, capital gain treatment or the 10-year tax option will be restored if the traditional IRA contains only amounts rolled over from a qualified plan and these amounts are rolled over from the traditional IRA into a qualified retirement plan. Form 1040nr To qualify for the capital gain treatment or 10-year tax option, the plan participant must have been born before January 2, 1936. Form 1040nr You can also roll over a distribution from a qualified retirement plan into a Roth IRA. Form 1040nr Although the transfer of a distribution into a Roth IRA is considered a rollover for Roth IRA purposes, it is not a tax-free transfer unless you are rolling over amounts from Roth contributions and its earnings. Form 1040nr See Rollovers to Roth IRAs , later, for more information. Form 1040nr Qualified retirement plan. Form 1040nr   For this purpose, a qualified retirement plan generally is: A qualified employee plan, A qualified employee annuity, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan. Form 1040nr The CSRS, FERS, and TSP are considered qualified retirement plans. Form 1040nr Distributions eligible for rollover treatment. Form 1040nr   If you receive a refund of your CSRS or FERS contributions when you leave government service, you can roll over any interest you receive on the contributions. Form 1040nr You cannot roll over any part of your CSRS or FERS annuity payments. Form 1040nr   You can roll over a distribution of any part of your TSP account balance except: A distribution of your account balance that you choose to receive in monthly payments over: Your life expectancy, The joint life expectancies of you and your beneficiary, or A period of 10 years or more, A required minimum distribution generally beginning at age 70½, A declared distribution because of an unrepaid loan, if you have not separated from government service (see Outstanding loan under Thrift Savings Plan, earlier), or A hardship distribution. Form 1040nr   In addition, a distribution to your beneficiary generally is not treated as an eligible rollover distribution. Form 1040nr However, see Qualified domestic relations order (QDRO) and Rollovers by surviving spouse , and Rollovers by nonspouse beneficiary , later. Form 1040nr Direct rollover option. Form 1040nr   You can choose to have the OPM or TSP transfer any part of an eligible rollover distribution directly to another qualified retirement plan that accepts rollover distributions or to a traditional IRA or Roth IRA. Form 1040nr   There is an automatic rollover requirement for mandatory distributions. Form 1040nr A mandatory distribution is a distribution made without your consent and before you reach age 62 or normal retirement age, whichever is later. Form 1040nr The automatic rollover requirement applies if the distribution is more than $1,000 and is an eligible rollover distribution. Form 1040nr You can choose to have the distribution paid directly to you or rolled over directly to your traditional or Roth IRA or another qualified retirement plan. Form 1040nr If you do not make this choice, OPM will automatically roll over the distribution into an IRA of a designated trustee or issuer. Form 1040nr No tax withheld. Form 1040nr   If you choose the direct rollover option or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. Form 1040nr However, if the rollover is to a Roth IRA, you may want to choose to have tax withheld since any amount rolled over is generally included in income. Form 1040nr Any part of the eligible rollover distribution paid to you is subject to withholding at a 20% rate. Form 1040nr Direct roll over amounts from Roth contributions and its earnings do not have tax withheld because you already paid tax on those amounts. Form 1040nr Payment to you option. Form 1040nr   If an eligible rollover distribution is paid to you, the OPM or TSP must withhold 20% for income tax even if you plan to roll over the distribution to another qualified retirement plan, traditional or Roth IRA. Form 1040nr However, the full amount is treated as distributed to you even though you actually receive only 80%. Form 1040nr You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional IRA. Form 1040nr Rollovers to Roth IRAs are generally included in income. Form 1040nr Eligible rollover distributions that are from Roth contributions do not have tax withheld because you already paid tax on those amounts. Form 1040nr If you leave government service before the calendar year in which you reach age 55 and are under age 59½ when a distribution is paid to you, you may have to pay an additional 10% tax on any part, including any tax withheld, that you do not roll over. Form 1040nr However, distributions from Roth contributions will not be subject to the 10% additional tax because it is a return of your cost (after-tax money). Form 1040nr Earnings from those contributions may be subject to the 10% additional tax if certain conditions are not met. Form 1040nr See Roth TSP balance , earlier. Form 1040nr Also, see Tax on Early Distributions in Publication 575. Form 1040nr Exception to withholding. Form 1040nr   Withholding from an eligible rollover distribution paid to you is not required if the distributions for your tax year total less than $200. Form 1040nr Partial rollovers. Form 1040nr   A lump-sum distribution may qualify for capital gain treatment or the 10-year tax option if the plan participant was born before January 2, 1936. Form 1040nr See Lump-Sum Distributions in Publication 575. Form 1040nr However, if you roll over any part of the distribution, the part you keep does not qualify for this special tax treatment. Form 1040nr Rolling over more than amount received. Form 1040nr   If you want to roll over more of an eligible rollover distribution than the amount you received after income tax was withheld, you will have to add funds from some other source (such as your savings or borrowed amounts). Form 1040nr Example. Form 1040nr You left government service at age 53. Form 1040nr On February 1, 2013, you receive an eligible rollover distribution of $10,000 from you
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Affordable Care Act Tax Provisions for Individuals and Families

The Affordable Care Act, or health care law, contains health insurance coverage and financial assistance options for individuals and families. The IRS administers the tax provisions included in the law. Visit HealthCare.gov for more information on coverage options and financial assistance.
 

What do I need to know for my 2013 tax return?

Considerations for 2014

  • Open Enrollment for the Health Insurance Marketplace: The open enrollment period to purchase health care coverage through the Health Insurance Marketplace for 2014 began Oct. 1, 2013 and runs through March 31, 2014. When you get health insurance through the marketplace, you may be able to get advance payments of the premium tax credit that will immediately help lower your monthly premium. Learn more at HealthCare.gov.
  • Premium Tax Credit: If you get insurance through the Marketplace, you may be eligible to claim the premium tax credit. You can elect to have advance payments of the tax credit sent directly to your insurer during 2014, or wait to claim the credit when you file your tax return in 2015. If you choose to have advance payments sent to your insurer, you will have to reconcile the payments on your 2014 tax return, which will be filed in 2015. If you’re already receiving advance payments of the credit, you need do nothing at this time unless you have a change in circumstance. Learn More.
  • Change in Circumstances: If you're receiving advance payments of the premium tax credit to help pay for your insurance coverage, you should report life changes, such as income, marital status or family size changes, to your marketplace. Reporting changes will help to make sure you are getting the proper amount of advance payments.
  • Individual Shared Responsibility Payment: Starting January 2014, you and your family must have health care coverage, have an exemption from coverage, or make a payment when you file your 2014 tax return in 2015. Most people already have qualifying health care coverage and will not need to do anything more than maintain that coverage throughout 2014. Learn More.

 

Page Last Reviewed or Updated: 24-Mar-2014

The Form 1040nr

Form 1040nr Publication 3920 - Main Contents Table of Contents Tax ForgivenessYears Eligible for Tax Forgiveness Amount of Tax Forgiven Refund of Taxes Paid How To Claim Tax Forgiveness Payments to SurvivorsSeptember 11th Victim Compensation Fund of 2001 Qualified Disaster Relief Payments Disability Payments Death Benefits Canceled Debt Payments to Survivors of Public Safety Officers Postponed Tax DeadlinesCovered area. Form 1040nr Disaster Area Losses Estate Tax Reduction Structured Settlement Factoring Transactions Illustrated Worksheets B and C Additional Worksheets How To Get Tax Help Tax Forgiveness The IRS will forgive the federal income tax liabilities of decedents who died as a result of the Oklahoma City attack, September 11 attacks, and anthrax attacks. Form 1040nr Income tax is forgiven for these decedents whether they were killed in an attack or in rescue or recovery operations. Form 1040nr Any forgiven tax liability owed to the IRS will not have to be paid. Form 1040nr Any forgiven tax liability that has already been paid will be refunded. Form 1040nr (See Refund of Taxes Paid, later. Form 1040nr ) To determine the amount of tax to be forgiven, read Years Eligible for Tax Forgiveness first. Form 1040nr Then read Amount of Tax Forgiven. Form 1040nr Decedents whose total forgiven tax liability for all eligible years is less than $10,000 are entitled to $10,000 minimum relief. Form 1040nr Even decedents who were not required to file tax returns for the eligible tax years are entitled to $10,000 minimum relief. Form 1040nr See Minimum Amount of Relief later under Amount of Tax Forgiven. Form 1040nr Years Eligible for Tax Forgiveness The following paragraphs explain which years are eligible for tax forgiveness. Form 1040nr Oklahoma City attack. Form 1040nr   For those who died from this attack, income tax is forgiven for 1994 and all later years up to and including the year of death. Form 1040nr Example 1. Form 1040nr A man was killed in the bombing of the federal building in Oklahoma City on April 19, 1995. Form 1040nr His income tax is forgiven for 1994 and 1995. Form 1040nr Example 2. Form 1040nr A woman was wounded while walking outside the federal building in Oklahoma City on April 19, 1995. Form 1040nr She subsequently died of her wounds in 1996. Form 1040nr Her income tax is forgiven for 1994, 1995, and 1996. Form 1040nr September 11 attacks and anthrax attacks. Form 1040nr   For those who die from these attacks, income tax is forgiven for 2000 and all later years up to and including the year of death. Form 1040nr Example 1. Form 1040nr A Pentagon employee died in the September 11 attack. Form 1040nr Her income tax is forgiven for 2000 and 2001. Form 1040nr Example 2. Form 1040nr A visitor to the World Trade Center died in 2002 of wounds he sustained in the September 11 attack. Form 1040nr His income tax liability is forgiven for 2000, 2001, and 2002. Form 1040nr Amount of Tax Forgiven The IRS will forgive the decedent's income tax liability for all years eligible for tax forgiveness. Form 1040nr On a joint return, only the decedent's part of the joint income tax liability is eligible for forgiveness. Form 1040nr To figure the tax to be forgiven, use the following worksheets. Form 1040nr Use Worksheet A for any eligible year the decedent filed a return as single, married filing separately, head of household, or qualifying widow(er). Form 1040nr Use Worksheet B for any eligible year the decedent filed a joint return. Form 1040nr See the illustrated Worksheet B near the end of this publication. Form 1040nr Do not complete Worksheet A or B if the decedent was not required to file tax returns for the eligible tax years. Form 1040nr Instead, complete Worksheet C and file a return for the decedent's last tax year. Form 1040nr See Minimum Amount of Relief, later. Form 1040nr If you need assistance, call the IRS at 1–866–562–5227 Monday through Friday during the following times. Form 1040nr In English–7 a. Form 1040nr m. Form 1040nr to 10 p. Form 1040nr m. Form 1040nr local time. Form 1040nr In Spanish–8 a. Form 1040nr m. Form 1040nr to 9:30 p. Form 1040nr m. Form 1040nr local time. Form 1040nr Both spouses died. Form 1040nr   If both spouses died as a result of a terrorist attack and they filed a joint return for an eligible tax year, fill out Worksheet B for each spouse for that year. Form 1040nr Do this to determine if each spouse qualifies for the minimum relief of $10,000 (discussed later under Minimum Amount of Relief). Form 1040nr If you are certain that neither spouse's total forgiven tax liability for all eligible years is less than $10,000, skip Worksheet B. Form 1040nr However, attach a computation of the forgiven tax liability to the final income tax return or amended tax return for each eligible year. Form 1040nr The forgiven tax liability is the total tax shown on the joint return minus the taxes listed in the instructions for line 4 of Worksheet B. Form 1040nr Residents of community property states. Form 1040nr   If the decedent was domiciled in a community property state and the spouse reported half the community income on a separate return, the surviving spouse can get a refund of taxes paid on his or her share of the decedent's income for the eligible years. Form 1040nr Also, all of the decedent's income taxes paid for the eligible years will be refunded to either the executor or administrator of the estate, or to the surviving spouse if there is no legal representative. Form 1040nr Worksheet B. Form 1040nr Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Form 1040nr 1       2 Enter the decedent's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions. Form 1040nr 2       3 Enter the decedent's total tax. Form 1040nr See the instructions. Form 1040nr 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Form 1040nr See the instructions. Form 1040nr 4       5 Subtract line 4 from line 3. Form 1040nr 5       6 Enter the surviving spouse's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions. Form 1040nr 6       7 Enter the surviving spouse's total tax. Form 1040nr See the instructions. Form 1040nr 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Form 1040nr 8       9 Subtract line 8 from line 7. Form 1040nr 9       10 Add lines 5 and 9. Form 1040nr 10       11 Enter the total tax from the joint return. Form 1040nr See Table 1 on page 5 for the line number for years before 2002. Form 1040nr 11       12 Add lines 4 and 8. Form 1040nr 12       13 Subtract line 12 from line 11. Form 1040nr 13       14 Divide line 5 by line 10. Form 1040nr Enter the result as a decimal. Form 1040nr 14       15 Tax to be forgiven. Form 1040nr Multiply line 13 by line 14 and enter the result. Form 1040nr 15       Note. Form 1040nr If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Form 1040nr Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Form 1040nr If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Form 1040nr The IRS will determine the amount to be refunded. Form 1040nr Worksheet B. Form 1040nr Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Form 1040nr 1       2 Enter the decedent's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions. Form 1040nr 2       3 Enter the decedent's total tax. Form 1040nr See the instructions. Form 1040nr 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Form 1040nr See the instructions. Form 1040nr 4       5 Subtract line 4 from line 3. Form 1040nr 5       6 Enter the surviving spouse's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions. Form 1040nr 6       7 Enter the surviving spouse's total tax. Form 1040nr See the instructions. Form 1040nr 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Form 1040nr 8       9 Subtract line 8 from line 7. Form 1040nr 9       10 Add lines 5 and 9. Form 1040nr 10       11 Enter the total tax from the joint return. Form 1040nr See Table 1 on page 5 for the line number for years before 2002. Form 1040nr 11       12 Add lines 4 and 8. Form 1040nr 12       13 Subtract line 12 from line 11. Form 1040nr 13       14 Divide line 5 by line 10. Form 1040nr Enter the result as a decimal. Form 1040nr 14       15 Tax to be forgiven. Form 1040nr Multiply line 13 by line 14 and enter the result. Form 1040nr 15       Note. Form 1040nr If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Form 1040nr Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Form 1040nr If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Form 1040nr The IRS will determine the amount to be refunded. Form 1040nr Instructions for Worksheet B Table 1. Form 1040nr Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. Form 1040nr * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. Form 1040nr ** File Form 4506 to get a transcript of the decedent's account. Form 1040nr Table 1. Form 1040nr Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. Form 1040nr * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. Form 1040nr ** File Form 4506 to get a transcript of the decedent's account. Form 1040nr Lines 2 and 6. Form 1040nr   Allocate income and deductions in the same manner they would have been allocated if the spouses had filed separate returns. Form 1040nr   Allocate wages and salaries to the spouse who performed the services and received the Form W-2. Form 1040nr Business and investment income (including capital gains) are generally allocated to the spouse who owned the business or investment that produced the income. Form 1040nr Income from a jointly owned business or investment should be allocated equally between the spouses unless there is evidence that shows a different allocation is appropriate. Form 1040nr   Allocate business deductions to the owner of the business. Form 1040nr Allocate personal deductions (such as itemized deductions for mortgage interest and taxes) equally between the spouses unless there is evidence that shows a different allocation is appropriate. Form 1040nr Lines 3 and 7. Form 1040nr   Figure the total tax as if a separate return had been filed. Form 1040nr The total tax is the tax that would have been entered on the tax return line shown in Table 1 if a separate return had been filed. Form 1040nr When figuring the tax using the Tax Table or Tax Rate Schedule, use the “Married filing separately” column in the Tax Table or Tax Rate Schedule Y-2. Form 1040nr   When figuring the total tax, allocate credits and other taxes, if any, in the same manner as they would have been allocated if the spouses had filed separate returns. Form 1040nr If a credit would not have been allowed on a separate return, allocate the credit shown on the joint return between the spouses. Form 1040nr Examples of credits generally not allowed on a separate return are the child and dependent care credit, credit for the elderly, adoption credit, education credits, and earned income credit. Form 1040nr Line 4. Form 1040nr   Enter the total, if any, of the following taxes. Form 1040nr Self-employment tax. Form 1040nr Social security and Medicare tax on tip income not reported to employer. Form 1040nr Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Form 1040nr Tax on excess accumulation in qualified retirement plans. Form 1040nr Household employment taxes. Form 1040nr Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Form 1040nr Tax on golden parachute payments. Form 1040nr Minimum Amount of Relief The minimum amount of relief is $10,000. Form 1040nr If the decedent's total forgiven tax liability for all eligible years is less than $10,000, the difference between $10,000 and the total forgiven tax liability for those years will be treated as a tax payment for the decedent's last tax year. Form 1040nr The IRS will refund the difference as explained under Refund of Taxes Paid. Form 1040nr Use Worksheet C to figure the additional tax payment. Form 1040nr But first complete Worksheet A or B, unless the decedent was not required to file tax returns for the eligible tax years. Form 1040nr Example 1. Form 1040nr An individual who died in the September 11 attacks had an income tax liability of $-0- for 2000 and $6,400 for 2001. Form 1040nr The $6,400 is eligible for forgiveness. Form 1040nr The IRS will forgive $6,400 and treat the difference between $10,000 and $6,400 ($3,600) as a tax payment for 2001. Form 1040nr Example 2. Form 1040nr A child who died in the September 11 attacks had no (-0-) income tax liability for 2000 or 2001. Form 1040nr The IRS will treat $10,000 as a tax payment for 2001. Form 1040nr Income received after date of death. Form 1040nr   Generally, income of the decedent received after the date of death must be reported on Form 1041 if the estate has gross income for the tax year of $600 or more. Form 1040nr Examples are the final paycheck or dividends on stock owned by the decedent. Form 1040nr However, this income is exempt from income tax and is not included on Form 1041 if it is received: After the date of the decedent's death, and Before the end of the decedent's tax year (determined without regard to death). Form 1040nr Nonqualifying income. Form 1040nr   The following income is not exempt from tax. Form 1040nr The tax on it is not eligible for forgiveness. Form 1040nr Deferred compensation that would have been payable if the death had occurred because of an event other than these attacks. Form 1040nr Amounts that would not have been payable but for an action taken after September 11, 2001. Form 1040nr The following are examples of nonqualifying income. Form 1040nr Amounts payable from a qualified retirement plan or IRA to the beneficiary or estate of the decedent. Form 1040nr Amounts payable only as death or survivor's benefits from pre-existing arrangements that would have been paid if the death had occurred for another reason. Form 1040nr Income received as a result of adjustments made by the decedent's employer to a plan or arrangement to accelerate the vesting of restricted property or the payment of nonqualified deferred compensation after the date of the attack. Form 1040nr Interest on savings bonds cashed by the beneficiary of the decedent. Form 1040nr If you are responsible for the estate of a decedent, see Publication 559. Form 1040nr Publication 559 discusses how to complete and file federal income tax returns and explains your responsibility to pay any taxes due. Form 1040nr Instructions for lines 2–9 of Worksheet C. Form 1040nr   The tax that would have been payable on the exempt income (discussed earlier) must be considered when determining whether a decedent is entitled to the $10,000 minimum relief. Form 1040nr To figure the tax that would have been payable, you can use lines 2 through 9 of Worksheet C. Form 1040nr Or, if special requirements are met, you can use the alternative computation instead. Form 1040nr See Alternative computation, later. Form 1040nr   You have to use lines 2–9 (or the alternative computation) to figure the tax that would have been payable even if Form 1041 was not required to be filed. Form 1040nr Use Form 1041 to figure what the taxable income would be without including the exempt income. Form 1040nr Then enter that taxable income (even if a negative number) on line 2 of Worksheet C (or line 1 of Worksheet D, Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C)). Form 1040nr Alternative computation. Form 1040nr   Instead of using lines 2–8 of Worksheet C to figure the tax on exempt income (line 9 of Worksheet C), you may be able to use Worksheet D. Form 1040nr You can use Worksheet D to figure the tax on the exempt income payable by the estate and its beneficiaries only if both of the following requirements are met. Form 1040nr The estate claimed an income distribution deduction on line 18 (Form 1041). Form 1040nr Each beneficiary submits the information necessary to refigure the income tax payable on the exempt income received from the decedent's estate. Form 1040nr If requirement (2) is met but requirement (1) is not, you can still use Worksheet D if: Form 1041 was not required because exempt income was received, and The estate would have claimed an income distribution deduction if the exempt income were taxable. Form 1040nr If you use this alternative computation, skip lines 2–8 of Worksheet C and enter the amount from line 8 of Worksheet D on line 9 of Worksheet C. Form 1040nr Complete the rest of Worksheet C to determine the additional payment allowed. Form 1040nr Worksheet C. Form 1040nr Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Form 1040nr Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Form 1040nr 1 Minimum relief amount. Form 1040nr Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Form 1040nr 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Form 1040nr 3       4 Add lines 2 and 3. Form 1040nr 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Form 1040nr (See Income received after date of death on page 5. Form 1040nr ) 5       6 Add lines 4 and 5. Form 1040nr 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Form 1040nr 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Form 1040nr 8       9 Tax on exempt income. Form 1040nr Subtract line 8 from line 7. Form 1040nr 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Form 1040nr If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Form 1040nr 10       11 Add lines 9 and 10. Form 1040nr 11   12 Additional payment allowed. Form 1040nr If line 11 is $10,000 or more, enter -0- and stop here. Form 1040nr No additional amount is allowed as a tax payment. Form 1040nr Otherwise, subtract line 11 from line 1 and enter the result. Form 1040nr 12   Note. Form 1040nr The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Form 1040nr Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Form 1040nr If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Form 1040nr Write "Sec. Form 1040nr 692(d)(2) Payment" and the amount to the right of the entry space. Form 1040nr Also indicate whether a Form 1041 is being filed for the decedent's estate. Form 1040nr If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Form 1040nr Write “Sec. Form 1040nr 692(d)(2) Payment” on the dotted line to the left of the entry space. Form 1040nr Worksheet C. Form 1040nr Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Form 1040nr Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Form 1040nr 1 Minimum relief amount. Form 1040nr Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Form 1040nr 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Form 1040nr 3       4 Add lines 2 and 3. Form 1040nr 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Form 1040nr (See Income received after date of death on page 5. Form 1040nr ) 5       6 Add lines 4 and 5. Form 1040nr 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Form 1040nr 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Form 1040nr 8       9 Tax on exempt income. Form 1040nr Subtract line 8 from line 7. Form 1040nr 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Form 1040nr If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Form 1040nr 10       11 Add lines 9 and 10. Form 1040nr 11   12 Additional payment allowed. Form 1040nr If line 11 is $10,000 or more, enter -0- and stop here. Form 1040nr No additional amount is allowed as a tax payment. Form 1040nr Otherwise, subtract line 11 from line 1 and enter the result. Form 1040nr 12   Note. Form 1040nr The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Form 1040nr Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Form 1040nr If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Form 1040nr Write "Sec. Form 1040nr 692(d)(2) Payment" and the amount to the right of the entry space. Form 1040nr Also indicate whether a Form 1041 is being filed for the decedent's estate. Form 1040nr If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Form 1040nr Write “Sec. Form 1040nr 692(d)(2) Payment” on the dotted line to the left of the entry space. Form 1040nr Worksheet D. Form 1040nr Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. Form 1040nr (See Income received after date of death on page 5. Form 1040nr ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). Form 1040nr 4   5 Figure the tax on line 1 using Schedule G (Form 1041). Form 1040nr 5   6 Estate's tax on exempt income. Form 1040nr Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. Form 1040nr Figure the total tax that would have been payable by all beneficiaries. Form 1040nr Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Form 1040nr Add the amounts by which each beneficiary's income tax is increased. Form 1040nr 7   8 Add lines 6 and 7. Form 1040nr Enter this amount on line 9 of Worksheet C. Form 1040nr 8   Worksheet D. Form 1040nr Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. Form 1040nr (See Income received after date of death on page 5. Form 1040nr ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). Form 1040nr 4   5 Figure the tax on line 1 using Schedule G (Form 1041). Form 1040nr 5   6 Estate's tax on exempt income. Form 1040nr Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. Form 1040nr Figure the total tax that would have been payable by all beneficiaries. Form 1040nr Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Form 1040nr Add the amounts by which each beneficiary's income tax is increased. Form 1040nr 7   8 Add lines 6 and 7. Form 1040nr Enter this amount on line 9 of Worksheet C. Form 1040nr 8   Refund of Taxes Paid The IRS will refund the following forgiven income tax liabilities. Form 1040nr Income tax liabilities that have been paid. Form 1040nr Income tax liabilities treated as paid because the total tax liability for all years eligible for tax forgiveness is less than $10,000. Form 1040nr See Minimum Amount of Relief, earlier. Form 1040nr Example 1. Form 1040nr A man who died in the September 11 attacks had an income tax liability of $7,500 for 2000 and $6,500 for 2001. Form 1040nr The total, $14,000, is eligible for tax forgiveness. Form 1040nr However, he paid only $13,000 of that amount. Form 1040nr The IRS will refund the $13,000 paid. Form 1040nr Example 2. Form 1040nr A child who died in the September 11 attacks had no income tax liability for 2000 or 2001. Form 1040nr The child qualifies for the minimum relief of $10,000. Form 1040nr The $10,000 is treated as a tax payment for 2001 and will be refunded. Form 1040nr Period for filing a claim for credit or refund. Form 1040nr   To obtain a tax refund on a previously filed income tax return, file an amended return (Form 1040X or an amended Form 1041) within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. Form 1040nr For example, you have until April 15, 2004, to file an amended return on a 2000 Form 1040, 1040A, or 1040EZ that was filed by April 16, 2001, and for which the tax was paid when due. Form 1040nr To obtain a refund on a return that has not been filed, file the return within 3 years of the original due date of the return. Form 1040nr Extension of time for victims of Oklahoma City attack. Form 1040nr   The period described above has been extended for victims of the Oklahoma City attack. Form 1040nr Survivors and personal representatives of these victims have until January 22, 2003, to file an original or amended return. Form 1040nr How To Claim Tax Forgiveness Use the following procedures to claim income tax forgiveness. Form 1040nr Which Form To Use The form you use depends on whether an income tax return for the eligible year was already filed for the decedent. Form 1040nr Return required but not yet filed. Form 1040nr   File Form 1040 if the decedent was a U. Form 1040nr S. Form 1040nr citizen or resident. Form 1040nr File Form 1040NR if the decedent was a nonresident alien. Form 1040nr A nonresident alien is someone who is not a U. Form 1040nr S. Form 1040nr citizen or resident. Form 1040nr Return required and already filed. Form 1040nr   File a separate Form 1040X for each year you are claiming tax relief. Form 1040nr Return not required and not filed. Form 1040nr   File Form 1040 only for the year of death if the decedent was a U. Form 1040nr S. Form 1040nr citizen or resident. Form 1040nr File Form 1040NR if the decedent was a nonresident alien. Form 1040nr Return not required but already filed. Form 1040nr   File Form 1040X only for the year of death. Form 1040nr How to complete the returns. Form 1040nr   Fill out Form 1040 or 1040NR according to its instructions but do not reduce the decedent's tax liability by any taxes that will be forgiven. Form 1040nr Attach to each return a computation of the income tax to be forgiven or a copy of Worksheet A or B. Form 1040nr If filing Form 1040 or Form 1040NR, also attach any Forms W–2. Form 1040nr If the total forgiven tax liability for all eligible years is less than $10,000, attach to the decedent's final return a computation of the additional tax payment allowed or a copy of Worksheet C. Form 1040nr Also, please write one of the following across the top of page 1 of each return. Form 1040nr KITA—Oklahoma City KITA—9/11 KITA—Anthrax “KITA” means “killed in terrorist attack. Form 1040nr ” Need a copy of a previously filed return?   You will find it easier to prepare Form 1040X if you have a copy of the decedent's previously filed tax return. Form 1040nr If you need a copy, use Form 4506. Form 1040nr The IRS will provide a free copy of the tax return if you write “DISASTER” in the top margin of Form 4506. Form 1040nr Attach Letters Testamentary or other evidence to establish that you are authorized to act for the decedent's estate. Form 1040nr Send Form 4506 to the address shown in the form instructions. Form 1040nr Taxpayer identification number. Form 1040nr   A taxpayer identification number must be furnished on the decedent's returns. Form 1040nr This is usually the decedent's social security number (SSN). Form 1040nr However, a nonresident alien who is not eligible to get an SSN should have an individual taxpayer identification number (ITIN). Form 1040nr If the decedent was a nonresident alien, had neither an SSN nor an ITIN, and was not required to file a U. Form 1040nr S. Form 1040nr income tax return for any tax year, do not apply for an ITIN. Form 1040nr You may claim a refund by filing Form 1040NR without an SSN or ITIN. Form 1040nr Necessary Documents Please attach the following documents to the return or amended return. Form 1040nr Proof of death. Form 1040nr   Attach a copy of the death certificate. Form 1040nr If the Department of Defense issued DD Form 1300, Report of Casualty, you can attach that form instead of the death certificate. Form 1040nr Form 1310. Form 1040nr   You must send Form 1310 with all returns and claims for refund, unless either of the following applies. Form 1040nr You are a surviving spouse filing an original or amended joint return with the decedent. Form 1040nr You are a personal representative filing an original Form 1040 or Form 1040NR for the decedent and a court certificate showing your appointment is attached to the return. Form 1040nr A personal representative is an executor or administrator of a decedent's estate, as certified or appointed by the court. Form 1040nr A copy of the decedent's will cannot be accepted as evidence that you are the personal representative. Form 1040nr      If you have proof of death but do not have enough tax information to file a timely claim for a refund, file Form 1040X with Form 1310. Form 1040nr Include a statement saying an amended return will be filed as soon as the necessary tax information is available. Form 1040nr Where To File The IRS has set up a special office for processing returns and claims for tax forgiveness. Form 1040nr Use one of the addresses shown below. Form 1040nr Where you file the returns or claims depends on whether you use the U. Form 1040nr S. Form 1040nr Postal Service or a private delivery service. Form 1040nr Please do not send these returns or claims to any of the addresses shown in the tax form instructions. Form 1040nr U. Form 1040nr S. Form 1040nr Postal Service. Form 1040nr   If you use the U. Form 1040nr S. Form 1040nr Postal Service, file these returns and claims at the following address. Form 1040nr Internal Revenue Service P. Form 1040nr O. Form 1040nr Box 4053 Woburn, MA 01888 Private delivery service. Form 1040nr   Private delivery services cannot deliver items to P. Form 1040nr O. Form 1040nr boxes. Form 1040nr If you use a private delivery service, file these returns and claims at the following address. Form 1040nr Internal Revenue Service Stop 661 310 Lowell St. Form 1040nr Andover, MA 01810 Designated private delivery services. Form 1040nr   You can use the following private delivery services to file these returns and claims. Form 1040nr Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, and Second Day Service. Form 1040nr DHL Worldwide Express (DHL): DHL “Same Day” Service, and DHL USA Overnight. Form 1040nr Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, and FedEx 2Day. Form 1040nr United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Form 1040nr M. Form 1040nr , UPS Worldwide Express Plus, and UPS Worldwide Express. Form 1040nr The private delivery service can tell you how to get written proof of the mailing date. Form 1040nr Payments to Survivors The following section discusses the tax treatment of certain amounts received by survivors. Form 1040nr September 11th Victim Compensation Fund of 2001 Payments from the September 11th Victim Compensation Fund of 2001 are not included in income. Form 1040nr Qualified Disaster Relief Payments Qualified disaster relief payments are not included in income. Form 1040nr These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). Form 1040nr No withholding applies to these payments. Form 1040nr Qualified disaster relief payments include payments you receive (regardless of the source) after September 10, 2001, for the following expenses. Form 1040nr Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a terrorist attack. Form 1040nr Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a terrorist attack. Form 1040nr (A personal residence can be a rented residence or one you own. Form 1040nr ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a terrorist attack. Form 1040nr Qualified disaster relief payments also include the following. Form 1040nr Payments made by common carriers (for example, American Airlines and United Airlines regarding the September 11 attacks) because of death or physical injury incurred as a result of a terrorist attack. Form 1040nr Amounts paid by a federal, state, or local government in connection with a terrorist attack to those affected by the attack. Form 1040nr Qualified disaster relief payments do not include: Insurance or other reimbursements for expenses, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. Form 1040nr Disability Payments For tax years ending after September 10, 2001, disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies), whether outside or within the United States, are not included in income. Form 1040nr Death Benefits Payments received by an individual or the estate of a decedent from the employer of an employee who died as a result of the Oklahoma City or September 11 terrorist attacks, or as a result of the anthrax attacks, are not included in income. Form 1040nr Only the amount that exceeds the benefits that would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack is excludable. Form 1040nr However, the exclusion does apply to incidental death benefits paid under a qualified retirement plan even if these amounts would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack. Form 1040nr If you included death benefits in income on a previously filed return and they are now excludable under the above rule, file Form 1040X to amend that return. Form 1040nr For information on the period for filing Form 1040X, see Period for filing claim for credit or refund earlier under Refund of Taxes Paid. Form 1040nr If that period has expired, you are granted an extension. Form 1040nr You have until January 22, 2003, to file Form 1040X to exclude the death benefits. Form 1040nr On top of page 1 of Form 1040X, write “Extension of Limitations Under PL 107–134, sec. Form 1040nr 102(b)(2). Form 1040nr ” Canceled Debt Canceled debt is not included in your income (or the income of the estate) if: You (or the estate) were liable, or became liable, for the debt of a decedent, and The debt was canceled after September 10, 2001, and before January 1, 2002, because the decedent died as a result of the September 11 attacks or anthrax attacks. Form 1040nr The lender is not required to report the canceled debt on Form 1099–C, Cancellation of Debt. Form 1040nr Payments to Survivors of Public Safety Officers If you are a survivor of a public safety officer who died in the line of duty, certain amounts you receive are not included in income. Form 1040nr Bureau of Justice Assistance payments. Form 1040nr   If you are a surviving dependent of a public safety officer (law enforcement officer or firefighter) who died in the line of duty, do not include in your income the death benefit paid to you by the Bureau of Justice Assistance. Form 1040nr Government plan annuity. Form 1040nr   If you receive a survivor annuity as the child or spouse (or former spouse) of a public safety officer who was killed in the line of duty, you generally do not have to include it in income. Form 1040nr This exclusion applies to the amount of the annuity based on the officer's service as a public safety officer. Form 1040nr For this purpose, the term public safety officer includes police and law enforcement officers, firefighters, and rescue squad and ambulance crews. Form 1040nr More information. Form 1040nr   For more information, see Publication 559. Form 1040nr Postponed Tax Deadlines The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a terrorist attack. Form 1040nr The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. Form 1040nr If any tax deadline is postponed, the IRS will publicize the postponement in the affected area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). Form 1040nr Affected taxpayers. Form 1040nr   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. Form 1040nr Any individual whose main home is located in a covered area (defined later). Form 1040nr Any business entity or sole proprietor whose principal place of business is located in a covered area. Form 1040nr Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained in a covered area. Form 1040nr The main home or principal place of business does not have to be located in the covered area. Form 1040nr Any estate or trust whose tax records necessary to meet a postponed tax deadline are maintained in a covered area. Form 1040nr Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered area. Form 1040nr The spouse on a joint return with a taxpayer who is eligible for postponements. Form 1040nr Any other person determined by the IRS to be affected by a terrorist attack. Form 1040nr Covered area. Form 1040nr   This is an area in which a terrorist attack took place and in which the IRS has decided to postpone tax deadlines for up to 1 year. Form 1040nr Abatement of interest. Form 1040nr   The IRS may abate (forgive) the interest on any underpaid income tax for the length of any postponement. Form 1040nr Disaster Area Losses If your property was damaged or destroyed as a result of the September 11 attacks, you can choose to deduct your disaster loss on your 2000 return (or amended return) rather than on your 2001 return. Form 1040nr You must make this choice to deduct your loss on your 2000 return by the later of the following dates. Form 1040nr The due date (without extensions) for filing your 2001 income tax return (April 15, 2002, if you are a calendar year taxpayer). Form 1040nr The due date (with extensions) for the 2000 return. Form 1040nr For more information about disaster area losses, see Publication 547. Form 1040nr Estate Tax Reduction The federal estate tax is reduced for taxable estates of individuals who died as a result of the Oklahoma City attack, the September 11 attacks, and the anthrax attacks. Form 1040nr The estate tax is computed using a new rate schedule on page 25 of the November 2001 revision of the instructions for Form 706. Form 1040nr The estate tax is reduced by credits against the estate tax, including the unified credit and the state death tax credit. Form 1040nr These credits may reduce or eliminate the estate tax due. Form 1040nr A special rule extends until January 22, 2003, the period of time allowed to file a claim for a refund of estate taxes that have been paid. Form 1040nr Recovery from the September 11th Victim Compensation Fund. Form 1040nr   The value of claims for a decedent's pain and suffering is normally included in the gross estate. Form 1040nr However, if the estate chooses to seek recovery from this fund, the IRS has determined that, in view of the unique circumstances of this situation and the high likelihood that such claims will be valued at a nominal or zero amount, the claims will be valued at zero for estate tax purposes. Form 1040nr Thus, there are no federal estate tax consequences if an estate or beneficiary receives a recovery from this fund. Form 1040nr Which estates must file a return. Form 1040nr   For decedents dying in 2001, Form 706 must be filed by the executor for the estate of every U. Form 1040nr S. Form 1040nr citizen or resident whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $675,000. Form 1040nr Form 706 must be filed within 9 months after the date of decedent's death unless you receive an extension of time to file. Form 1040nr Use Form 4768, Application for Extension of Time To File a Return and/or Pay U. Form 1040nr S. Form 1040nr Estate (and Generation-Skipping Transfer) Taxes, to apply for an extension. Form 1040nr Where to file. Form 1040nr   Returns on which the new rate schedule is used should be sent to the following address, which was not available when Form 706 went to print. Form 1040nr Internal Revenue Service E & G Department/Stop 824T 201 W. Form 1040nr Rivercenter Blvd. Form 1040nr Covington, KY 41011 More information. Form 1040nr   For more information on the federal estate tax, see the instructions for Form 706. Form 1040nr Structured Settlement Factoring Transactions A person who acquires payment rights in a structured settlement arrangement after February 21, 2002, may be subject to a 40% excise tax unless the transfer of the payment rights was approved in advance in a qualified order. Form 1040nr The excise tax is figured on the excess of the undiscounted amount of the payments being acquired over the total amount actually paid to acquire them. Form 1040nr However, this tax will not apply to transactions entered into from February 22, 2002, to July 1, 2002, if certain requirements are met. Form 1040nr For information about these requirements, see Internal Revenue Code section 5891. Form 1040nr Worksheet B Illustrated. Form 1040nr Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Form 1040nr 1 2000 2001   2 Enter the decedent's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions. Form 1040nr 2 $17,259 $14,295   3 Enter the decedent's total tax. Form 1040nr See the instructions. Form 1040nr 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Form 1040nr See the instructions. Form 1040nr 4 3,532 3,109   5 Subtract line 4 from line 3. Form 1040nr 5 2,591 2,141   6 Enter the surviving spouse's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions for line 2. Form 1040nr 6 29,025 29,850   7 Enter the surviving spouse's total tax. Form 1040nr See the instructions. Form 1040nr 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Form 1040nr 8 0 0   9 Subtract line 8 from line 7. Form 1040nr 9 5,277 5,391   10 Add lines 5 and 9. Form 1040nr 10 7,868 7,532   11 Enter the total tax from the joint return. Form 1040nr See Table 1 on page 5 for the line number for years before 2002. Form 1040nr 11 10,789 9,728   12 Add lines 4 and 8. Form 1040nr 12 3,532 3,109   13 Subtract line 12 from line 11. Form 1040nr 13 7,257 6,619   14 Divide line 5 by line 10. Form 1040nr Enter the result as a decimal. Form 1040nr 14 . Form 1040nr 329 . Form 1040nr 284   15 Tax to be forgiven. Form 1040nr Multiply line 13 by line 14 and enter the result. Form 1040nr 15 $2,388 $1,880   Note. Form 1040nr If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Form 1040nr Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Form 1040nr If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Form 1040nr The IRS will determine the amount to be refunded. Form 1040nr Worksheet B Illustrated. Form 1040nr Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Form 1040nr 1 2000 2001   2 Enter the decedent's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions. Form 1040nr 2 $17,259 $14,295   3 Enter the decedent's total tax. Form 1040nr See the instructions. Form 1040nr 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Form 1040nr See the instructions. Form 1040nr 4 3,532 3,109   5 Subtract line 4 from line 3. Form 1040nr 5 2,591 2,141   6 Enter the surviving spouse's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions for line 2. Form 1040nr 6 29,025 29,850   7 Enter the surviving spouse's total tax. Form 1040nr See the instructions. Form 1040nr 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Form 1040nr 8 0 0   9 Subtract line 8 from line 7. Form 1040nr 9 5,277 5,391   10 Add lines 5 and 9. Form 1040nr 10 7,868 7,532   11 Enter the total tax from the joint return. Form 1040nr See Table 1 on page 5 for the line number for years before 2002. Form 1040nr 11 10,789 9,728   12 Add lines 4 and 8. Form 1040nr 12 3,532 3,109   13 Subtract line 12 from line 11. Form 1040nr 13 7,257 6,619   14 Divide line 5 by line 10. Form 1040nr Enter the result as a decimal. Form 1040nr 14 . Form 1040nr 329 . Form 1040nr 284   15 Tax to be forgiven. Form 1040nr Multiply line 13 by line 14 and enter the result. Form 1040nr 15 $2,388 $1,880   Note. Form 1040nr If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Form 1040nr Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Form 1040nr If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Form 1040nr The IRS will determine the amount to be refunded. Form 1040nr Illustrated Worksheets B and C A wife lost her husband in the September 11 attack on the World Trade Center. Form 1040nr They filed a joint return for 2000 and the wife chose to file a joint return as a surviving spouse for 2001. Form 1040nr The returns for 2000 and 2001 showed the following income, deductions, and tax liabilities. Form 1040nr After the husband died, his estate received income of $4,000. Form 1040nr Of that amount, $1,000 is net profit from Schedule C received before the end of 2001. Form 1040nr This net profit is exempt from income tax as explained earlier under Income received after date of death. Form 1040nr The wife files Form 1041 because the gross income of the estate for the tax year ($3,000) is $600 or more. Form 1040nr To determine how much of the husband's tax liability for 2000 and 2001 is to be forgiven, the wife completes Worksheet B. Form 1040nr She also completes Worksheet C because the forgiven tax liabilities for 2000 and 2001 (line 15 of Worksheet B) total less than $10,000. Form 1040nr To claim tax relief for 2000, the wife files Form 1040X and attaches a copy of Worksheet B. Form 1040nr To claim tax relief for 2001, she files Form 1040 and attaches copies of Worksheets B and C. Form 1040nr   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728 Worksheet C Illustrated. Form 1040nr Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Form 1040nr Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Form 1040nr 1 Minimum relief amount. Form 1040nr Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Form 1040nr 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . Form 1040nr 3 0     4 Add lines 2 and 3. Form 1040nr 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. Form 1040nr (See Income received after date of death on page 5. Form 1040nr ) 5 1,000     6 Add lines 4 and 5. Form 1040nr 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). Form 1040nr 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). Form 1040nr 8 435     9 Tax on exempt income. Form 1040nr Subtract line 8 from line 7. Form 1040nr 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Form 1040nr If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Form 1040nr 10 4,268     11 Add lines 9 and 10. Form 1040nr 11 $4,543 12 Additional payment allowed. Form 1040nr If line 11 is $10,000 or more, enter -0- and stop here. Form 1040nr No additional amount is allowed as a tax payment. Form 1040nr Otherwise, subtract line 11 from line 1 and enter the result. Form 1040nr 12 $5,457 Note. Form 1040nr The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Form 1040nr Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Form 1040nr If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Form 1040nr Write "Sec. Form 1040nr 692(d)(2) Payment" and the amount to the right of the entry space. Form 1040nr Also indicate whether a Form 1041 is being filed for the decedent's estate. Form 1040nr If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Form 1040nr Write “Sec. Form 1040nr 692(d)(2) Payment” on the dotted line to the left of the entry space. Form 1040nr Worksheet C Illustrated. Form 1040nr Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Form 1040nr Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Form 1040nr 1 Minimum relief amount. Form 1040nr Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Form 1040nr 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . Form 1040nr 3 0     4 Add lines 2 and 3. Form 1040nr 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. Form 1040nr (See Income received after date of death on page 5. Form 1040nr ) 5 1,000     6 Add lines 4 and 5. Form 1040nr 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). Form 1040nr 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). Form 1040nr 8 435     9 Tax on exempt income. Form 1040nr Subtract line 8 from line 7. Form 1040nr 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Form 1040nr If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Form 1040nr 10 4,268     11 Add lines 9 and 10. Form 1040nr 11 $4,543 12 Additional payment allowed. Form 1040nr If line 11 is $10,000 or more, enter -0- and stop here. Form 1040nr No additional amount is allowed as a tax payment. Form 1040nr Otherwise, subtract line 11 from line 1 and enter the result. Form 1040nr 12 $5,457 Note. Form 1040nr The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Form 1040nr Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Form 1040nr If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Form 1040nr Write "Sec. Form 1040nr 692(d)(2) Payment" and the amount to the right of the entry space. Form 1040nr Also indicate whether a Form 1041 is being filed for the decedent's estate. Form 1040nr If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Form 1040nr Write “Sec. Form 1040nr 692(d)(2) Payment” on the dotted line to the left of the entry space. Form 1040nr Additional Worksheets The following additional worksheets are provided for your convenience. Form 1040nr Worksheet A. Form 1040nr Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Form 1040nr 1       2 Enter the total tax from the decedent's income tax return. Form 1040nr See Table 1 on page 5 for the line number for years before 2002. Form 1040nr 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Form 1040nr (These taxes are not eligible for forgiveness. Form 1040nr )           a Self-employment tax. Form 1040nr 3a         b Social security and Medicare tax on tip income not reported to employer. Form 1040nr 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Form 1040nr 3c         d Tax on excess accumulation in qualified retirement plans. Form 1040nr 3d         e Household employment taxes. Form 1040nr 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Form 1040nr 3f         g Tax on golden parachute payments. Form 1040nr 3g       4 Add lines 3a through 3g. Form 1040nr 4       5 Tax to be forgiven. Form 1040nr Subtract line 4 from line 2. Form 1040nr 5       Note. Form 1040nr If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Form 1040nr Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Form 1040nr If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Form 1040nr The IRS will determine the amount to be refunded. Form 1040nr Worksheet A. Form 1040nr Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Form 1040nr 1       2 Enter the total tax from the decedent's income tax return. Form 1040nr See Table 1 on page 5 for the line number for years before 2002. Form 1040nr 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Form 1040nr (These taxes are not eligible for forgiveness. Form 1040nr )           a Self-employment tax. Form 1040nr 3a         b Social security and Medicare tax on tip income not reported to employer. Form 1040nr 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Form 1040nr 3c         d Tax on excess accumulation in qualified retirement plans. Form 1040nr 3d         e Household employment taxes. Form 1040nr 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Form 1040nr 3f         g Tax on golden parachute payments. Form 1040nr 3g       4 Add lines 3a through 3g. Form 1040nr 4       5 Tax to be forgiven. Form 1040nr Subtract line 4 from line 2. Form 1040nr 5       Note. Form 1040nr If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Form 1040nr Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Form 1040nr If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Form 1040nr The IRS will determine the amount to be refunded. Form 1040nr Worksheet B. Form 1040nr Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Form 1040nr 1       2 Enter the decedent's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions. Form 1040nr 2       3 Enter the decedent's total tax. Form 1040nr See the instructions. Form 1040nr 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Form 1040nr See the instructions. Form 1040nr 4       5 Subtract line 4 from line 3. Form 1040nr 5       6 Enter the surviving spouse's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions. Form 1040nr 6       7 Enter the surviving spouse's total tax. Form 1040nr See the instructions. Form 1040nr 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Form 1040nr 8       9 Subtract line 8 from line 7. Form 1040nr 9       10 Add lines 5 and 9. Form 1040nr 10       11 Enter the total tax from the joint return. Form 1040nr See Table 1 on page 5 for the line number for years before 2002. Form 1040nr 11       12 Add lines 4 and 8. Form 1040nr 12       13 Subtract line 12 from line 11. Form 1040nr 13       14 Divide line 5 by line 10. Form 1040nr Enter the result as a decimal. Form 1040nr 14       15 Tax to be forgiven. Form 1040nr Multiply line 13 by line 14 and enter the result. Form 1040nr 15       Note. Form 1040nr If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Form 1040nr Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Form 1040nr If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Form 1040nr The IRS will determine the amount to be refunded. Form 1040nr Worksheet B. Form 1040nr Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Form 1040nr 1       2 Enter the decedent's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions. Form 1040nr 2       3 Enter the decedent's total tax. Form 1040nr See the instructions. Form 1040nr 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Form 1040nr See the instructions. Form 1040nr 4       5 Subtract line 4 from line 3. Form 1040nr 5       6 Enter the surviving spouse's taxable income. Form 1040nr Figure taxable income as if a separate return had been filed. Form 1040nr See the instructions. Form 1040nr 6       7 Enter the surviving spouse's total tax. Form 1040nr See the instructions. Form 1040nr 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Form 1040nr 8       9 Subtract line 8 from line 7. Form 1040nr 9       10 Add lines 5 and 9. Form 1040nr 10       11 Enter the total tax from the joint return. Form 1040nr See Table 1 on page 5 for the line number for years before 2002. Form 1040nr 11       12 Add lines 4 and 8. Form 1040nr 12       13 Subtract line 12 from line 11. Form 1040nr 13       14 Divide line 5 by line 10. Form 1040nr Enter the result as a decimal. Form 1040nr 14       15 Tax to be forgiven. Form 1040nr Multiply line 13 by line 14 and enter the result. Form 1040nr 15       Note. Form 1040nr If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Form 1040nr Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Form 1040nr If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Form 1040nr The IRS will determine the amount to be refunded. Form 1040nr Worksheet C. Form 1040nr Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Form 1040nr Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Form 1040nr 1 Minimum tax forgiveness. Form 1040nr Note. Form 1040nr Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Form 1040nr 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Form 1040nr 3       4 Add lines 2 and 3. Form 1040nr 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Form 1040nr (See Income received after date of death on page 5. Form 1040nr ) 5       6 Add lines 4 and 5. Form 1040nr 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Form 1040nr 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Form 1040nr 8       9 Tax on exempt income. Form 1040nr Subtract line 8 from line 7. Form 1040nr 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Form 1040nr If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Form 1040nr 10       11 Add lines 9 and 10. Form 1040nr 11   12 Additional payment allowed. Form 1040nr If line 11 is $10,000 or more, enter -0- and stop here. Form 1040nr No additional amount is allowed as a tax payment. Form 1040nr Otherwise, subtract line 11 from line 1 and enter the result. Form 1040nr 12   Note. Form 1040nr The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Form 1040nr Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Form 1040nr If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Form 1040nr Write "Sec. Form 1040nr 692(d)(2) Payment" and the amount to the right of the entry space. Form 1040nr Also indicate whether a Form 1041 is being filed for the decedent's estate. Form 1040nr If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Form 1040nr Write “Sec. Form 1040nr 692(d)(2) Payment” on the dotted line to the left of the entry space. Form 1040nr Worksheet C. Form 1040nr Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Form 1040nr Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Form 1040nr 1 Minimum tax forgiveness. Form 1040nr Note. Form 1040nr Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Form 1040nr 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Form 1040nr 3       4 Add lines 2 and 3. Form 1040nr 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Form 1040nr (See Income received after date of death on page 5. Form 1040nr ) 5       6 Add lines 4 and 5. Form 1040nr 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Form 1040nr 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Form 1040nr 8       9 Tax on exempt income. Form 1040nr Subtract line 8 from line 7. Form 1040nr 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Form 1040nr If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Form 1040nr 10       11 Add lines 9 and 10. Form 1040nr 11   12 Additional payment allowed. Form 1040nr If line 11 is $10,000 or more, enter -0- and stop here. Form 1040nr No additional amount is allowed as a tax payment. Form 1040nr Otherwise, subtract line 11 from line 1 and enter the result. Form 1040nr 12   Note. Form 1040nr The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Form 1040nr Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Form 1040nr If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Form 1040nr Write "Sec. Form 1040nr 692(d)(2) Payment" and the amount to the right of the entry space. Form 1040nr Also indicate whether a Form 1041 is being filed for the decedent's estate. Form 1040nr If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Form 1040nr Write “Sec. Form 1040nr 692(d)(2) Payment” on the dotted line to the left of the entry space. Form 1040nr How To Get Tax Help Special IRS assistance. Form 1040nr   The IRS is providing special help for those affected by the terrorist attacks, as well as survivors and personal representatives of the victims. Form 1040nr We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by the terrorist attacks, or who have other tax issues related to the attacks. Form 1040nr Call 1–866–562–5227 Monday through Friday In English–7 a. Form 1040nr m. Form 1040nr to 10 p. Form 1040nr m. Form 1040nr local time In Spanish–8 a. Form 1040nr m. Form 1040nr to 9:30 p. Form 1040nr m. Form 1040nr local time   The IRS web site at www. Form 1040nr irs. Form 1040nr gov has notices and other tax relief information. Form 1040nr Check it periodically for any new guidance or to see if Congress has enacted new legislation. Form 1040nr   Business taxpayers affected by the attacks can e-mail their questions to corp. Form 1040nr disaster. Form 1040nr relief@irs. Form 1040nr gov. Form 1040nr   For current information on Presidentially declared disaster areas, check the Federal Emergency Management Agency Web site at www. Form 1040nr fema. Form 1040nr gov. Form 1040nr Other help from the IRS. Form 1040nr   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. Form 1040nr By selecting the method that is best for you, you will have quick and easy access to tax help. Form 1040nr Contacting your Taxpayer Advocate. Form 1040nr   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. Form 1040nr   The Taxpayer Advocate represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. Form 1040nr While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. Form 1040nr   To contact your Taxpayer Advocate: Call the Taxpayer Advocate at 1–877–777–4778. Form 1040nr Call the IRS at 1–800–829–1040. Form 1040nr Call, write, or fax the Taxpayer Advocate office in your area. Form 1040nr Call 1–800–829–4059 if you are a TTY/TDD user. Form 1040nr   For more information, see Publication 1546, The Taxpayer Advocate Service of the IRS. Form 1040nr Free tax services. Form 1040nr   To find out what services are available, get Publication 910, Guide to Free Tax Services. Form 1040nr It contains a list of free tax publications and an index of tax topics. Form 1040nr It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. Form 1040nr Personal computer. Form 1040nr With your personal computer and modem, you can access the IRS on the Internet at www. Form 1040nr irs. Form 1040nr gov. Form 1040nr While visiting our web site, you can: Find answers to questions you may have. Form 1040nr Download forms and publications or search for forms and pub