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Free taxes preparation 36. Free taxes preparation   Earned Income Credit (EIC) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Do You Qualify for the Credit?If Improper Claim Made in Prior Year Part A. Free taxes preparation Rules for EveryoneRule 1. Free taxes preparation Your AGI Must Be Less Than: Rule 2. Free taxes preparation You Must Have a Valid Social Security Number (SSN) Rule 3. Free taxes preparation Your Filing Status Cannot Be Married Filing Separately Rule 4. Free taxes preparation You Must Be a U. Free taxes preparation S. Free taxes preparation Citizen or Resident Alien All Year Rule 5. Free taxes preparation You Cannot File Form 2555 or Form 2555-EZ Rule 6. Free taxes preparation Your Investment Income Must Be $3,300 or Less Rule 7. Free taxes preparation You Must Have Earned Income Part B. Free taxes preparation Rules If You Have a Qualifying ChildRule 8. Free taxes preparation Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9. Free taxes preparation Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Rule 10. Free taxes preparation You Cannot Be a Qualifying Child of Another Taxpayer Part C. Free taxes preparation Rules If You Do Not Have a Qualifying ChildRule 11. Free taxes preparation You Must Be at Least Age 25 but Under Age 65 Rule 12. Free taxes preparation You Cannot Be the Dependent of Another Person Rule 13. Free taxes preparation You Cannot Be a Qualifying Child of Another Taxpayer Rule 14. Free taxes preparation You Must Have Lived in the United States More Than Half of the Year Part D. Free taxes preparation Figuring and Claiming the EICRule 15. Free taxes preparation Your Earned Income Must Be Less Than: IRS Will Figure the EIC for You How To Figure the EIC Yourself ExamplesExample 1. Free taxes preparation John and Janet Smith (Form 1040A) Example 2. Free taxes preparation Kelly Green (Form 1040EZ) What's New Earned income amount is more. Free taxes preparation  The maximum amount of income you can earn and still get the credit has increased. Free taxes preparation You may be able to take the credit if: You have three or more qualifying children and you earned less than $46,227 ($51,567 if married filing jointly), You have two qualifying children and you earned less than $43,038 ($48,378 if married filing jointly), You have one qualifying child and you earned less than $37,870 ($43,210 if married filing jointly), or You do not have a qualifying child and you earned less than $14,340 ($19,680 if married filing jointly). Free taxes preparation Your adjusted gross income also must be less than the amount in the above list that applies to you. Free taxes preparation For details, see Rules 1 and 15. Free taxes preparation Investment income amount is more. Free taxes preparation  The maximum amount of investment income you can have and still get the credit has increased to $3,300. Free taxes preparation See Rule 6. Free taxes preparation Reminders Increased EIC on certain joint returns. Free taxes preparation  A married person filing a joint return may get more EIC than someone with the same income but a different filing status. Free taxes preparation As a result, the EIC table has different columns for married persons filing jointly than for everyone else. Free taxes preparation When you look up your EIC in the EIC Table, be sure to use the correct column for your filing status and the number of children you have. Free taxes preparation Online help. Free taxes preparation  You can use the EITC Assistant at www. Free taxes preparation irs. Free taxes preparation gov/eitc to find out if you are eligible for the credit. Free taxes preparation The EITC Assistant is available in English and Spanish. Free taxes preparation EIC questioned by IRS. Free taxes preparation  The IRS may ask you to provide documents to prove you are entitled to claim the EIC. Free taxes preparation We will tell you what documents to send us. Free taxes preparation These may include: birth certificates, school records, medical records, etc. Free taxes preparation The process of establishing your eligibility will delay your refund. Free taxes preparation Introduction The earned income credit (EIC) is a tax credit for certain people who work and have less than $51,567 of earned income. Free taxes preparation A tax credit usually means more money in your pocket. Free taxes preparation It reduces the amount of tax you owe. Free taxes preparation The EIC may also give you a refund. Free taxes preparation How do you get the earned income credit?   To claim the EIC, you must: Qualify by meeting certain rules, and File a tax return, even if you: Do not owe any tax, Did not earn enough money to file a return, or Did not have income taxes withheld from your pay. Free taxes preparation When you complete your return, you can figure your EIC by using a worksheet in the instructions for Form 1040, Form 1040A, or Form 1040EZ. Free taxes preparation Or, if you prefer, you can let the IRS figure the credit for you. Free taxes preparation How will this chapter help you?   This chapter will explain the following. Free taxes preparation The rules you must meet to qualify for the EIC. Free taxes preparation How to figure the EIC. Free taxes preparation Useful Items - You may want to see: Publication 596 Earned Income Credit (EIC) Form (and Instructions) Schedule EIC Earned Income Credit (Qualifying Child Information) 8862 Information To Claim Earned Income Credit After Disallowance Do You Qualify for the Credit? To qualify to claim the EIC, you must first meet all of the rules explained in Part A, Rules for Everyone . Free taxes preparation Then you must meet the rules in Part B, Rules If You Have a Qualifying Child , or Part C, Rules If You Do Not Have a Qualifying Child . Free taxes preparation There is one final rule you must meet in Part D, Figuring and Claiming the EIC . Free taxes preparation You qualify for the credit if you meet all the rules in each part that applies to you. Free taxes preparation If you have a qualifying child, the rules in Parts A, B, and D apply to you. Free taxes preparation If you do not have a qualifying child, the rules in Parts A, C, and D apply to you. Free taxes preparation Table 36-1, Earned Income Credit in a Nutshell. Free taxes preparation   Use Table 36–1 as a guide to Parts A, B, C, and D. Free taxes preparation The table is a summary of all the rules in each part. Free taxes preparation Do you have a qualifying child?   You have a qualifying child only if you have a child who meets the four tests described in Rule 8 and illustrated in Figure 36–1. Free taxes preparation If Improper Claim Made in Prior Year If your EIC for any year after 1996 was denied or reduced for any reason other than a math or clerical error, you must attach a completed Form 8862 to your next tax return to claim the EIC. Free taxes preparation You must also qualify to claim the EIC by meeting all the rules described in this chapter. Free taxes preparation However, if your EIC was denied or reduced as a result of a math or clerical error, do not attach Form 8862 to your next tax return. Free taxes preparation For example, if your arithmetic is incorrect, the IRS can correct it. Free taxes preparation If you do not provide a correct social security number, the IRS can deny the EIC. Free taxes preparation These kinds of errors are called math or clerical errors. Free taxes preparation If your EIC for any year after 1996 was denied and it was determined that your error was due to reckless or intentional disregard of the EIC rules, then you cannot claim the EIC for the next 2 years. Free taxes preparation If your error was due to fraud, then you cannot claim the EIC for the next 10 years. Free taxes preparation More information. Free taxes preparation   See chapter 5 in Publication 596 for more detailed information about the disallowance period and Form 8862. Free taxes preparation Part A. Free taxes preparation Rules for Everyone This part of the chapter discusses Rules 1 through 7. Free taxes preparation You must meet all seven rules to qualify for the earned income credit. Free taxes preparation If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the chapter. Free taxes preparation If you meet all seven rules in this part, then read either Part B or Part C (whichever applies) for more rules you must meet. Free taxes preparation Rule 1. Free taxes preparation Your AGI Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Free taxes preparation Adjusted gross income (AGI). Free taxes preparation   AGI is the amount on line 38 (Form 1040), line 22 (Form 1040A), or line 4 (Form 1040EZ). Free taxes preparation If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. Free taxes preparation Example. Free taxes preparation Your AGI is $38,550, you are single, and you have one qualifying child. Free taxes preparation You cannot claim the EIC because your AGI is not less than $37,870. Free taxes preparation However, if your filing status was married filing jointly, you might be able to claim the EIC because your AGI is less than $43,210. Free taxes preparation Community property. Free taxes preparation   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your AGI includes that portion of both your and your spouse's wages that you are required to include in gross income. Free taxes preparation This is different from the community property rules that apply under Rule 7 . Free taxes preparation Rule 2. Free taxes preparation You Must Have a Valid Social Security Number (SSN) To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). Free taxes preparation Any qualifying child listed on Schedule EIC also must have a valid SSN. Free taxes preparation (See Rule 8 if you have a qualifying child. Free taxes preparation ) If your social security card (or your spouse's, if filing a joint return) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. Free taxes preparation An example of a federally funded benefit is Medicaid. Free taxes preparation If you have a card with the legend “Not valid for employment” and your immigration status has changed so that you are now a U. Free taxes preparation S. Free taxes preparation citizen or permanent resident, ask the SSA for a new social security card without the legend. Free taxes preparation U. Free taxes preparation S. Free taxes preparation citizen. Free taxes preparation   If you were a U. Free taxes preparation S. Free taxes preparation citizen when you received your SSN, you have a valid SSN. Free taxes preparation Valid for work only with INS or DHS authorization. Free taxes preparation   If your social security card reads “Valid for work only with INS authorization” or “Valid for work only with DHS authorization,” you have a valid SSN, but only if that authorization is still valid. Free taxes preparation SSN missing or incorrect. Free taxes preparation   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. Free taxes preparation Other taxpayer identification number. Free taxes preparation   You cannot get the EIC if, instead of an SSN, you (or your spouse, if filing a joint return) have an individual taxpayer identification number (ITIN). Free taxes preparation ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. Free taxes preparation No SSN. Free taxes preparation   If you do not have a valid SSN, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Free taxes preparation You cannot claim the EIC. Free taxes preparation Getting an SSN. Free taxes preparation   If you (or your spouse, if filing a joint return) do not have an SSN, you can apply for one by filing Form SS-5, Application for a Social Security Card, with the SSA. Free taxes preparation You can get Form SS-5 online at www. Free taxes preparation socialsecurity. Free taxes preparation gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. Free taxes preparation Filing deadline approaching and still no SSN. Free taxes preparation   If the filing deadline is approaching and you still do not have an SSN, you have two choices. Free taxes preparation Request an automatic 6-month extension of time to file your return. Free taxes preparation You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Free taxes preparation S. Free taxes preparation Individual Income Tax Return. Free taxes preparation For more information, see chapter 1 . Free taxes preparation File the return on time without claiming the EIC. Free taxes preparation After receiving the SSN, file an amended return (Form 1040X, Amended U. Free taxes preparation S. Free taxes preparation Individual Income Tax Return) claiming the EIC. Free taxes preparation Attach a filled-in Schedule EIC if you have a qualifying child. Free taxes preparation Table 36-1. Free taxes preparation Earned Income Credit in a Nutshell First, you must meet all the rules in this column. Free taxes preparation Second, you must meet all the rules in one of these columns, whichever applies. Free taxes preparation Third, you must meet the rule in this column. Free taxes preparation Part A. Free taxes preparation  Rules for Everyone Part B. Free taxes preparation  Rules If You Have a Qualifying Child Part C. Free taxes preparation  Rules If You Do Not Have a Qualifying Child Part D. Free taxes preparation  Figuring and Claiming the EIC 1. Free taxes preparation Your adjusted gross income (AGI) must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Free taxes preparation 2. Free taxes preparation You must have a valid social security number. Free taxes preparation  3. Free taxes preparation Your filing status cannot be “Married filing separately. Free taxes preparation ” 4. Free taxes preparation You must be a U. Free taxes preparation S. Free taxes preparation citizen or resident alien all year. Free taxes preparation  5. Free taxes preparation You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income). Free taxes preparation  6. Free taxes preparation Your investment income must be $3,300 or less. Free taxes preparation  7. Free taxes preparation You must have earned income. Free taxes preparation 8. Free taxes preparation Your child must meet the relationship, age, residency, and joint return tests. Free taxes preparation  9. Free taxes preparation Your qualifying child cannot be used by more than one person to claim the EIC. Free taxes preparation  10. Free taxes preparation You cannot be a qualifying child of another person. Free taxes preparation 11. Free taxes preparation You must be at least age 25 but under age 65. Free taxes preparation  12. Free taxes preparation You cannot be the dependent of another person. Free taxes preparation  13. Free taxes preparation You cannot be a qualifying child of another person. Free taxes preparation  14. Free taxes preparation You must have lived in the United States more than half of the year. Free taxes preparation 15. Free taxes preparation Your earned income must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Free taxes preparation Rule 3. Free taxes preparation Your Filing Status Cannot Be Married Filing Separately If you are married, you usually must file a joint return to claim the EIC. Free taxes preparation Your filing status cannot be “Married filing separately. Free taxes preparation ” Spouse did not live with you. Free taxes preparation   If you are married and your spouse did not live in your home at any time during the last 6 months of the year, you may be able to file as head of household, instead of married filing separately. Free taxes preparation In that case, you may be able to claim the EIC. Free taxes preparation For detailed information about filing as head of household, see chapter 2 . Free taxes preparation Rule 4. Free taxes preparation You Must Be a U. Free taxes preparation S. Free taxes preparation Citizen or Resident Alien All Year If you (or your spouse, if married) were a nonresident alien for any part of the year, you cannot claim the earned income credit unless your filing status is married filing jointly. Free taxes preparation You can use that filing status only if one spouse is a U. Free taxes preparation S. Free taxes preparation citizen or resident alien and you choose to treat the nonresident spouse as a U. Free taxes preparation S. Free taxes preparation resident. Free taxes preparation If you make this choice, you and your spouse are taxed on your worldwide income. Free taxes preparation If you (or your spouse, if married) were a nonresident alien for any part of the year and your filing status is not married filing jointly, enter “No” on the dotted line next to line 64a (Form 1040) or in the space to the left of line 38a (Form 1040A). Free taxes preparation If you need more information on making this choice, get Publication 519, U. Free taxes preparation S. Free taxes preparation Tax Guide for Aliens. Free taxes preparation Rule 5. Free taxes preparation You Cannot File Form 2555 or Form 2555-EZ You cannot claim the earned income credit if you file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. Free taxes preparation You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. Free taxes preparation U. Free taxes preparation S. Free taxes preparation possessions are not foreign countries. Free taxes preparation See Publication 54, Tax Guide for U. Free taxes preparation S. Free taxes preparation Citizens and Resident Aliens Abroad, for more detailed information. Free taxes preparation Rule 6. Free taxes preparation Your Investment Income Must Be $3,300 or Less You cannot claim the earned income credit unless your investment income is $3,300 or less. Free taxes preparation If your investment income is more than $3,300, you cannot claim the credit. Free taxes preparation For most people, investment income is the total of the following amounts. Free taxes preparation Taxable interest (line 8a of Form 1040 or 1040A). Free taxes preparation Tax-exempt interest (line 8b of Form 1040 or 1040A). Free taxes preparation Dividend income (line 9a of Form 1040 or 1040A). Free taxes preparation Capital gain net income (line 13 of Form 1040, if more than zero, or line 10 of Form 1040A). Free taxes preparation If you file Form 1040EZ, your investment income is the total of the amount of line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. Free taxes preparation However, see Rule 6 in chapter 1 of Publication 596 if: You are filing Schedule E (Form 1040), Form 4797, or Form 8814, or You are reporting income from the rental of personal property on Form 1040, line 21. Free taxes preparation Rule 7. Free taxes preparation You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. Free taxes preparation If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. Free taxes preparation If you are an employee, earned income includes all the taxable income you get from your employer. Free taxes preparation If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the instructions for Form 1040. Free taxes preparation Earned Income Earned income includes all of the following types of income. Free taxes preparation Wages, salaries, tips, and other taxable employee pay. Free taxes preparation Employee pay is earned income only if it is taxable. Free taxes preparation Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Free taxes preparation But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained below. Free taxes preparation Net earnings from self-employment. Free taxes preparation Gross income received as a statutory employee. Free taxes preparation Wages, salaries, and tips. Free taxes preparation   Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. Free taxes preparation You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). Free taxes preparation Nontaxable combat pay election. Free taxes preparation   You can elect to include your nontaxable combat pay in earned income for the earned income credit. Free taxes preparation Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. Free taxes preparation Figure the credit with and without your nontaxable combat pay before making the election. Free taxes preparation   If you make the election, you must include in earned income all nontaxable combat pay you received. Free taxes preparation If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. Free taxes preparation In other words, if one of you makes the election, the other one can also make it but does not have to. Free taxes preparation   The amount of your nontaxable combat pay should be shown in box 12 of your Form W-2 with code “Q. Free taxes preparation ” Self-employed persons and statutory employees. Free taxes preparation   If you are self-employed or received income as a statutory employee, you must use the Form 1040 instructions to see if you qualify to get the EIC. Free taxes preparation Approved Form 4361 or Form 4029 This section is for persons who have an approved: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, or Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. Free taxes preparation Each approved form exempts certain income from social security taxes. Free taxes preparation Each form is discussed here in terms of what is or is not earned income for the EIC. Free taxes preparation Form 4361. Free taxes preparation   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. Free taxes preparation This includes wages, salaries, tips, and other taxable employee compensation. Free taxes preparation A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. Free taxes preparation Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. Free taxes preparation Examples include fees for performing marriages and honoraria for delivering speeches. Free taxes preparation Form 4029. Free taxes preparation   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. Free taxes preparation However, amounts you received as a self-employed individual do not count as earned income. Free taxes preparation Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. Free taxes preparation Disability Benefits If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Free taxes preparation Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. Free taxes preparation You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. Free taxes preparation Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Free taxes preparation Report taxable pension payments on Form 1040, lines 16a and 16b (or Form 1040A, lines 12a and 12b). Free taxes preparation Disability insurance payments. Free taxes preparation   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. Free taxes preparation It does not matter whether you have reached minimum retirement age. Free taxes preparation If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. Free taxes preparation ” Income That Is Not Earned Income Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. Free taxes preparation Do not include any of these items in your earned income. Free taxes preparation Earnings while an inmate. Free taxes preparation   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. Free taxes preparation This includes amounts for work performed while in a work release program or while in a halfway house. Free taxes preparation Workfare payments. Free taxes preparation   Nontaxable workfare payments are not earned income for the EIC. Free taxes preparation These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if private sector employment is not available, or (2) community service program activities. Free taxes preparation Community property. Free taxes preparation   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under those laws. Free taxes preparation That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. Free taxes preparation Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. Free taxes preparation Nevada, Washington, and California domestic partners. Free taxes preparation   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. Free taxes preparation Your earned income for the EIC does not include any amount earned by your partner. Free taxes preparation Your earned income includes the entire amount you earned. Free taxes preparation For details, see Publication 555. Free taxes preparation Conservation Reserve Program (CRP) payments. Free taxes preparation   If you were receiving social security retirement benefits or social security disability benefits at the time you received any CRP payments, your CRP payments are not earned income for the EIC. Free taxes preparation Nontaxable military pay. Free taxes preparation   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. Free taxes preparation Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). Free taxes preparation See Publication 3, Armed Forces' Tax Guide, for more information. Free taxes preparation    Combat pay. Free taxes preparation You can elect to include your nontaxable combat pay in earned income for the EIC. Free taxes preparation See Nontaxable combat pay election, earlier. Free taxes preparation Part B. Free taxes preparation Rules If You Have a Qualifying Child If you have met all of the rules in Part A , read Part B to see if you have a qualifying child. Free taxes preparation Part B discusses Rules 8 through 10. Free taxes preparation You must meet all three of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit with a qualifying child. Free taxes preparation You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. Free taxes preparation (You cannot file Form 1040EZ. Free taxes preparation ) You also must complete Schedule EIC and attach it to your return. Free taxes preparation If you meet all the rules in Part A and this part, read Part D to find out what to do next. Free taxes preparation If you do not meet Rule 8, you do not have a qualifying child. Free taxes preparation Read Part C to find out if you can get the earned income credit without a qualifying child. Free taxes preparation Rule 8. Free taxes preparation Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. Free taxes preparation The four tests are: Relationship, Age, Residency, and Joint return. Free taxes preparation The four tests are illustrated in Figure 36–1. Free taxes preparation The paragraphs that follow contain more information about each test. Free taxes preparation Relationship Test To be your qualifying child, a child must be your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), or Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew). Free taxes preparation The following definitions clarify the relationship test. Free taxes preparation Adopted child. Free taxes preparation   An adopted child is always treated as your own child. Free taxes preparation The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Free taxes preparation Foster child. Free taxes preparation   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgement, decree, or other order of any court of competent jurisdiction. Free taxes preparation An authorized placement agency includes a state or local government agency. Free taxes preparation It also includes a tax-exempt organization licensed by a state. Free taxes preparation In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. Free taxes preparation Example. Free taxes preparation Debbie, who is 12 years old, was placed in your care 2 years ago by an authorized agency responsible for placing children in foster homes. Free taxes preparation Debbie is your foster child. Free taxes preparation Age Test Your child must be: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a student, and younger than you (or your spouse, if filing jointly), or Permanently and totally disabled at any time during 2013, regardless of age. Free taxes preparation    The following examples and definitions clarify the age test. Free taxes preparation Example 1—child not under age 19. Free taxes preparation Your son turned 19 on December 10. Free taxes preparation Unless he was permanently and totally disabled or a student, he is not a qualifying child because, at the end of the year, he was not under age 19. Free taxes preparation Example 2—child not younger than you or your spouse. Free taxes preparation Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. Free taxes preparation He is not disabled. Free taxes preparation Both you and your spouse are 21 years old and you file a joint return. Free taxes preparation Your brother is not your qualifying child because he is not younger than you or your spouse. Free taxes preparation Example 3—child younger than your spouse but not younger than you. Free taxes preparation The facts are the same as in Example 2 except that your spouse is 25 years old. Free taxes preparation Because your brother is younger than your spouse, he is your qualifying child even though he is not younger than you. Free taxes preparation Student defined. Free taxes preparation   To qualify as a student, your child must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regular student body at the school, or A student taking a full-time, on-farm training course given by a school described in (1), or a state, county, or local government. Free taxes preparation The 5 calendar months need not be consecutive. Free taxes preparation   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. Free taxes preparation School defined. Free taxes preparation   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Free taxes preparation However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. Free taxes preparation Vocational high school students. Free taxes preparation   Students who work in co-op jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. Free taxes preparation Permanently and totally disabled. Free taxes preparation   Your child is permanently and totally disabled if both of the following apply. Free taxes preparation He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Free taxes preparation A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Free taxes preparation Residency Test Your child must have lived with you in the United States for more than half of 2013. Free taxes preparation The following definitions clarify the residency test. Free taxes preparation United States. Free taxes preparation   This means the 50 states and the District of Columbia. Free taxes preparation It does not include Puerto Rico or U. Free taxes preparation S. Free taxes preparation possessions such as Guam. Free taxes preparation Homeless shelter. Free taxes preparation   Your home can be any location where you regularly live. Free taxes preparation You do not need a traditional home. Free taxes preparation For example, if your child lived with you for more than half the year in one or more homeless shelters, your child meets the residency test. Free taxes preparation Military personnel stationed outside the United States. Free taxes preparation    U. Free taxes preparation S. Free taxes preparation military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. Free taxes preparation Figure 36-1. Free taxes preparation Tests for Qualifying Child Please click here for the text description of the image. Free taxes preparation Qualifying child Extended active duty. Free taxes preparation   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Free taxes preparation Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. Free taxes preparation Birth or death of a child. Free taxes preparation   A child who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the child's home for more than half the time he or she was alive in 2013. Free taxes preparation Temporary absences. Free taxes preparation   Count time that you or your child is away from home on a temporary absence due to a special circumstance as time the child lived with you. Free taxes preparation Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. Free taxes preparation Kidnapped child. Free taxes preparation    A kidnapped child is treated as living with you for more than half of the year if the child lived with you for more than half the part of the year before the date of the kidnapping. Free taxes preparation The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or your child's family. Free taxes preparation This treatment applies for all years until the child is returned. Free taxes preparation However, the last year this treatment can apply is the earlier of: The year there is a determination that the child is dead, or The year the child would have reached age 18. Free taxes preparation   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. Free taxes preparation Joint Return Test To meet this test, the child cannot file a joint return for the year. Free taxes preparation Exception. Free taxes preparation   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. Free taxes preparation Example 1—child files joint return. Free taxes preparation You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Free taxes preparation He earned $25,000 for the year. Free taxes preparation The couple files a joint return. Free taxes preparation Because your daughter and her husband filed a joint return, she is not your qualifying child. Free taxes preparation Example 2—child files joint return only to claim a refund of withheld tax. Free taxes preparation Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Free taxes preparation They do not have a child. Free taxes preparation Neither is required to file a tax return. Free taxes preparation Taxes were taken out of their pay, so they filed a joint return only to get a refund of the withheld taxes. Free taxes preparation The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Free taxes preparation Example 3—child files joint return to claim American opportunity credit. Free taxes preparation The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Free taxes preparation He and his wife are not required to file a tax return, but they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Free taxes preparation Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. Free taxes preparation The exception to the joint return test does not apply, so your son is not your qualifying child. Free taxes preparation Married child. Free taxes preparation   Even if your child does not file a joint return, if your child was married at the end of the year, he or she cannot be your qualifying child unless: You can claim an exemption for the child, or The reason you cannot claim an exemption for the child is that you let the child's other parent claim the exemption under the Special rule for divorced or separated parents (or parents who live apart) , described later. Free taxes preparation Social security number. Free taxes preparation   The qualifying child must have a valid social security number (SSN) unless the child was born and died in 2013 and you attach to your return a copy of the child's birth certificate, death certificate, or hospital records showing a live birth. Free taxes preparation You cannot claim the EIC on the basis of a qualifying child if: The qualifying child's SSN is missing from your tax return or is incorrect, The qualifying child's social security card says “Not valid for employment” and was issued for use in getting a federally funded benefit, or Instead of an SSN, the qualifying child has: An individual taxpayer identification number (ITIN), which is issued to a noncitizen who cannot get an SSN, or An adoption taxpayer identification number (ATIN), which is issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. Free taxes preparation   If you have more than one qualifying child and only one has a valid SSN, you can use only that child to claim the EIC. Free taxes preparation For more information about SSNs, see Rule 2 . Free taxes preparation Rule 9. Free taxes preparation Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Sometimes a child meets the tests to be a qualifying child of more than one person. Free taxes preparation However, only one of these persons can actually treat the child as a qualifying child. Free taxes preparation Only that person can use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). Free taxes preparation The exemption for the child. Free taxes preparation The child tax credit. Free taxes preparation Head of household filing status. Free taxes preparation The credit for child and dependent care expenses. Free taxes preparation The exclusion for dependent care benefits. Free taxes preparation The EIC. Free taxes preparation The other person cannot take any of these benefits based on this qualifying child. Free taxes preparation In other words, you and the other person cannot agree to divide these tax benefits between you. Free taxes preparation The other person cannot take any of these tax benefits unless he or she has a different qualifying child. Free taxes preparation The tiebreaker rules explained next explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. Free taxes preparation However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. Free taxes preparation Tiebreaker rules. Free taxes preparation   To determine which person can treat the child as a qualifying child to claim the six tax benefits just listed, the following tiebreaker rules apply. Free taxes preparation If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Free taxes preparation If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. Free taxes preparation If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. Free taxes preparation If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. Free taxes preparation If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. Free taxes preparation If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. Free taxes preparation If the child's parents file a joint return with each other, this rule can be applied by treating the parents' total AGI as divided evenly between them. Free taxes preparation See Example 8 . Free taxes preparation   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. Free taxes preparation See Examples 1 through 13 . Free taxes preparation   If you cannot claim the EIC because your qualifying child is treated under the tiebreaker rules as the qualifying child of another person for 2013, you may be able to take the EIC using a different qualifying child, but you cannot take the EIC using the rules in Part C for people who do not have a qualifying child. Free taxes preparation If the other person cannot claim the EIC. Free taxes preparation   If you and someone else have the same qualifying child but the other person cannot claim the EIC because he or she is not eligible or his or her earned income or AGI is too high, you may be able to treat the child as a qualifying child. Free taxes preparation See Examples 6 and 7 . Free taxes preparation But you cannot treat the child as a qualifying child to claim the EIC if the other person uses the child to claim any of the other six tax benefits listed earlier. Free taxes preparation Examples. Free taxes preparation The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. Free taxes preparation Example 1. Free taxes preparation You and your 2-year-old son Jimmy lived with your mother all year. Free taxes preparation You are 25 years old, unmarried, and your AGI is $9,000. Free taxes preparation Your only income was $9,000 from a part-time job. Free taxes preparation Your mother's only income was $20,000 from her job, and her AGI is $20,000. Free taxes preparation Jimmy's father did not live with you or Jimmy. Free taxes preparation The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. Free taxes preparation Jimmy is a qualifying child of both you and your mother because he meets the relationship, age, residency, and joint return tests for both you and your mother. Free taxes preparation However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier for which that person qualifies). Free taxes preparation He is not a qualifying child of anyone else, including his father. Free taxes preparation If you do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can treat him as a qualifying child to claim the EIC (and any of the other tax benefits listed earlier for which she qualifies). Free taxes preparation Example 2. Free taxes preparation The facts are the same as in Example 1 except your AGI is $25,000. Free taxes preparation Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. Free taxes preparation Only you can claim him. Free taxes preparation Example 3. Free taxes preparation The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. Free taxes preparation In this case, you as the child's parent will be the only one allowed to claim Jimmy as a qualifying child for the EIC and the other tax benefits listed earlier for which you qualify. Free taxes preparation The IRS will disallow your mother's claim to the EIC and any of the other tax benefits listed earlier unless she has another qualifying child. Free taxes preparation Example 4. Free taxes preparation The facts are the same as in Example 1 except that you also have two other young children who are qualifying children of both you and your mother. Free taxes preparation Only one of you can claim each child. Free taxes preparation However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Free taxes preparation For example, if you claim one child, your mother can claim the other two. Free taxes preparation Example 5. Free taxes preparation The facts are the same as in Example 1 except that you are only 18 years old. Free taxes preparation This means you are a qualifying child of your mother. Free taxes preparation Because of Rule 10 , discussed next, you cannot claim the EIC and cannot claim Jimmy as a qualifying child. Free taxes preparation Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. Free taxes preparation If your mother meets all the other requirements for claiming the EIC and you do not claim Jimmy as a qualifying child for any of the other tax benefits listed earlier, your mother can claim both you and Jimmy as qualifying children for the EIC. Free taxes preparation Example 6. Free taxes preparation The facts are the same as in Example 1 except that your mother earned $50,000 from her job. Free taxes preparation Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. Free taxes preparation Example 7. Free taxes preparation The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. Free taxes preparation Your earned income is too high for you to claim the EIC. Free taxes preparation But your mother cannot claim the EIC either, because her AGI is not higher than yours. Free taxes preparation Example 8. Free taxes preparation The facts are the same as in Example 1 except that you and Jimmy's father are married to each other, live with Jimmy and your mother, and have an AGI of $30,000 on a joint return. Free taxes preparation If you and your husband do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can claim him instead. Free taxes preparation Even though the AGI on your joint return, $30,000, is more than your mother's AGI of $20,000, for this purpose half of the joint AGI can be treated as yours and half as your husband's. Free taxes preparation In other words, each parent's AGI can be treated as $15,000. Free taxes preparation Example 9. Free taxes preparation You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. Free taxes preparation In August and September, Joey lived with you. Free taxes preparation For the rest of the year, Joey lived with your husband, who is Joey's father. Free taxes preparation Joey is a qualifying child of both you and your husband because he lived with each of you for more than half the year and because he met the relationship, age, and joint return tests for both of you. Free taxes preparation At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the special rule for divorced or separated parents (or parents who live apart) does not apply. Free taxes preparation You and your husband will file separate returns. Free taxes preparation Your husband agrees to let you treat Joey as a qualifying child. Free taxes preparation This means, if your husband does not claim Joey as a qualifying child for any of the tax benefits listed earlier, you can claim him as a qualifying child for any tax benefit listed earlier for which you qualify. Free taxes preparation However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. Free taxes preparation See Rule 3 . Free taxes preparation Example 10. Free taxes preparation The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. Free taxes preparation In this case, only your husband will be allowed to treat Joey as a qualifying child. Free taxes preparation This is because, during 2013, the boy lived with him longer than with you. Free taxes preparation You cannot claim the EIC (either with or without a qualifying child). Free taxes preparation However, your husband's filing status is married filing separately, so he cannot claim the EIC or the credit for child and dependent care expenses. Free taxes preparation See Rule 3 . Free taxes preparation Example 11. Free taxes preparation You, your 5-year-old son and your son's father lived together all year. Free taxes preparation You and your son's father are not married. Free taxes preparation Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, and joint return tests for both you and his father. Free taxes preparation Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. Free taxes preparation Neither of you had any other income. Free taxes preparation Your son's father agrees to let you treat the child as a qualifying child. Free taxes preparation This means, if your son's father does not claim your son as a qualifying child for the EIC or any of the other tax benefits listed earlier, you can claim him as a qualifying child for the EIC and any of the other tax benefits listed earlier for which you qualify. Free taxes preparation Example 12. Free taxes preparation The facts are the same as in Example 11 except that you and your son's father both claim your son as a qualifying child. Free taxes preparation In this case, only your son's father will be allowed to treat your son as a qualifying child. Free taxes preparation This is because his AGI, $14,000, is more than your AGI, $12,000. Free taxes preparation You cannot claim the EIC (either with or without a qualifying child). Free taxes preparation Example 13. Free taxes preparation You and your 7-year-old niece, your sister's child, lived with your mother all year. Free taxes preparation You are 25 years old, and your AGI is $9,300. Free taxes preparation Your only income was from a part-time job. Free taxes preparation Your mother's AGI is $15,000. Free taxes preparation Her only income was from her job. Free taxes preparation Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Free taxes preparation Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, and joint return tests for both you and your mother. Free taxes preparation However, only your mother can treat her as a qualifying child. Free taxes preparation This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Free taxes preparation Special rule for divorced or separated parents (or parents who live apart). Free taxes preparation   A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following statements are true. Free taxes preparation The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of 2013, whether or not they are or were married. Free taxes preparation The child received over half of his or her support for the year from the parents. Free taxes preparation The child is in the custody of one or both parents for more than half of 2013. Free taxes preparation Either of the following statements is true. Free taxes preparation The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return. Free taxes preparation If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Free taxes preparation A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 provides that the noncustodial parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during 2013. Free taxes preparation  For details, see chapter 3. Free taxes preparation Also see Applying Rule 9 to divorced or separated parents (or parents who live apart) , next. Free taxes preparation Applying Rule 9 to divorced or separated parents (or parents who live apart). Free taxes preparation   If a child is treated as the qualifying child of the noncustodial parent under the special rule just described for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. Free taxes preparation However, the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for the EIC and other tax benefits listed earlier in this chapter. Free taxes preparation If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine which person can treat the child as a qualifying child. Free taxes preparation Example 1. Free taxes preparation You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Free taxes preparation Your AGI is $10,000. Free taxes preparation Your mother’s AGI is $25,000. Free taxes preparation Your son's father did not live with you or your son. Free taxes preparation Under the special rule for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child. Free taxes preparation However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the EIC. Free taxes preparation You and your mother did not have any child care expenses or dependent care benefits. Free taxes preparation If you do not claim your son as a qualifying child, your mother can claim him as a qualifying child for the EIC and head of household filing status, if she qualifies for these tax benefits. Free taxes preparation Example 2. Free taxes preparation The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. Free taxes preparation Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Free taxes preparation Example 3. Free taxes preparation The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the EIC. Free taxes preparation Your mother also claims him as a qualifying child for head of household filing status. Free taxes preparation You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. Free taxes preparation The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. Free taxes preparation Rule 10. Free taxes preparation You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Free taxes preparation ) if all of the following statements are true. Free taxes preparation You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Free taxes preparation Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Free taxes preparation You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Free taxes preparation You lived with that person in the United States for more than half of the year. Free taxes preparation You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Free taxes preparation For more details about the tests to be a qualifying child, see Rule 8 . Free taxes preparation If you are a qualifying child of another taxpayer, you cannot claim the EIC. Free taxes preparation This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Free taxes preparation Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). Free taxes preparation Example. Free taxes preparation You and your daughter lived with your mother all year. Free taxes preparation You are 22 years old, unmarried, and attended a trade school full time. Free taxes preparation You had a part-time job and earned $5,700. Free taxes preparation You had no other income. Free taxes preparation Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. Free taxes preparation She can claim the EIC if she meets all the other requirements. Free taxes preparation Because you are your mother's qualifying child, you cannot claim the EIC. Free taxes preparation This is so even if your mother cannot or does not claim the EIC. Free taxes preparation Child of person not required to file a return. Free taxes preparation   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Free taxes preparation Example. Free taxes preparation The facts are the same as in the last example except your mother had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Free taxes preparation As a result, you are not your mother's qualifying child. Free taxes preparation You can claim the EIC if you meet all the other requirements to do so. Free taxes preparation   See Rule 10 in Publication 596 for additional examples. Free taxes preparation Part C. Free taxes preparation Rules If You Do Not Have a Qualifying Child Read this part if you: Do not have a qualifying child, and Have met all the rules in Part A . Free taxes preparation  Part C discusses Rules 11 through 14. Free taxes preparation You must meet all four of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit without a qualifying child. Free taxes preparation If you have a qualifying child, the rules in this part do not apply to you. Free taxes preparation You can claim the credit only if you meet all the rules in Parts A, B, and D. Free taxes preparation See Rule 8 to find out if you have a qualifying child. Free taxes preparation Rule 11. Free taxes preparation You Must Be at Least Age 25 but Under Age 65 You must be at least age 25 but under age 65 at the end of 2013. Free taxes preparation If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65 at the end of 2013. Free taxes preparation It does not matter which spouse meets the age test, as long as one of the spouses does. Free taxes preparation You meet the age test if you were born after December 31, 1948, and before January 2, 1989. Free taxes preparation If you are married filing a joint return, you meet the age test if either you or your spouse was born after December 31, 1948, and before January 2, 1989. Free taxes preparation If neither you nor your spouse meets the age test, you cannot claim the EIC. Free taxes preparation Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Free taxes preparation Death of spouse. Free taxes preparation   If you are filing a joint return with your spouse who died in 2013, you meet the age test if your spouse was at least age 25 but under age 65 at the time of death. Free taxes preparation Example 1. Free taxes preparation You are age 28 and unmarried. Free taxes preparation You meet the age test. Free taxes preparation Example 2—spouse meets age test. Free taxes preparation You are married and filing a joint return. Free taxes preparation You are age 23 and your spouse is age 27. Free taxes preparation You meet the age test because your spouse is at least age 25 but under age 65. Free taxes preparation Example 3—spouse dies in 2013. Free taxes preparation You are married and filing a joint return with your spouse who died in August 2013. Free taxes preparation You are age 67. Free taxes preparation Your spouse would have become age 65 in November 2013. Free taxes preparation Because your spouse was under age 65 when she died, you meet the age test. Free taxes preparation Rule 12. Free taxes preparation You Cannot Be the Dependent of Another Person If you are not filing a joint return, you meet this rule if: You checked box 6a on Form 1040 or 1040A, or You did not check the “You” box on line 5 of Form 1040EZ, and you entered $10,000 on that line. Free taxes preparation If you are filing a joint return, you meet this rule if: You checked both box 6a and box 6b on Form 1040 or 1040A, or You and your spouse did not check either the “You” box or the “Spouse” box on line 5 of Form 1040EZ, and you entered $20,000 on that line. Free taxes preparation If you are not sure whether someone else can claim you (or your spouse, if filing a joint return) as a dependent, read the rules for claiming a dependent in chapter 3. Free taxes preparation If someone else can claim you (or your spouse, if filing a joint return) as a dependent on his or her return, but does not, you still cannot claim the credit. Free taxes preparation Example 1. Free taxes preparation In 2013, you were age 25, single, and living at home with your parents. Free taxes preparation You worked and were not a student. Free taxes preparation You earned $7,500. Free taxes preparation Your parents cannot claim you as a dependent. Free taxes preparation When you file your return, you claim an exemption for yourself by not checking the “You” box on line 5 of your Form 1040EZ and by entering $10,000 on that line. Free taxes preparation You meet this rule. Free taxes preparation You can claim the EIC if you meet all the other requirements. Free taxes preparation Example 2. Free taxes preparation The facts are the same as in Example 1 , except that you earned $2,000. Free taxes preparation Your parents can claim you as a dependent but decide not to. Free taxes preparation You do not meet this rule. Free taxes preparation You cannot claim the credit because your parents could have claimed you as a dependent. Free taxes preparation Joint returns. Free taxes preparation   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. Free taxes preparation   However, another person may be able to claim you as a dependent if you and your spouse file a joint return only to get a refund of income tax withheld or estimated tax paid. Free taxes preparation But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. Free taxes preparation Example 1. Free taxes preparation You are 26 years old. Free taxes preparation You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. Free taxes preparation Neither you nor your wife is required to file a tax return. Free taxes preparation You do not have a child. Free taxes preparation Taxes were taken out of your pay, so you file a joint return only to get a refund of the withheld taxes. Free taxes preparation Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. Free taxes preparation They can claim exemptions for you and your wife if all the other tests to do so are met. Free taxes preparation Example 2. Free taxes preparation The facts are the same as in Example 1 except no taxes were taken out of your pay. Free taxes preparation Also, you and your wife are not required to file a tax return, but you file a joint return to claim an EIC of $63 and get a refund of that amount. Free taxes preparation Because claiming the EIC is your reason for filing the return, you are not filing it only to get a refund of income tax withheld or estimated tax paid. Free taxes preparation Your parents cannot claim an exemption for either you or your wife. Free taxes preparation Rule 13. Free taxes preparation You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Free taxes preparation ) if all of the following statements are true. Free taxes preparation You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Free taxes preparation Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Free taxes preparation You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student (as defined in Rule 8 ), and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Free taxes preparation You lived with that person in the United States for more than half of the year. Free taxes preparation You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Free taxes preparation For more details about the tests to be a qualifying child, see Rule 8 . Free taxes preparation If you are a qualifying child of another taxpayer, you cannot claim the EIC. Free taxes preparation This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Free taxes preparation Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Free taxes preparation Example. Free taxes preparation You lived with your mother all year. Free taxes preparation You are age 26, unmarried, and permanently and totally disabled. Free taxes preparation Your only income was from a community center where you went three days a week to answer telephones. Free taxes preparation You earned $5,000 for the year and provided more than half of your own support. Free taxes preparation Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. Free taxes preparation She can claim the EIC if she meets all the other requirements. Free taxes preparation Because you are a qualifying child of your mother, you cannot claim the EIC. Free taxes preparation This is so even if your mother cannot or does not claim the EIC. Free taxes preparation Joint returns. Free taxes preparation   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. Free taxes preparation   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return for the year only to get a refund of income tax withheld or estimated tax paid. Free taxes preparation But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. Free taxes preparation Child of person not required to file a return. Free taxes preparation   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Free taxes preparation Example. Free taxes preparation You lived all year with your father. Free taxes preparation You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. Free taxes preparation You have no other income, no children, and provided more than half of your own support. Free taxes preparation Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Free taxes preparation As a result, you are not your father's qualifying child. Free taxes preparation You can claim the EIC if you meet all the other requirements to do so. Free taxes preparation   See Rule 13 in Publication 596 for additional examples. Free taxes preparation Rule 14. Free taxes preparation You Must Have Lived in the United States More Than Half of the Year Your home (and your spouse's, if filing a joint return) must have been in the United States for more than half the year. Free taxes preparation If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Free taxes preparation United States. Free taxes preparation   This means the 50 states and the District of Columbia. Free taxes preparation It does not include Puerto Rico or U. Free taxes preparation S. Free taxes preparation possessions such as Guam. Free taxes preparation Homeless shelter. Free taxes preparation   Your home can be any location where you regularly live. Free taxes preparation You do not need a traditional home. Free taxes preparation If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. Free taxes preparation Military personnel stationed outside the United States. Free taxes preparation   U. Free taxes preparation S. Free taxes preparation military personnel stationed outside the United States on extended active duty (defined in Rule 8 ) are considered to live in the United States during that duty period for purposes of the EIC. Free taxes preparation Part D. Free taxes preparation Figuring and Claiming the EIC Read this part if you have met all the rules in Parts A and B, or all the rules in Parts A and C. Free taxes preparation Part D discusses Rule 15 . Free taxes preparation You must meet this rule, in addition to the rules in Parts A and B , or Parts A and C , to qualify for the earned income credit. Free taxes preparation This part of the chapter also explains how to figure the amount of your credit. Free taxes preparation You have two choices. Free taxes preparation Have the IRS figure the EIC for you. Free taxes preparation If you want to do this, see IRS Will Figure the EIC for You . Free taxes preparation Figure the EIC yourself. Free taxes preparation If you want to do this, see How To Figure the EIC Yourself . Free taxes preparation Rule 15. Free taxes preparation Your Earned Income Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Free taxes preparation Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Free taxes preparation Employee pay is earned income only if it is taxable. Free taxes preparation Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Free taxes preparation But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Free taxes preparation Earned income is explained in detail in Rule 7 . Free taxes preparation Figuring earned income. Free taxes preparation   If you are self-employed, a statutory employee, or a member of the clergy or a church employee who files Schedule SE (Form 1040), you will figure your earned income when you fill out Part 4 of EIC Worksheet B in the Form 1040 instructions. Free taxes preparation   Otherwise, figure your earned income by using the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b or the Form 1040A instructions for lines 38a and 38b, or the worksheet in Step 2 of the Form 1040EZ instructions for lines 8a and 8b. Free taxes preparation   When using one of those worksheets to figure your earned income, you will start with the amount on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). Free taxes preparation You will then reduce that amount by any amount included on that line and described in the following list: Scholarship or fellowship grants not reported on a Form W-2, Inmate's income, and Pension or annuity from deferred compensation plans. Free taxes preparation Scholarship or fellowship grants not reported on a Form W-2. Free taxes preparation   A scholarship or fellowship grant that was not reported to you on a Form W-2 is not considered earned income for the earned income credit. Free taxes preparation Inmate's income. Free taxes preparation   Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. Free taxes preparation This includes amounts received for work performed while in a work release program or while in a halfway house. Free taxes preparation If you received any amount for work done while an inmate in a penal institution and that amount is included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “PRI” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Free taxes preparation Pension or annuity from deferred compensation plans. Free taxes preparation   A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan is not considered earned income for the earned income credit. Free taxes preparation If you received such an amount and it was included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “DFC” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Free taxes preparation This amount may be reported in box 11 of your Form W-2. Free taxes preparation If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. Free taxes preparation Clergy. Free taxes preparation   If you are a member of the clergy who files Schedule SE and the amount on line 2 of that schedule includes an amount that was also reported on line 7 (Form 1040), subtract that amount from the amount on line 7 (Form 1040) and enter the result in the first space of the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b. Free taxes preparation Put “Clergy” on the dotted line next to line 64a (Form 1040). Free taxes preparation Church employees. Free taxes preparation    A church employee means an employee (other than a minister or member of a religious order) of a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes. Free taxes preparation If you received wages as a
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IRS Charts a Path Forward with Immediate Actions

The IRS is outlining new actions and next steps to fix problems uncovered with the IRS’ review of tax-exempt applications and improve the wider processes and operations in place at the IRS. The report released by Principal Deputy Commissioner Danny Werfel reflects important findings, aggressive actions and the next steps to help the IRS make improvements. Other documents give specific highlights of those findings and actions.

The following table represents the current status of recommended actions from the Treasury Inspector General for Tax Administration's (TIGTA) report on IRS's tax-exempt area. The status of the recommended actions will be updated monthly. Use the link in the Status column to view the historical updates for each recommendation.

Recommended Actions Status


All recommendations are closed as of Jan. 31, 2014. In Recommendation 7, we continue to report on the number of original backlog cases monthly until those cases are closed. Most recent update: March 24, 2004.

No. Recommendation Lead ECD Status*
1 Ensure that the memorandum requiring the Director, Rulings and Agreements, to approve all original entries and changes to criteria included on the BOLO listing prior to implementation be formalized in the appropriate Internal Revenue Manual. Director, Exempt Organizations

06/28/2013
09/30/2013

 

Completed
2 Develop procedures to better document the reason(s) applications are chosen for review by the team of specialists (e.g., evidence of specific political campaign intervention in the application file or specific reasons the EO function may have for choosing to review the application further based on past experience). Director, Exempt Organizations 09/30/2013 Completed
3 Develop training or workshops to be held before each election cycle including, but not limited to, the proper ways to identify applications that require review of political campaign intervention activities. Director, Exempt Organizations 01/31/2014 Completed
4 Develop a process for the Determinations Unit to formally request assistance from the Technical Unit and the Guidance Unit. The process should include actions to initiate, track, and monitor requests for assistance to ensure that requests are responded to timely. Director, Exempt Organizations

06/28/2013
01/31/2014

 

Completed
5 Develop guidance for specialists on how to process requests for tax-exempt status involving potentially significant political campaign intervention. This guidance should also be posted to the Internet to provide transparency to organizations on the application process. Director, Exempt Organizations

06/27/2013
01/31/2014

 

Completed
6 Develop training or workshops to be held before each election cycle including, but not limited to: a) what constitutes political campaign intervention versus general advocacy (including case examples) and b) the ability to refer for follow-up those organizations that may conduct activities in a future year which may cause them to lose their tax-exempt status. Director, Exempt Organizations 01/31/2014 Completed
7 Provide oversight to ensure that potential political cases, some of which have been in process for three years, are approved or denied expeditiously. Director, Exempt Organizations 01/31/2014 Completed
8 Recommend to IRS Chief Counsel and the Department of the Treasury that guidance on how to measure the “primary activity” of I.R.C. § 501(c)(4) social welfare organizations be included for consideration in the Department of the Treasury Priority Guidance Plan. Commissioner, Tax Exempt and Government Entities 05/03/2013 Completed
9 The Director, EO, should develop training or workshops to be held before each election cycle including, but not limited to, how to word questions in additional information request letters and what additional information should be requested. Director, Exempt Organizations 01/31/2014 Completed

* Green = On schedule; Yellow = Behind schedule; Red = Significant issues

 

Page Last Reviewed or Updated: 24-Mar-2014

The Free Taxes Preparation

Free taxes preparation 9. Free taxes preparation   Worksheets Table of Contents When Should I Figure MAC?Checking the Previous Year's Contributions Available Worksheets Chapter 2 introduced you to the term maximum amount contributable (MAC). Free taxes preparation Generally, your MAC is the lesser of your: Limit on annual additions (chapter 3), or Limit on elective deferrals (chapter 4). Free taxes preparation The worksheets in this chapter can help you figure the cost of incidental life insurance, your includible compensation, your limit on annual additions, your limit on elective deferrals, your limit on catch-up contributions, and your MAC. Free taxes preparation After completing the worksheets, you should maintain them with your 403(b) records for that year. Free taxes preparation Do not attach them to your tax return. Free taxes preparation At the end of the year or the beginning of the next year, you should compare your estimated compensation figures with your actual figures. Free taxes preparation If your compensation is the same as, or more than, the projected amounts and the calculations are correct, then you should simply file these worksheets with your other tax records for the year. Free taxes preparation If your compensation was lower than your estimated figures, you will need to check the amount contributed during the year to determine if contributions are more than your MAC. Free taxes preparation When Should I Figure MAC? At the beginning of each year, you should figure your MAC using a conservative estimate of your compensation. Free taxes preparation Should your income change during the year, you should refigure your MAC based on a revised conservative estimate. Free taxes preparation By doing this, you will be able to determine if contributions to your 403(b) account should be increased or decreased for the year. Free taxes preparation Checking the Previous Year's Contributions At the beginning of the following year, you should refigure your MAC based on your actual earned income. Free taxes preparation At the end of the current year or the beginning of the next year, you should check your contributions to be sure you did not exceed your MAC. Free taxes preparation This means refiguring your limit based on your actual compensation figures for the year. Free taxes preparation This will allow you to determine if the amount contributed is more than the allowable amounts, and possibly avoid additional taxes. Free taxes preparation Available Worksheets The following worksheets have been provided to help you figure your MAC. Free taxes preparation Worksheet A. Free taxes preparation Cost of Incidental Life Insurance. Free taxes preparation Worksheet B. Free taxes preparation Includible Compensation for Your Most Recent Year of Service Worksheet C. Free taxes preparation Limit on Catch-Up Contributions. Free taxes preparation ??? Worksheet 1. Free taxes preparation Maximum Amount Contributable (MAC). Free taxes preparation Worksheet A. Free taxes preparation Cost of Incidental Life Insurance Note. Free taxes preparation Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. Free taxes preparation This amount will be used to figure includible compensation for your most recent year of service. Free taxes preparation 1. Free taxes preparation Enter the value of the contract (amount payable upon your death) 1. Free taxes preparation   2. Free taxes preparation Enter the cash value in the contract at the end of the year 2. Free taxes preparation   3. Free taxes preparation Subtract line 2 from line 1. Free taxes preparation This is the value of your current life insurance protection 3. Free taxes preparation   4. Free taxes preparation Enter your age on your birthday nearest the beginning of the policy year 4. Free taxes preparation   5. Free taxes preparation Enter the 1-year term premium for $1,000 of life insurance based on your age. Free taxes preparation (From Figure 3-1) 5. Free taxes preparation   6. Free taxes preparation Divide line 3 by $1,000 6. Free taxes preparation   7. Free taxes preparation Multiply line 6 by line 5. Free taxes preparation This is the cost of your incidental life insurance 7. Free taxes preparation   Worksheet B. Free taxes preparation Includible Compensation for Your Most Recent Year of Service1 Note. Free taxes preparation Use this worksheet to figure includible compensation for your most recent year of service. Free taxes preparation 1. Free taxes preparation Enter your includible wages from the employer maintaining your 403(b) account for your most recent year of service 1. Free taxes preparation   2. Free taxes preparation Enter elective deferrals excluded from your gross income for your most recent year of service2 2. Free taxes preparation   3. Free taxes preparation Enter amounts contributed or deferred by your employer under a cafeteria plan for your most recent year of service 3. Free taxes preparation   4. Free taxes preparation Enter amounts contributed or deferred by your employer according to your election to your 457 account (a nonqualified plan of a state or local government or of a tax-exempt organization) for your most recent year of service 4. Free taxes preparation   5. Free taxes preparation Enter pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan for your most recent year of service 5. Free taxes preparation   6. Free taxes preparation Enter your foreign earned income exclusion for your most recent year of service 6. Free taxes preparation   7. Free taxes preparation Add lines 1, 2, 3, 4, 5, and 6 7. Free taxes preparation   8. Free taxes preparation Enter the cost of incidental life insurance that is part of your annuity contract for your most recent year of service 8. Free taxes preparation   9. Free taxes preparation Enter compensation that was both: Earned during your most recent year of service, and Earned while your employer was not qualified to maintain a 403(b) plan 9. Free taxes preparation   10. Free taxes preparation Add lines 8 and 9 10. Free taxes preparation   11. Free taxes preparation Subtract line 10 from line 7. Free taxes preparation This is your includible compensation for your most recent year of service 11. Free taxes preparation   1Use estimated amounts if figuring includible compensation before the end of the year. Free taxes preparation  2Elective deferrals made to a designated Roth account are not excluded from your gross income and should not be included on this line. Free taxes preparation Worksheet C. Free taxes preparation Limit on Catch-Up Contributions Note. Free taxes preparation If you will be age 50 or older by the end of the year, use this worksheet to figure your limit on catch-up contributions. Free taxes preparation 1. Free taxes preparation Maximum catch-up contributions 1. Free taxes preparation $5,500 2. Free taxes preparation Enter your includible compensation for your most recent year of service 2. Free taxes preparation   3. Free taxes preparation Enter your elective deferrals 3. Free taxes preparation   4. Free taxes preparation Subtract line 3 from line 2 4. Free taxes preparation   5. Free taxes preparation Enter the lesser of line 1 or line 4. Free taxes preparation This is your limit on catch-up contributions 5. Free taxes preparation   Worksheet 1. Free taxes preparation Maximum Amount Contributable (MAC) Note. Free taxes preparation Use this worksheet to figure your MAC. Free taxes preparation Part I. Free taxes preparation Limit on Annual Additions     1. Free taxes preparation Enter your includible compensation for your most recent year of service 1. Free taxes preparation   2. Free taxes preparation Maximum1: For 2013, enter $51,000 For 2014, enter $52,000 2. Free taxes preparation   3. Free taxes preparation Enter the lesser of line 1 or line 2. Free taxes preparation This is your limit on annual additions 3. Free taxes preparation     Caution: If you had only nonelective contributions, skip Part II and enter the amount from line 3 on line 18. Free taxes preparation     Part II. Free taxes preparation Limit on Elective Deferrals     4. Free taxes preparation Maximum contribution: For 2013, enter $17,500 For 2014, enter $17,500 4. Free taxes preparation     Note. Free taxes preparation If you have at least 15 years of service with a qualifying organization, complete lines 5 through 17. Free taxes preparation If not, enter zero (-0-) on line 16 and go to line 17. Free taxes preparation     5. Free taxes preparation Amount per year of service 5. Free taxes preparation $ 5,000 6. Free taxes preparation Enter your years of service 6. Free taxes preparation   7. Free taxes preparation Multiply line 5 by line 6 7. Free taxes preparation   8. Free taxes preparation Enter the total of all elective deferrals made for you by the qualifying organization for prior years 8. Free taxes preparation   9. Free taxes preparation Subtract line 8 from line 7. Free taxes preparation If zero or less, enter zero (-0-) 9. Free taxes preparation   10. Free taxes preparation Maximum increase in limit for long service 10. Free taxes preparation $15,000 11. Free taxes preparation Enter the total of additional pre-tax elective deferrals made in prior years under the 15-year rule 11. Free taxes preparation   12. Free taxes preparation Enter the aggregate amount of all designated Roth contributions permitted for prior years under the 15-year rule 12. Free taxes preparation   13. Free taxes preparation Add line 11 and line 12 13. Free taxes preparation   14. Free taxes preparation Subtract line 13 from line 10 14. Free taxes preparation   15. Free taxes preparation Maximum additional contributions 15. Free taxes preparation $ 3,000 16. Free taxes preparation Enter the least of lines 9, 14, or 15. Free taxes preparation This is your increase in the limit for long service 16. Free taxes preparation   17. Free taxes preparation Add lines 4 and 16. Free taxes preparation This is your limit on elective deferrals 17. Free taxes preparation     Part III. Free taxes preparation Maximum Amount Contributable     18. Free taxes preparation If you had only nonelective contributions, enter the amount from line 3. Free taxes preparation This is your MAC. Free taxes preparation    If you had only elective deferrals, enter the lesser of lines 3 or 17. Free taxes preparation This is your MAC. Free taxes preparation    If you had both elective deferrals and nonelective contributions, enter the amount from line 3. Free taxes preparation This is your MAC. Free taxes preparation (Use the amount on line 17 to determine if you have excess elective deferrals as explained in chapter 7. Free taxes preparation ) 18. Free taxes preparation   1If you participate in a 403(b) plan and a qualified plan, you must combine contributions made to your 403(b) account with contributions to a qualified plan and simplified employee pension plans of all corporations, partnerships, and sole proprietorships in which you have more than 50% control. Free taxes preparation You must also combine the contributions made to all 403(b) accounts on your behalf by your employer. Free taxes preparation Prev  Up  Next   Home   More Online Publications