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Irs Form 1040

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Irs Form 1040

Irs form 1040 Publication 503 - Main Content Table of Contents Tests To Claim the CreditQualifying Person Test Earned Income Test Work-Related Expense Test Joint Return Test Provider Identification Test How To Figure the CreditFiguring Total Work-Related Expenses Earned Income Limit Dollar Limit Amount of Credit How To Claim the CreditTax credit not refundable. Irs form 1040 Employment Taxes for Household Employers How To Get Tax HelpLow Income Taxpayer Clinics Tests To Claim the Credit To be able to claim the credit for child and dependent care expenses, you must file Form 1040, Form 1040A, or Form 1040NR, not Form 1040EZ or Form 1040NR-EZ, and meet all the following tests. Irs form 1040 The care must be for one or more qualifying persons who are identified on Form 2441. Irs form 1040 (See Qualifying Person Test. Irs form 1040 ) You (and your spouse if filing jointly) must have earned income during the year. Irs form 1040 (However, see Rule for student-spouse or spouse not able to care for self under Earned Income Test, later. Irs form 1040 ) You must pay child and dependent care expenses so you (and your spouse if filing jointly) can work or look for work. Irs form 1040 (See Work-Related Expense Test, later. Irs form 1040 ) You must make payments for child and dependent care to someone you (and your spouse) cannot claim as a dependent. Irs form 1040 If you make payments to your child, he or she cannot be your dependent and must be age 19 or older by the end of the year. Irs form 1040 You cannot make payments to: Your spouse, or The parent of your qualifying person if your qualifying person is your child and under age 13. Irs form 1040 See Payments to Relatives or Dependents under Work-Related Expense Test, later. Irs form 1040 Your filing status may be single, head of household, or qualifying widow(er) with dependent child. Irs form 1040 If you are married, you must file a joint return, unless an exception applies to you. Irs form 1040 See Joint Return Test, later. Irs form 1040 You must identify the care provider on your tax return. Irs form 1040 (See Provider Identification Test, later. Irs form 1040 ) If you exclude or deduct dependent care benefits provided by a dependent care benefit plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $3,000 if one qualifying person was cared for or $6,000 if two or more qualifying persons were cared for). Irs form 1040 (If two or more qualifying persons were cared for, the amount you exclude or deduct will always be less than the dollar limit, since the total amount you can exclude or deduct is limited to $5,000. Irs form 1040 See Reduced Dollar Limit under How To Figure the Credit, later. Irs form 1040 ) These tests are presented in Figure A and are also explained in detail in this publication. Irs form 1040 Qualifying Person Test Your child and dependent care expenses must be for the care of one or more qualifying persons. Irs form 1040 A qualifying person is: Your qualifying child who is your dependent and who was under age 13 when the care was provided (but see Child of divorced or separated parents or parents living apart , later), Your spouse who was not physically or mentally able to care for himself or herself and lived with you for more than half the year, or A person who was not physically or mentally able to care for himself or herself, lived with you for more than half the year, and either: Was your dependent, or Would have been your dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Irs form 1040 Dependent defined. Irs form 1040   A dependent is a person, other than you or your spouse, for whom you can claim an exemption. Irs form 1040 To be your dependent, a person must be your qualifying child (or your qualifying relative). Irs form 1040 Qualifying child. Irs form 1040   To be your qualifying child, a child must live with you for more than half the year and meet other requirements. Irs form 1040 More information. Irs form 1040   For more information about who is a dependent or a qualifying child, see Publication 501. Irs form 1040 Physically or mentally not able to care for oneself. Irs form 1040   Persons who cannot dress, clean, or feed themselves because of physical or mental problems are considered not able to care for themselves. Irs form 1040 Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves. Irs form 1040 Person qualifying for part of year. Irs form 1040   You determine a person's qualifying status each day. Irs form 1040 For example, if the person for whom you pay child and dependent care expenses no longer qualifies on September 16, count only those expenses through September 15. Irs form 1040 Also see Yearly limit under Dollar Limit, later. Irs form 1040 Birth or death of otherwise qualifying person. Irs form 1040   In determining whether a person is a qualifying person, a person 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 person's home more than half the time he or she was alive in 2013. Irs form 1040 Taxpayer identification number. Irs form 1040   You must include on your return the name and taxpayer identification number (generally the social security number) of the qualifying person(s). Irs form 1040 If the correct information is not shown, the credit may be reduced or disallowed. Irs form 1040 Individual taxpayer identification number (ITIN) for aliens. Irs form 1040   If your qualifying person is a nonresident or resident alien who does not have and cannot get a social security number (SSN), use that person's ITIN. Irs form 1040 The ITIN is entered wherever an SSN is requested on a tax return. Irs form 1040 If the alien does not have an ITIN, he or she must apply for one. Irs form 1040 See Form W-7, Application for IRS Individual Taxpayer Identification Number, for details. Irs form 1040   An ITIN is for tax use only. Irs form 1040 It does not entitle the holder to social security benefits or change the holder's employment or immigration status under U. Irs form 1040 S. Irs form 1040 law. Irs form 1040 Adoption taxpayer identification number (ATIN). Irs form 1040   If your qualifying person is a child who was placed in your home for adoption and for whom you do not have an SSN, you must get an ATIN for the child. Irs form 1040 File Form W-7A, Application for Taxpayer Identification Number for Pending U. Irs form 1040 S. Irs form 1040 Adoptions. Irs form 1040 Child of divorced or separated parents or parents living apart. Irs form 1040   Even if you cannot claim your child as a dependent, he or she is treated as your qualifying person if: The child was under age 13 or was not physically or mentally able to care for himself or herself, The child received over half of his or her support during the calendar year from one or both parents who 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 the calendar year, The child was in the custody of one or both parents for more than half the year, and You were the child's custodial parent. Irs form 1040   The custodial parent is the parent with whom the child lived for the greater number of nights in 2013. Irs form 1040 If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. Irs form 1040 For details and an exception for a parent who works at night, see Publication 501. Irs form 1040   The noncustodial parent cannot treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents. Irs form 1040 Please click here for the text description of the image. Irs form 1040 Figure a. Irs form 1040 Can you claim the credit Earned Income Test To claim the credit, you (and your spouse if filing jointly) must have earned income during the year. Irs form 1040 Earned income. Irs form 1040   Earned income includes wages, salaries, tips, other taxable employee compensation, and net earnings from self-employment. Irs form 1040 A net loss from self-employment reduces earned income. Irs form 1040 Earned income also includes strike benefits and any disability pay you report as wages. Irs form 1040   Generally, only taxable compensation is included. Irs form 1040 However, you can elect to include nontaxable combat pay in earned income. Irs form 1040 If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. Irs form 1040 (In other words, if one of you makes the election, the other one can also make it but does not have to. Irs form 1040 ) Including this income will give you a larger credit only if your (or your spouse's) other earned income is less than the amount entered on line 3 of Form 2441. Irs form 1040 You should figure your credit both ways and make the election if it gives you a greater tax benefit. Irs form 1040    You can choose to include your nontaxable combat pay in earned income when figuring your credit for child and dependent care expenses, even if you choose not to include it in earned income for the earned income credit or the exclusion or deduction for dependent care benefits. Irs form 1040 Members of certain religious faiths opposed to social security. Irs form 1040   This section is for persons who are members of certain religious faiths that are opposed to participation in Social Security Act programs and have an IRS-approved form that exempts certain income from social security and Medicare taxes. Irs form 1040 These forms are: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, and Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits, for use by members of recognized religious groups. Irs form 1040   Each form is discussed here in terms of what is or is not earned income for purposes of the child and dependent care credit. Irs form 1040 For information on the use of these forms, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Irs form 1040 Form 4361. Irs form 1040   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee are earned income. Irs form 1040 This includes wages, salaries, tips, and other taxable employee compensation. Irs form 1040   However, amounts you received for ministerial duties, but not as an employee, do not count as earned income. Irs form 1040 Examples include fees for performing marriages and honoraria for delivering speeches. Irs form 1040   Any amount you received for work that is not related to your ministerial duties is earned income. Irs form 1040 Form 4029. Irs form 1040   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation are earned income. Irs form 1040   However, amounts you received as a self-employed individual do not count as earned income. Irs form 1040 What is not earned income?   Earned income does not include: Pensions and annuities, Social security and railroad retirement benefits, Workers' compensation, Interest and dividends, Unemployment compensation, Scholarships or fellowship grants, except for those reported on Form W-2 and paid to you for teaching or other services, Nontaxable workfare payments, Child support payments received, Income of a nonresident alien that is not effectively connected with a U. Irs form 1040 S. Irs form 1040 trade or business, or Any amount received for work while an inmate in a penal institution. Irs form 1040 Rule for student-spouse or spouse not able to care for self. Irs form 1040   Your spouse is treated as having earned income for any month that he or she is: A full-time student, or Physically or mentally not able to care for himself or herself. Irs form 1040 (Your spouse also must live with you for more than half the year. Irs form 1040 )   If you are filing a joint return, this rule also applies to you. Irs form 1040 You can be treated as having earned income for any month you are a full-time student or not able to care for yourself. Irs form 1040   Figure the earned income of the nonworking spouse, described under (1) or (2) above, as shown under Earned Income Limit under How To Figure the Credit, later. Irs form 1040   This rule applies to only one spouse for any one month. Irs form 1040 If, in the same month, both you and your spouse do not work and are either full-time students or not physically or mentally able to care for yourselves, only one of you can be treated as having earned income in that month. Irs form 1040 Full-time student. Irs form 1040    You are a full-time student if you are enrolled at a school for the number of hours or classes that the school considers full time. Irs form 1040 You must have been a full-time student for some part of each of 5 calendar months during the year. Irs form 1040 (The months need not be consecutive. Irs form 1040 ) School. Irs form 1040   The term “school” includes high schools, colleges, universities, and technical, trade, and mechanical schools. Irs form 1040 A school does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. Irs form 1040 Work-Related Expense Test Child and dependent care expenses must be work-related to qualify for the credit. Irs form 1040 Expenses are considered work-related only if both of the following are true. Irs form 1040 They allow you (and your spouse if filing jointly) to work or look for work. Irs form 1040 They are for a qualifying person's care. Irs form 1040 Working or Looking for Work To be work-related, your expenses must allow you to work or look for work. Irs form 1040 If you are married, generally both you and your spouse must work or look for work. Irs form 1040 One spouse is treated as working during any month he or she is a full-time student or is not physically or mentally able to care for himself or herself. Irs form 1040 Your work can be for others or in your own business or partnership. Irs form 1040 It can be either full time or part time. Irs form 1040 Work also includes actively looking for work. Irs form 1040 However, if you do not find a job and have no earned income for the year, you cannot take this credit. Irs form 1040 See Earned Income Test, earlier. Irs form 1040 An expense is not considered work-related merely because you had it while you were working. Irs form 1040 The purpose of the expense must be to allow you to work. Irs form 1040 Whether your expenses allow you to work or look for work depends on the facts. Irs form 1040 Example 1. Irs form 1040 The cost of a babysitter while you and your spouse go out to eat is not normally a work-related expense. Irs form 1040 Example 2. Irs form 1040 You work during the day. Irs form 1040 Your spouse works at night and sleeps during the day. Irs form 1040 You pay for care of your 5-year-old child during the hours when you are working and your spouse is sleeping. Irs form 1040 Your expenses are considered work-related. Irs form 1040 Volunteer work. Irs form 1040   For this purpose, you are not considered to be working if you do unpaid volunteer work or volunteer work for a nominal salary. Irs form 1040 Work for part of year. Irs form 1040   If you work or actively look for work during only part of the period covered by the expenses, then you must figure your expenses for each day. Irs form 1040 For example, if you work all year and pay care expenses of $250 a month ($3,000 for the year), all the expenses are work related. Irs form 1040 However, if you work or look for work for only 2 months and 15 days during the year and pay expenses of $250 a month, your work-related expenses are limited to $625 (2½ months × $250). Irs form 1040 Temporary absence from work. Irs form 1040   You do not have to figure your expenses for each day during a short, temporary absence from work, such as for vacation or a minor illness, if you have to pay for care anyway. Irs form 1040 Instead, you can figure your credit including the expenses you paid for the period of absence. Irs form 1040   An absence of 2 weeks or less is a short, temporary absence. Irs form 1040 An absence of more than 2 weeks may be considered a short, temporary absence, depending on the circumstances. Irs form 1040 Example. Irs form 1040 You pay a nanny to care for your 2-year-old son and 4-year-old daughter so you can work. Irs form 1040 You become ill and miss 4 months of work but receive sick pay. Irs form 1040 You continue to pay the nanny to care for the children while you are ill. Irs form 1040 Your absence is not a short, temporary absence, and your expenses are not considered work-related. Irs form 1040 Part-time work. Irs form 1040   If you work part-time, you generally must figure your expenses for each day. Irs form 1040 However, if you have to pay for care weekly, monthly, or in another way that includes both days worked and days not worked, you can figure your credit including the expenses you paid for days you did not work. Irs form 1040 Any day when you work at least 1 hour is a day of work. Irs form 1040 Example 1. Irs form 1040 You work 3 days a week. Irs form 1040 While you work, your 6-year-old child attends a dependent care center, which complies with all state and local regulations. Irs form 1040 You can pay the center $150 for any 3 days a week or $250 for 5 days a week. Irs form 1040 Your child attends the center 5 days a week. Irs form 1040 Your work-related expenses are limited to $150 a week. Irs form 1040 Example 2. Irs form 1040 The facts are the same as in Example 1 except the center does not offer a 3-day option. Irs form 1040 The entire $250 weekly fee may be a work-related expense. Irs form 1040 Care of a Qualifying Person To be work-related, your expenses must be to provide care for a qualifying person. Irs form 1040 You do not have to choose the least expensive way of providing the care. Irs form 1040 The cost of a paid care provider may be an expense for the care of a qualifying person even if another care provider is available at no cost. Irs form 1040 Expenses are for the care of a qualifying person only if their main purpose is the person's well-being and protection. Irs form 1040 Expenses for household services qualify if part of the services is for the care of qualifying persons. Irs form 1040 See Household Services, later. Irs form 1040 Expenses not for care. Irs form 1040   Expenses for care do not include amounts you pay for food, lodging, clothing, education, and entertainment. Irs form 1040 However, you can include small amounts paid for these items if they are incidental to and cannot be separated from the cost of caring for the qualifying person. Irs form 1040 Otherwise, see the discussion of Expenses partly work-related, later. Irs form 1040   Child support payments are not for care and do not qualify for the credit. Irs form 1040 Education. Irs form 1040   Expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are expenses for care. Irs form 1040   Expenses to attend kindergarten or a higher grade are not expenses for care. Irs form 1040 Do not use these expenses to figure your credit. Irs form 1040   However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be expenses for care. Irs form 1040   Summer school and tutoring programs are not for care. Irs form 1040 Example 1. Irs form 1040 You take your 3-year-old child to a nursery school that provides lunch and a few educational activities as part of its preschool childcare service. Irs form 1040 The lunch and educational activities are incidental to the childcare, and their cost cannot be separated from the cost of care. Irs form 1040 You can count the total cost when you figure the credit. Irs form 1040 Example 2. Irs form 1040 You place your 10-year-old child in a boarding school so you can work full time. Irs form 1040 Only the part of the boarding school expense that is for the care of your child is a work-related expense. Irs form 1040 You can count that part of the expense in figuring your credit if it can be separated from the cost of education. Irs form 1040 You cannot count any part of the amount you pay the school for your child's education. Irs form 1040 Care outside your home. Irs form 1040   You can count the cost of care provided outside your home if the care is for your dependent under age 13 or any other qualifying person who regularly spends at least 8 hours each day in your home. Irs form 1040 Dependent care center. Irs form 1040   You can count care provided outside your home by a dependent care center only if the center complies with all state and local regulations that apply to these centers. Irs form 1040   A dependent care center is a place that provides care for more than six persons (other than persons who live there) and receives a fee, payment, or grant for providing services for any of those persons, even if the center is not run for profit. Irs form 1040 Camp. Irs form 1040   The cost of sending your child to an overnight camp is not considered a work-related expense. Irs form 1040    The cost of sending your child to a day camp may be a work-related expense, even if the camp specializes in a particular activity, such as computers or soccer. Irs form 1040 Transportation. Irs form 1040   If a care provider takes a qualifying person to or from a place where care is provided, that transportation is for the care of the qualifying person. Irs form 1040 This includes transportation by bus, subway, taxi, or private car. Irs form 1040 However, transportation not provided by a care provider is not for the care of a qualifying person. Irs form 1040 Also, if you pay the transportation cost for the care provider to come to your home, that expense is not for care of a qualifying person. Irs form 1040 Fees and deposits. Irs form 1040   Fees you paid to an agency to get the services of a care provider, deposits you paid to an agency or preschool, application fees, and other indirect expenses are work-related expenses if you have to pay them to get care, even though they are not directly for care. Irs form 1040 However, a forfeited deposit is not for the care of a qualifying person if care is not provided. Irs form 1040 Example 1. Irs form 1040 You paid a fee to an agency to get the services of the nanny who cares for your 2-year-old daughter while you work. Irs form 1040 The fee you paid is a work-related expense. Irs form 1040 Example 2. Irs form 1040 You placed a deposit with a preschool to reserve a place for your 3-year-old child. Irs form 1040 You later sent your child to a different preschool and forfeited the deposit. Irs form 1040 The forfeited deposit is not for care and so is not a work-related expense. Irs form 1040 Household Services Expenses you pay for household services meet the work-related expense test if they are at least partly for the well-being and protection of a qualifying person. Irs form 1040 Definition. Irs form 1040   Household services are ordinary and usual services done in and around your home that are necessary to run your home. Irs form 1040 They include the services of a housekeeper, maid, or cook. Irs form 1040 However, they do not include the services of a chauffeur, bartender, or gardener. Irs form 1040 Housekeeper. Irs form 1040   In this publication, the term housekeeper refers to any household employee whose services include the care of a qualifying person. Irs form 1040 Expenses partly work-related. Irs form 1040   If part of an expense is work-related (for either household services or the care of a qualifying person) and part is for other purposes, you have to divide the expense. Irs form 1040 To figure your credit, count only the part that is work-related. Irs form 1040 However, you do not have to divide the expense if only a small part is for other purposes. Irs form 1040 Example. Irs form 1040 You pay a housekeeper to care for your 9-year-old and 15-year-old children so you can work. Irs form 1040 The housekeeper spends most of the time doing normal household work and spends 30 minutes a day driving you to and from work. Irs form 1040 You do not have to divide the expenses. Irs form 1040 You can treat the entire expense of the housekeeper as work-related because the time spent driving is minimal. Irs form 1040 Nor do you have to divide the expenses between the two children, even though the expenses are partly for the 15-year-old child who is not a qualifying person, because the expense is also partly for the care of your 9-year-old child, who is a qualifying person. Irs form 1040 However, the dollar limit (discussed later) is based on one qualifying person, not two. Irs form 1040 Meals and lodging provided for housekeeper. Irs form 1040   If you have expenses for meals that your housekeeper eats in your home because of his or her employment, count these as work-related expenses. Irs form 1040 If you have extra expenses for providing lodging in your home to the housekeeper, count these as work-related expenses also. Irs form 1040 Example. Irs form 1040 To provide lodging to the housekeeper, you move to an apartment with an extra bedroom. Irs form 1040 You can count the extra rent and utility expenses for the housekeeper's bedroom as work-related. Irs form 1040 However, if your housekeeper moves into an existing bedroom in your home, you can count only the extra utility expenses as work-related. Irs form 1040 Taxes paid on wages. Irs form 1040   The taxes you pay on wages for qualifying child and dependent care services are work-related expenses. Irs form 1040 For more information on a household employer's tax responsibilities, see Employment Taxes for Household Employers, later. Irs form 1040 Payments to Relatives or Dependents You can count work-related payments you make to relatives who are not your dependents, even if they live in your home. Irs form 1040 However, do not count any amounts you pay to: A dependent for whom you (or your spouse if filing jointly) can claim an exemption, Your child who was under age 19 at the end of the year, even if he or she is not your dependent, A person who was your spouse any time during the year, or The parent of your qualifying person if your qualifying person is your child and under age 13. Irs form 1040 Joint Return Test Generally, married couples must file a joint return to take the credit. Irs form 1040 However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. Irs form 1040 Legally separated. Irs form 1040   You are not considered married if you are legally separated from your spouse under a decree of divorce or separate maintenance. Irs form 1040 You may be eligible to take the credit on your return using head of household filing status. Irs form 1040 Married and living apart. Irs form 1040   You are not considered married and are eligible to take the credit if all the following apply. Irs form 1040 You file a return apart from your spouse. Irs form 1040 Your home is the home of a qualifying person for more than half the year. Irs form 1040 You pay more than half the cost of keeping up your home for the year. Irs form 1040 Your spouse does not live in your home for the last 6 months of the year. Irs form 1040 Costs of keeping up a home. Irs form 1040   The costs of keeping up a home normally include property taxes, mortgage interest, rent, utility charges, home repairs, insurance on the home, and food eaten at home. Irs form 1040   The costs of keeping up a home do not include payments for clothing, education, medical treatment, vacations, life insurance, transportation, or mortgage principal. Irs form 1040   They also do not include the purchase, permanent improvement, or replacement of property. Irs form 1040 For example, you cannot include the cost of replacing a water heater. Irs form 1040 However, you can include the cost of repairing a water heater. Irs form 1040 Death of spouse. Irs form 1040   If your spouse died during the year and you do not remarry before the end of the year, you generally must file a joint return to take the credit. Irs form 1040 If you do remarry before the end of the year, the credit can be claimed on your deceased spouse's own return. Irs form 1040 Provider Identification Test You must identify all persons or organizations that provide care for your child or dependent. Irs form 1040 Use Form 2441, Part I, to show the information. Irs form 1040 If you do not have any care providers and you are filing Form 2441 only to report taxable income in Part III, enter “none” in line 1, column (a). Irs form 1040 Information needed. Irs form 1040   To identify the care provider, you must give the provider's: Name, Address, and Taxpayer identification number. Irs form 1040    If the care provider is an individual, the taxpayer identification number is his or her social security number or individual taxpayer identification number. Irs form 1040 If the care provider is an organization, then it is the employer identification number (EIN). Irs form 1040   You do not have to show the taxpayer identification number if the care provider is a tax-exempt organization (such as a church or school). Irs form 1040 In this case, enter “Tax-Exempt” in the space where Form 2441 asks for the number. Irs form 1040   If you cannot provide all of the information or the information is incorrect, you must be able to show that you used due diligence (discussed later) in trying to furnish the necessary information. Irs form 1040 Getting the information. Irs form 1040    You can use Form W-10, Dependent Care Provider's Identification and Certification, to request the required information from the care provider. Irs form 1040 If you do not use Form W-10, you can get the information from one of the other sources listed in the instructions for Form W-10, including: A copy of the provider's social security card, A copy of the provider's completed Form W-4, Employee's Withholding Allowance Certificate, if he or she is your household employee, A copy of the statement furnished by your employer if the provider is your employer's dependent care plan, or A letter or invoice from the provider if it shows the necessary information. Irs form 1040    You should keep this information with your tax records. Irs form 1040 Do not send Form W-10 (or other document containing this information) to the Internal Revenue Service. Irs form 1040 Due diligence. Irs form 1040   If the care provider information you give is incorrect or incomplete, your credit may not be allowed. Irs form 1040 However, if you can show that you used due diligence in trying to supply the information, you can still claim the credit. Irs form 1040   You can show due diligence by getting and keeping the provider's completed Form W-10 or one of the other sources of information just listed. Irs form 1040 Care providers can be penalized if they do not provide this information to you or if they provide incorrect information. Irs form 1040 Provider refusal. Irs form 1040    If the provider refuses to give you the identifying information, you should report on Form 2441 whatever information you have (such as the name and address). Irs form 1040 Enter “See Attached Statement” in the columns calling for the information you do not have. Irs form 1040 Then attach a statement explaining that you requested the information from the care provider, but the provider did not give you the information. Irs form 1040 Be sure to write your name and social security number on this statement. Irs form 1040 The statement will show that you used due diligence in trying to furnish the necessary information. Irs form 1040 U. Irs form 1040 S. Irs form 1040 citizens and resident aliens living abroad. Irs form 1040   If you are living abroad, your care provider may not have, and may not be required to get, a U. Irs form 1040 S. Irs form 1040 taxpayer identification number (for example, an SSN or an EIN). Irs form 1040 If so, enter “LAFCP” (Living Abroad Foreign Care Provider) in the space for the care provider's taxpayer identification number. Irs form 1040 How To Figure the Credit Your credit is a percentage of your work-related expenses. Irs form 1040 Your expenses are subject to the earned income limit and the dollar limit. Irs form 1040 The percentage is based on your adjusted gross income. Irs form 1040 Figuring Total Work-Related Expenses To figure the credit for 2013 work-related expenses, count only those you paid by December 31, 2013. Irs form 1040 Expenses prepaid in an earlier year. Irs form 1040   If you pay for services before they are provided, you can count the prepaid expenses only in the year the care is received. Irs form 1040 Claim the expenses for the later year as if they were actually paid in that later year. Irs form 1040 Expenses not paid until the following year. Irs form 1040   Do not count 2012 expenses that you paid in 2013 as work-related expenses for 2013. Irs form 1040 You may be able to claim an additional credit for them on your 2013 return, but you must figure it separately. Irs form 1040 See Payments for prior year's expenses under Amount of Credit, later. Irs form 1040 If you had expenses in 2013 that you did not pay until 2014, you cannot count them when figuring your 2013 credit. Irs form 1040 You may be able to claim a credit for them on your 2014 return. Irs form 1040 Expenses reimbursed. Irs form 1040   If a state social services agency pays you a nontaxable amount to reimburse you for some of your child and dependent care expenses, you cannot count the expenses that are reimbursed as work-related expenses. Irs form 1040 Example. Irs form 1040 You paid work-related expenses of $3,000. Irs form 1040 You are reimbursed $2,000 by a state social services agency. Irs form 1040 You can use only $1,000 to figure your credit. Irs form 1040 Medical expenses. Irs form 1040   Some expenses for the care of qualifying persons who are not able to care for themselves may qualify as work-related expenses and also as medical expenses. Irs form 1040 You can use them either way, but you cannot use the same expenses to claim both a credit and a medical expense deduction. Irs form 1040   If you use these expenses to figure the credit and they are more than the earned income limit or the dollar limit, discussed later, you can add the excess to your medical expenses. Irs form 1040 However, if you use your total expenses to figure your medical expense deduction, you cannot use any part of them to figure your credit. Irs form 1040 For information on medical expenses, see Publication 502, Medical and Dental Expenses. Irs form 1040    Amounts excluded from your income under your employer's dependent care benefits plan cannot be used to claim a medical expense deduction. Irs form 1040 Dependent Care Benefits If you receive dependent care benefits, your dollar limit for purposes of the credit may be reduced. Irs form 1040 See Reduced Dollar Limit, later. Irs form 1040 But, even if you cannot take the credit, you may be able to take an exclusion or deduction for the dependent care benefits. Irs form 1040 Dependent care benefits. Irs form 1040    Dependent care benefits include: Amounts your employer paid directly to either you or your care provider for the care of your qualifying person while you work, The fair market value of care in a daycare facility provided or sponsored by your employer, and Pre-tax contributions you made under a dependent care flexible spending arrangement. Irs form 1040 Your salary may have been reduced to pay for these benefits. Irs form 1040 If you received benefits as an employee, they should be shown in box 10 of your Form W-2, Wage and Tax Statement. Irs form 1040 See Statement for employee, later. Irs form 1040 Benefits you received as a partner should be shown in box 13 of your Schedule K-1 (Form 1065) with code O. Irs form 1040   Enter the amount of these benefits on Form 2441, Part III, line 12. Irs form 1040 Exclusion or deduction. Irs form 1040   If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. Irs form 1040 Your employer can tell you whether your benefit plan qualifies. Irs form 1040 To claim the exclusion, you must complete Part III of Form 2441. Irs form 1040 You cannot use Form 1040EZ. Irs form 1040   If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. Irs form 1040 Therefore, you would not get an exclusion from wages. Irs form 1040 Instead, you would get a deduction on Form 1040, Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. Irs form 1040 To claim the deduction, you must use Form 2441. Irs form 1040   The amount you can exclude or deduct is limited to the smallest of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). Irs form 1040   The definition of earned income for the exclusion or deduction is the same as the definition used when figuring the credit except that earned income for the exclusion or deduction does not include any dependent care benefits you receive. Irs form 1040    You can choose to include your nontaxable combat pay in earned income when figuring your exclusion or deduction, even if you choose not to include it in earned income for the earned income credit or the credit for child and dependent care expenses. Irs form 1040 Statement for employee. Irs form 1040   Your employer must give you a Form W-2 (or similar statement), showing in box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. Irs form 1040 Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in box 1. Irs form 1040 Effect of exclusion on credit. Irs form 1040   If you exclude dependent care benefits from your income, the amount of the excluded benefits: Is not included in your work-related expenses, and Reduces the dollar limit, discussed later. Irs form 1040 Earned Income Limit The amount of work-related expenses you use to figure your credit cannot be more than: Your earned income for the year, if you are single at the end of the year, or The smaller of your or your spouse's earned income for the year if you are married at the end of the year. Irs form 1040 Earned income for the purpose of figuring the credit is defined under Earned Income Test, earlier. Irs form 1040 For purposes of item (2), use your spouse's earned income for the entire year, even if you were married for only part of the year. Irs form 1040 Example. Irs form 1040 You remarried on December 3. Irs form 1040 Your earned income for the year was $18,000. Irs form 1040 Your new spouse's earned income for the year was $2,000. Irs form 1040 You paid work-related expenses of $3,000 for the care of your 5-year-old child and qualified to claim the credit. Irs form 1040 The amount of expenses you use to figure your credit cannot be more than $2,000 (the smaller of your earned income or that of your spouse). Irs form 1040 Separated spouse. Irs form 1040   If you are legally separated or married and living apart from your spouse (as described under Joint Return Test, earlier), you are not considered married for purposes of the earned income limit. Irs form 1040 Use only your income in figuring the earned income limit. Irs form 1040 Surviving spouse. Irs form 1040   If your spouse died during the year and you file a joint return as a surviving spouse, you may, but are not required to, take into account the earned income of your spouse who died during the year. Irs form 1040 Community property laws. Irs form 1040   Disregard community property laws when you figure earned income for this credit. Irs form 1040 Self-employment earnings. Irs form 1040   If you are self-employed, include your net earnings in earned income. Irs form 1040 For purposes of the child and dependent care credit, net earnings from self-employment generally means the amount from Schedule SE (either Section A or Section B), line 3, minus any deduction for self-employment tax on Form 1040 or Form 1040NR, line 27. Irs form 1040 Include your self-employment earnings in earned income, even if they are less than $400 and you did not file Schedule SE. Irs form 1040 Clergy or church employee. Irs form 1040   If you are a member of the clergy or a church employee, see the Instructions for Form 2441 for details. Irs form 1040 Statutory employee. Irs form 1040   If you filed Schedule C (Form 1040) or C-EZ (Form 1040) to report income as a statutory employee, also include as earned income the amount from line 1 of that Schedule C (Form 1040) or C-EZ (Form 1040). Irs form 1040 Net loss. Irs form 1040   You must reduce your earned income by any net loss from self-employment. Irs form 1040 Optional method if earnings are low or a net loss. Irs form 1040   If your net earnings from self-employment are low or you have a net loss, you may be able to figure your net earnings by using an optional method instead of the regular method. Irs form 1040 Get Publication 334, Tax Guide for Small Business, for details. Irs form 1040 If you use an optional method to figure net earnings for self-employment tax purposes, include those net earnings in your earned income for this credit. Irs form 1040 In this case, subtract any deduction you claimed on Form 1040 or Form 1040NR, line 27, from the total of the amounts on Schedule SE, Section B, lines 3 and 4b, to figure your net earnings. Irs form 1040 You or your spouse is a student or not able to care for self. Irs form 1040   Your spouse who is either a full-time student or not able to care for himself or herself is treated as having earned income. Irs form 1040 His or her earned income for each month is considered to be at least $250 if there is one qualifying person in your home, or at least $500 if there are two or more. Irs form 1040 Spouse works. Irs form 1040   If your spouse works during that month, use the higher of $250 (or $500) or his or her actual earned income for that month. Irs form 1040 Spouse qualifies for part of month. Irs form 1040   If your spouse is a full-time student or not able to care for himself or herself for only part of a month, the full $250 (or $500) still applies for that month. Irs form 1040 You are a student or not able to care for self. Irs form 1040   These rules also apply if you are a student or not able to care for yourself and are filing a joint return. Irs form 1040 For each month or part of a month you are a student or not able to care for yourself, your earned income is considered to be at least $250 (or $500). Irs form 1040 If you also work during that month, use the higher of $250 (or $500) or your actual earned income for that month. Irs form 1040 Both spouses qualify. Irs form 1040   If, in the same month, both you and your spouse are either full-time students or not able to care for yourselves, only one spouse can be considered to have this earned income of $250 (or $500) for that month. Irs form 1040 Example. Irs form 1040 Jim works and keeps up a home for himself and his wife Sharon. Irs form 1040 Because of an accident, Sharon is not able to care for herself for 11 months during the tax year. Irs form 1040 During the 11 months, Jim pays $3,300 of work-related expenses for Sharon's care. Irs form 1040 These expenses also qualify as medical expenses. Irs form 1040 Their adjusted gross income is $29,000 and the entire amount is Jim's earned income. Irs form 1040 Jim and Sharon's earned income limit is the smallest of the following amounts. Irs form 1040   Jim and Sharon's Earned Income Limit   1) Work-related expenses Jim paid $   3,300   2) Jim's earned income $   29,000   3) Income considered earned by Sharon (11 × $250) $    2,750   Jim and Sharon can use $2,750 to figure the credit and treat the balance of $550 ($3,300 − $2,750) as a medical expense. Irs form 1040 However, if they use the $3,300 first as a medical expense, they cannot use any part of that amount to figure the credit. Irs form 1040 Dollar Limit There is a dollar limit on the amount of your work-related expenses you can use to figure the credit. Irs form 1040 This limit is $3,000 for one qualifying person, or $6,000 for two or more qualifying persons. Irs form 1040 If you paid work-related expenses for the care of two or more qualifying persons, the applicable dollar limit is $6,000. Irs form 1040 This limit does not need to be divided equally among them. Irs form 1040 For example, if your work-related expenses for the care of one qualifying person are $3,200 and your work-related expenses for another qualifying person are $2,800, you can use the total, $6,000, when figuring the credit. Irs form 1040 Yearly limit. Irs form 1040   The dollar limit is a yearly limit. Irs form 1040 The amount of the dollar limit remains the same no matter how long, during the year, you have a qualifying person in your household. Irs form 1040 Use the $3,000 limit if you paid work-related expenses for the care of one qualifying person at any time during the year. Irs form 1040 Use $6,000 if you paid work-related expenses for the care of more than one qualifying person at any time during the year. Irs form 1040 Example 1. Irs form 1040 You pay $500 a month for after-school care for your son. Irs form 1040 He turned 13 on May 1 and is no longer a qualifying person. Irs form 1040 You can use the $2,000 of expenses for his care January through April to figure your credit because it is not more than the $3,000 yearly limit. Irs form 1040 Example 2. Irs form 1040 In July of this year, to permit your spouse to begin a new job, you enrolled your 3-year-old daughter in a nursery school that provides preschool childcare. Irs form 1040 You paid $300 per month for the childcare. Irs form 1040 You can use the full $1,800 you paid ($300 × 6 months) as qualified expenses because it is not more than the $3,000 yearly limit. Irs form 1040 Reduced Dollar Limit If you received dependent care benefits that you exclude or deduct from your income, you must subtract that amount from the dollar limit that applies to you. Irs form 1040 Your reduced dollar limit is figured on Form 2441, Part III. Irs form 1040 See Dependent Care Benefits, earlier, for information on excluding or deducting these benefits. Irs form 1040 Example 1. Irs form 1040 George is a widower with one child and earns $24,000 a year. Irs form 1040 He pays work-related expenses of $2,900 for the care of his 4-year-old child and qualifies to claim the credit for child and dependent care expenses. Irs form 1040 His employer pays an additional $1,000 under a qualified dependent care benefit plan. Irs form 1040 This $1,000 is excluded from George's income. Irs form 1040 Although the dollar limit for his work-related expenses is $3,000 (one qualifying person), George figures his credit on only $2,000 of the $2,900 work-related expenses he paid. Irs form 1040 This is because his dollar limit is reduced as shown next. Irs form 1040   George's Reduced Dollar Limit 1) Maximum allowable expenses for one qualifying person $3,000 2) Minus: Dependent care benefits George excludes from income −1,000 3) Reduced dollar limit on expenses George can use for the credit $2,000 Example 2. Irs form 1040 Randall is married and both he and his wife are employed. Irs form 1040 Each has earned income in excess of $6,000. Irs form 1040 They have two children, Anne and Andy, ages 2 and 4, who attend a daycare facility licensed and regulated by the state. Irs form 1040 Randall's work-related expenses are $6,000 for the year. Irs form 1040 Randall's employer has a dependent care assistance program as part of its cafeteria plan, which allows employees to make pre-tax contributions to a dependent care flexible spending arrangement. Irs form 1040 Randall has elected to take the maximum $5,000 exclusion from his salary to cover dependent care expenses through this program. Irs form 1040 Although the dollar limit for his work-related expenses is $6,000 (two or more qualifying persons), Randall figures his credit on only $1,000 of the $6,000 work-related expense paid. Irs form 1040 This is because his dollar limit is reduced as shown next. Irs form 1040   Randall's Reduced Dollar Limit 1) Maximum allowable expenses for two qualifying persons $6,000 2) Minus: Dependent care benefits selected from employer's cafeteria plan and  excluded from Randall's income −5,000 3) Reduced dollar limit on work-related expenses Randall can use for the credit $1,000 Amount of Credit To determine the amount of your credit, multiply your work-related expenses (after applying the earned income and dollar limits) by a percentage. Irs form 1040 This percentage depends on your adjusted gross income shown on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37. Irs form 1040 The following table shows the percentage to use based on adjusted gross income. Irs form 1040   IF your adjusted gross income is: THEN the       Over:       But not over:   percentage is:       $0   —   $15,000   35%       15,000   —   17,000   34%       17,000   —   19,000   33%       19,000   —   21,000   32%       21,000   —   23,000   31%       23,000   —   25,000   30%       25,000   —   27,000   29%       27,000   —   29,000   28%       29,000   —   31,000   27%       31,000   —   33,000   26%       33,000   —   35,000   25%       35,000   —   37,000   24%       37,000   —   39,000   23%       39,000   —   41,000   22%       41,000   —   43,000   21%       43,000   —   No limit   20%   To qualify for the credit, you must have one or more qualifying persons. Irs form 1040 You should show the expenses for each person on Form 2441, line 2, column (c). Irs form 1040 However, it is possible a qualifying person could have no expenses and a second qualifying person could have expenses exceeding $3,000. Irs form 1040 You should list -0- for the one person and the actual amount for the second person. Irs form 1040 The $6,000 limit that applies to two or more qualifying persons would still be used to compute your credit unless you already excluded or deducted, in Part III of Form 2441, certain dependent care benefits paid to you (or on your behalf) by your employer. Irs form 1040 Example. Irs form 1040 Roger and Megan Paris have two qualifying children. Irs form 1040 They received $1,000 of dependent care benefits from Megan's employer during 2013, but they incurred a total of $19,500 of child and dependent care expenses. Irs form 1040 They complete Part III of Form 2441 to exclude the $1,000 from their taxable income (offsetting $1,000 of their expenses). Irs form 1040 Roger and Megan continue to line 27 to figure their credit using the remaining $18,500 of expenses. Irs form 1040 Line 30 tells them to complete line 2 without including any dependent care benefits. Irs form 1040 They complete line 2 of Form 2441, listing both Susan and James, as shown in the Line 2 example above. Irs form 1040 Line 2 Example (a) Qualifying person's name (b) Qualifying person's social security number (c) Qualified expenses you incurred and paid in 2013 for the person listed in column (a) First Last Susan Paris 123-00-6789 -0- James Paris 987-00-4321 18,500. Irs form 1040 00 All of Susan's expenses were covered by the $1,000 of employer-provided dependent care benefits. Irs form 1040 However, their son James has special needs and they paid $18,500 for his care. Irs form 1040 Line 3 imposes a $5,000 limit for two or more children ($6,000 limit, minus $1,000 already excluded from income = $5,000) and Roger and Megan continue to complete the form. Irs form 1040 Even though line 2 indicates one of the Paris children did not have any dependent care expenses, it does not change the fact that they had two qualifying children for the purposes of Form 2441. Irs form 1040 Payments for prior year's expenses. Irs form 1040   If you had work-related expenses in 2012 that you paid in 2013, you may be able to increase the credit on your 2013 return. Irs form 1040 Attach a statement to your form showing how you figured the additional amount from 2012. Irs form 1040 Then enter “CPYE” (Credit for Prior Year Expenses) and the amount of the credit on the dotted line next to line 9 on Form 2441. Irs form 1040 Also enter the name and taxpayer identification number of the person for whom you paid the prior year's expenses. Irs form 1040 Then add this credit to the amount on line 9, and replace the amount on line 9 with the total. Irs form 1040 See Worksheet A. Irs form 1040 Example. Irs form 1040 In 2012, Sam and Kate had childcare expenses of $2,600 for their 12-year-old child. Irs form 1040 Of the $2,600, they paid $2,000 in 2012 and $600 in 2013. Irs form 1040 Their adjusted gross income for 2012 was $30,000. Irs form 1040 Sam's earned income of $14,000 was less than Kate's earned income. Irs form 1040 A credit for their 2012 expenses paid in 2013 is not allowed in 2012. Irs form 1040 It is allowed for the 2013 tax year, but they must use their adjusted gross income for 2012 to compute the amount. Irs form 1040 The filled-in Worksheet A they used to figure this credit is shown later. Irs form 1040 Sam and Kate add the $162 from line 13 of this worksheet to their 2013 credit and enter the total on their Form 2441, line 9. Irs form 1040 They enter “CPYE $162” and their child's name and SSN in the space to the left of line 9. Irs form 1040 Worksheet A. Irs form 1040 Worksheet for 2012 Expenses Paid in 2013 Use this worksheet to figure the credit you may claim for 2012 expenses paid in 2013. Irs form 1040 1. Irs form 1040   Enter your 2012 qualified expenses paid in 2012 1. Irs form 1040     2. Irs form 1040   Enter your 2012 qualified expenses paid in 2013 2. Irs form 1040     3. Irs form 1040   Add the amounts on lines 1 and 2 3. Irs form 1040     4. Irs form 1040   Enter $3,000 if care was for one qualifying person ($6,000 if for two or more) 4. Irs form 1040     5. Irs form 1040   Enter any dependent care benefits received for 2012 and excluded from your income (from your 2012 Form 2441, line 25) 5. Irs form 1040     6. Irs form 1040   Subtract the amount on line 5 from the amount on line 4 and enter the result 6. Irs form 1040     7. Irs form 1040   Compare your earned income for 2012 and your spouse's earned income for 2012 and enter the smaller amount 7. Irs form 1040     8. Irs form 1040   Compare the amounts on lines 3, 6, and 7 and enter the smallest amount 8. Irs form 1040     9. Irs form 1040   Enter the amount on which you figured the credit for 2012 (from your 2012 Form 2441, line 6) 9. Irs form 1040     10. Irs form 1040   Subtract the amount on line 9 from the amount on line 8 and enter the result. Irs form 1040 If zero or less, stop here. Irs form 1040 You cannot increase your 2013 credit by any previous year's expenses 10. Irs form 1040     11. Irs form 1040   Enter your 2012 adjusted gross income (from your 2012 Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37) 11. Irs form 1040     12. Irs form 1040   Find your 2012 adjusted gross income in the table below and enter the corresponding decimal amount here 12. Irs form 1040             IF your 2012 adjusted gross income is:   THEN the decimal                 Over:   But not over:     amount is:                 $0 — $15,000     . Irs form 1040 35                 15,000 — 17,000     . Irs form 1040 34                 17,000 — 19,000     . Irs form 1040 33                 19,000 — 21,000     . Irs form 1040 32                 21,000 — 23,000     . Irs form 1040 31                 23,000 — 25,000     . Irs form 1040 30                 25,000 — 27,000     . Irs form 1040 29                 27,000 — 29,000     . Irs form 1040 28                 29,000 — 31,000     . Irs form 1040 27                 31,000 — 33,000     . Irs form 1040 26                 33,000 — 35,000     . Irs form 1040 25                 35,000 — 37,000     . Irs form 1040 24                 37,000 — 39,000     . Irs form 1040 23                 39,000 — 41,000     . Irs form 1040 22                 41,000 — 43,000     . Irs form 1040 21                 43,000 — No limit     . Irs form 1040 20           13. Irs form 1040   Multiply line 10 by line 12. Irs form 1040 Add this amount to your 2013 credit and enter the total on your 2013 Form 2441, line 9. Irs form 1040 Enter the following on the dotted line next to line 9 of Form 2441: “CPYE” The amount of this credit for a prior year's expenses           Also, attach a statement to your tax return showing the name and taxpayer identification number of the person for whom you paid the prior year's expenses and how you figured the credit 13. Irs form 1040       Worksheet A. Irs form 1040 Filled-in Worksheet for 2012 Expenses Paid in 2013 Use this worksheet to figure the credit you may claim for 2012 expenses paid in 2013. Irs form 1040 1. Irs form 1040   Enter your 2012 qualified expenses paid in 2012 1. Irs form 1040   $2,000 2. Irs form 1040   Enter your 2012 qualified expenses paid in 2013 2. Irs form 1040   600 3. Irs form 1040   Add the amounts on lines 1 and 2 3. Irs form 1040   2,600 4. Irs form 1040   Enter $3,000 if care was for one qualifying person ($6,000 if for two or more) 4. Irs form 1040   3,000 5. Irs form 1040   Enter any dependent care benefits received for 2012 and excluded from your income (from your 2012 Form 2441, line 25) 5. Irs form 1040   0 6. Irs form 1040   Subtract the amount on line 5 from the amount on line 4 and enter the result 6. Irs form 1040   3,000 7. Irs form 1040   Compare your earned income for 2012 and your spouse's earned income for 2012 and enter the smaller amount 7. Irs form 1040   14,000 8. Irs form 1040   Compare the amounts on lines 3, 6, and 7 and enter the smallest amount 8. Irs form 1040   2,600 9. Irs form 1040   Enter the amount on which you figured the credit for 2012 (from your 2012 Form 2441, line 6) 9. Irs form 1040   2,000 10. Irs form 1040   Subtract the amount on line 9 from the amount on line 8 and enter the result. Irs form 1040 If zero or less, stop here. Irs form 1040 You cannot increase your 2013 credit by any previous year's expenses 10. Irs form 1040   600 11. Irs form 1040   Enter your 2012 adjusted gross income (from your 2012 Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37) 11. Irs form 1040   30,000 12. Irs form 1040   Find your 2012 adjusted gross income in the table below and enter the corresponding decimal amount here 12. Irs form 1040   . Irs form 1040 27         IF your 2012 adjusted gross income is:   THEN the decimal                 Over   But not over     amount is:                 $0 — $15,000     . Irs form 1040 35                 15,000 — 17,000     . Irs form 1040 34                 17,000 — 19,000     . Irs form 1040 33                 19,000 — 21,000     . Irs form 1040 32                 21,000 — 23,000     . Irs form 1040 31                 23,000 — 25,000     . Irs form 1040 30                 25,000 — 27,000     . Irs form 1040 29                 27,000 — 29,000     . Irs form 1040 28                 29,000 — 31,000     . Irs form 1040 27                 31,000 — 33,000     . Irs form 1040 26                 33,000 — 35,000     . Irs form 1040 25                 35,000 — 37,000     . Irs form 1040 24                 37,000 — 39,000     . Irs form 1040 23                 39,000 — 41,000     . Irs form 1040 22                 41,000 — 43,000     . Irs form 1040 21                 43,000 — No limit     . Irs form 1040 20           13. Irs form 1040   Multiply line 10 by line 12. Irs form 1040 Add this amount to your 2013 credit and enter the total on your 2013 Form 2441, line 9. Irs form 1040 Enter the following on the dotted line next to line 9 of Form 2441: “CPYE” The amount of this credit for a prior year's expenses             Also, attach a statement to your tax return showing the name and taxpayer identification number of the person for whom you paid the prior year's expenses and how you figured the credit 13. Irs form 1040   $162   How To Claim the Credit To claim the credit, you can file Form 1040, Form 1040A, or Form 1040NR. Irs form 1040 You cannot claim the credit on Form 1040EZ or Form 1040NR-EZ. Irs form 1040 Form 1040, Form 1040A, or Form 1040NR. Irs form 1040    You must complete Form 2441 and attach it to your Form 1040, Form 1040A, or Form 1040NR. Irs form 1040 Enter the credit on your Form 1040, line 48; Form 1040A, line 29; or Form 1040NR, line 46. Irs form 1040 Limit on credit. Irs form 1040    The amount of credit you can claim is limited to your tax. Irs form 1040 For more information, see the Instructions for Form 2441. Irs form 1040 Tax credit not refundable. Irs form 1040   You cannot get a refund for any part of the credit that is more than this limit. Irs form 1040 Recordkeeping. Irs form 1040 You should keep records of your work-related expenses. Irs form 1040 Also, if your dependent or spouse is not able to care for himself or herself, your records should show both the nature and length of the disability. Irs form 1040 Other records you should keep to support your claim for the credit are described under Provider Identification Test, earlier. Irs form 1040 Employment Taxes for Household Employers If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer. Irs form 1040 If you are a household employer, you will need an employer identification number (EIN) and you may have to pay employment taxes. Irs form 1040 If the individuals who work in your home are self-employed, you are not liable for any of the taxes discussed in this section. Irs form 1040 Self-employed persons who are in business for themselves are not household employees. Irs form 1040 Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. Irs form 1040 If you use a placement agency that exercises control over what work is done and how it will be done by a babysitter or companion who works in your home, the worker is not your employee. Irs form 1040 This control could include providing rules of conduct and appearance and requiring regular reports. Irs form 1040 In this case, you do not have to pay employment taxes. Irs form 1040 But, if an agency merely gives you a list of sitters and you hire one from that list, and pay the sitter directly, the sitter may be your employee. Irs form 1040 If you have a household employee, you may be subject to: Social security and Medicare taxes, Federal unemployment tax, and Federal income tax withholding. Irs form 1040 Social security and Medicare taxes are generally withheld from the employee's pay and matched by the employer. Irs form 1040 Federal unemployment (FUTA) tax is paid by the employer only and provides for payments of unemployment compensation to workers who have lost their jobs. Irs form 1040 Federal income tax is withheld from the employee's total pay if the employee asks you to do so and you agree. Irs form 1040 For more information on a household employer's tax responsibilities, see Publication 926 and Schedule H (Form 1040) and its instructions. Irs form 1040 State employment tax. Irs form 1040   You may also have to pay state unemployment tax. Irs form 1040 Contact your state unemployment tax office for information. Irs form 1040 You should also find out whether you need to pay or collect other state employment taxes or carry worker's compensation insurance. Irs form 1040 For a list of state unemployment tax agencies, visit the U. Irs form 1040 S. Irs form 1040 Department of Labor's website. Irs form 1040 To find that website, use the link in Publication 926 or search online. Irs form 1040 How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Irs form 1040 Free help with your tax return. Irs form 1040   You can get free help preparing your return nationwide from IRS-certified volunteers. Irs form 1040 The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Irs form 1040 The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Irs form 1040 Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Irs form 1040 In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Irs form 1040 To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Irs form 1040 gov, download the IRS2Go app, or call 1-800-906-9887. Irs form 1040   As part of the TCE program, AARP offers the Tax-Aide counseling program. Irs form 1040 To find the nearest AARP Tax-Aide site, visit AARP's website at www. Irs form 1040 aarp. Irs form 1040 org/money/taxaide or call 1-888-227-7669. Irs form 1040 For more information on these programs, go to IRS. Irs form 1040 gov and enter “VITA” in the search box. Irs form 1040 Internet. Irs form 1040    IRS. Irs form 1040 gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Irs form 1040 Download the free IRS2Go app from the iTunes app store or from Google Play. Irs form 1040 Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Irs form 1040 Check the status of your 2013 refund with the Where's My Refund? application on IRS. Irs form 1040 gov or download the IRS2Go app and select the Refund Status option. Irs form 1040 The IRS issues more than 9 out of 10 refunds in less than 21 days. Irs form 1040 Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Irs form 1040 You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Irs form 1040 The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Irs form 1040 Use the Interactive Tax Assistant (ITA) to research your tax questions. Irs form 1040 No need to wait on the phone or stand in line. Irs form 1040 The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Irs form 1040 When you reach the response screen, you can print the entire interview and the final response for your records. Irs form 1040 New subject areas are added on a regular basis. Irs form 1040  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Irs form 1040 gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Irs form 1040 You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Irs form 1040 The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Irs form 1040 When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Irs form 1040 Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Irs form 1040 You can also ask the IRS to mail a return or an account transcript to you. Irs form 1040 Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Irs form 1040 gov or by calling 1-800-908-9946. Irs form 1040 Tax return and tax account transcripts are generally available for the current year and the past three years. Irs form 1040 Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Irs form 1040 Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Irs form 1040 If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Irs form 1040 Check the status of your amended return using Where's My Amended Return? Go to IRS. Irs form 1040 gov and enter Where's My Amended Return? in the search box. Irs form 1040 You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Irs form 1040 It can take up to 3 weeks from the date you mailed it to show up in our system. Irs form 1040 Make a payment using one of several safe and convenient electronic payment options available on IRS. Irs form 1040 gov. Irs form 1040 Select the Payment tab on the front page of IRS. Irs form 1040 gov for more information. Irs form 1040 Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Irs form 1040 Figure your income tax withholding with the IRS Withholding Calculator on IRS. Irs form 1040 gov. Irs form 1040 Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Irs form 1040 Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Irs form 1040 gov. Irs form 1040 Request an Electronic Filing PIN by going to IRS. Irs form 1040 gov and entering Electronic Filing PIN in the search box. Irs form 1040 Download forms, instructions and publications, including accessible versions for people with disabilities. Irs form 1040 Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Irs form 1040 gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Irs form 1040 An employee can answer questions about your tax account or help you set up a payment plan. Irs form 1040 Before you visit, check the Office Locator on IRS. Irs form 1040 gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Irs form 1040 If you have a special need, such as a disability, you can request an appointment. Irs form 1040 Call the local number listed in the Office Locator, or look in the phone book under Unit
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Contact My Local Office in Rhode Island

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City  Street Address  Days/Hours of Service  Telephone* 
Providence  380 Westminster St.
Providence, RI 02903 

Monday-Friday - 8:30 a.m.-4:30 p.m.

 

Services Provided

(401) 525-4282 
Warwick  60 Quaker Ln.
Warwick, RI 02886 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 1:00 p.m. - 2:00 p.m.)

 

Services Provided

(401) 826-4797 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses). 

For information on where to file your tax return please see Where to File Addresses

The Taxpayer Advocate Service: Call (401) 528-1921 in Providence or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these program for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
380 Westminster Street
Providence, RI  02903

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Irs Form 1040

Irs form 1040 35. Irs form 1040   Education Credits Table of Contents Introduction Useful Items - You may want to see: Who Can Claim an Education Credit Qualified Education ExpensesNo Double Benefit Allowed Adjustments to Qualified Education Expenses Introduction For 2013, there are two tax credits available to persons who pay expenses for higher (postsecondary) education. Irs form 1040 They are: The American opportunity credit, and The lifetime learning credit. Irs form 1040 The chapter will present an overview of these education credits. Irs form 1040 To get the detailed information you will need to claim either of the credits, and for examples illustrating that information, see chapters 2 and 3 of Publication 970. Irs form 1040 Can you claim more than one education credit this year?   For each student, you can choose for any year only one of the credits. Irs form 1040 For example, if you choose to take the American opportunity credit for a child on your 2013 tax return, you cannot, for that same child, also claim the lifetime learning credit for 2013. Irs form 1040   If you are eligible to claim the American opportunity credit and you are also eligible to claim the lifetime learning credit for the same student in the same year, you can choose to claim either credit, but not both. Irs form 1040   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity and the lifetime learning credits on a per-student, per-year basis. Irs form 1040 This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. Irs form 1040 Table 35-1. Irs form 1040 Comparison of Education Credits Caution. Irs form 1040 You can claim both the American opportunity credit and the lifetime learning credit on the same return—but not for the same student. Irs form 1040   American Opportunity Credit Lifetime Learning Credit Maximum credit Up to $2,500 credit per eligible student Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly;  $90,000 if single, head of household, or qualifying widow(er) $127,000 if married filing jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable Credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) the Hope credit was claimed) Available for an unlimited number of years Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period beginning during the tax year Available for one or more courses Felony drug conviction At the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Felony drug convictions do not make the student ineligible Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Differences between the American opportunity and lifetime learning credits. Irs form 1040   There are several differences between these two credits. Irs form 1040 These differences are summarized in Table 35-1, later. Irs form 1040 Useful Items - You may want to see: Publication 970 Tax Benefits for Education Form (and Instructions) 8863 Education Credits (American Opportunity and Lifetime Learning Credits) Who Can Claim an Education Credit You may be able to claim an education credit if you, your spouse, or a dependent you claim on your tax return was a student enrolled at or attending an eligible educational institution. Irs form 1040 The credits are based on the amount of qualified education expenses paid for the student in 2013 for academic periods beginning in 2013 and in the first 3 months of 2014. Irs form 1040 For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 education credit(s). Irs form 1040 Academic period. Irs form 1040   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. Irs form 1040 In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. Irs form 1040 Eligible educational institution. Irs form 1040   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Irs form 1040 S. Irs form 1040 Department of Education. Irs form 1040 It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Irs form 1040 The educational institution should be able to tell you if it is an eligible educational institution. Irs form 1040   Certain educational institutions located outside the United States also participate in the U. Irs form 1040 S. Irs form 1040 Department of Education's Federal Student Aid (FSA) programs. Irs form 1040 Who can claim a dependent's expenses. Irs form 1040   If an exemption is allowed as a deduction for any person who claims the student as a dependent, all qualified education expenses of the student are treated as having been paid by that person. Irs form 1040 Therefore, only that person can claim an education credit for the student. Irs form 1040 If a student is not claimed as a dependent on another person's tax return, only the student can claim a credit. Irs form 1040 Expenses paid by a third party. Irs form 1040   Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Irs form 1040 However, qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Irs form 1040 Therefore, you are treated as having paid expenses that were paid by the third party. Irs form 1040 For more information and an example see Who Can Claim a Dependent's Expenses in Pub. Irs form 1040 970, chapter 2 or 3. Irs form 1040 Who cannot claim a credit. Irs form 1040   You cannot take an education credit if any of the following apply. Irs form 1040 You are claimed as a dependent on another person's tax return, such as your parent's return. Irs form 1040 Your filing status is married filing separately. Irs form 1040 You (or your spouse) were a nonresident alien for any part of 2013 and did not elect to be treated as a resident alien for tax purposes. Irs form 1040 Your MAGI is one of the following. Irs form 1040 American opportunity credit: $180,000 or more if married filing jointly, or $90,000 or more if single, head of household, or qualifying widow(er). Irs form 1040 Lifetime learning credit: $127,000 or more if married filing jointly, or $63,000 or more if single, head of household, or qualifying widow(er) . Irs form 1040   Generally, your MAGI is the amount on your Form 1040, line 38, or Form 1040A, line 22. Irs form 1040 However, if you are filing Form 2555, Form 2555–EZ, or Form 4563, or are excluding income from Puerto RIco, add to the amount on your Form 1040, line 38, or Form 1040A, line 22, the amount of income you excluded. Irs form 1040 For details, see Pub. Irs form 1040 970. Irs form 1040    Figure 35-A may be helpful in determining if you can claim an education credit on your tax return. Irs form 1040 The American opportunity credit will always be greater than or equal to the lifetime learning credit for any student who is eligible for both credits. Irs form 1040 However, if any of the conditions for the American opportunity credit, listed in Table 35-1 earlier, are not met for any student, you cannot take the American opportunity credit for that student. Irs form 1040 You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. Irs form 1040 See Pub. Irs form 1040 970 for information on other education benefits. Irs form 1040 Qualified Education Expenses Generally, qualified education expenses are amounts paid in 2013 for tuition and fees required for the student's enrollment or attendance at an eligible educational institution. Irs form 1040 It does not matter whether the expenses were paid in cash, by check, by credit or debit card, or with borrowed funds. Irs form 1040 For course-related books, supplies, and equipment, only certain expenses qualify. Irs form 1040 American opportunity credit: Qualified education expenses include amounts spent on books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. Irs form 1040 Lifetime learning credit: Qualified education expenses include amounts for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance. Irs form 1040 Qualified education expenses include nonacademic fees, such as student activity fees, athletic fees, or other expenses unrelated to the academic course of instruction, only if the fee must be paid to the institution as a condition of enrollment or attendance. Irs form 1040 However, fees for personal expenses (described below) are never qualified education expenses. Irs form 1040 Qualified education expenses for either credit do not include amounts paid for: Personal expenses. Irs form 1040 This means room and board, insurance, medical expenses (including student health fees), transportation, and other similar personal, living, or family expenses. Irs form 1040 Any course or other education involving sports, games, or hobbies, or any noncredit course, unless such course or other education is part of the student's degree program or (for the lifetime learning credit only) helps the student acquire or improve job skills. Irs form 1040 You should receive Form 1098–T, Tuition Statement, from the institution reporting either payments received in 2013 (box 1) or amounts billed in 2013 (box 2). Irs form 1040 However, the amount in box 1 or 2 of Form 1098–T may be different from the amount you paid (or are treated as having paid). Irs form 1040 In completing Form 8863, use only the amounts you actually paid (plus any amounts you are treated as having paid) in 2013, reduced as necessary, as described in Adjustments to Qualified Education Expenses , later. Irs form 1040 Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Irs form 1040 Qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Irs form 1040 If you or the student takes a deduction for higher education expenses, such as on Schedule A or C (Form 1040), you cannot use those expenses in your qualified education expenses when figuring your education credits. Irs form 1040 Qualified education expenses for any academic period must be reduced by any tax-free educational assistance allocable to that academic period. Irs form 1040 See Adjustments to Qualified Education Expenses, later. Irs form 1040 Prepaid Expenses. Irs form 1040   Qualified education expenses paid in 2013 for an academic period that begins in the first 3 months of 2014 can be used in figuring an education credit for 2013 only. Irs form 1040 See Academic period , earlier. Irs form 1040 For example, if you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). Irs form 1040    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). Irs form 1040 Paid with borrowed funds. Irs form 1040   You can claim an education credit for qualified education expenses paid with the proceeds of a loan. Irs form 1040 Use the expenses to figure the credit for the year in which the expenses are paid, not the year in which the loan is repaid. Irs form 1040 Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. Irs form 1040 Student withdraws from class(es). Irs form 1040   You can claim an education credit for qualified education expenses not refunded when a student withdraws. Irs form 1040 No Double Benefit Allowed You cannot do any of the following. Irs form 1040 Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an education credit based on those same expenses. Irs form 1040 Claim more than one education credit based on the same qualified education expenses. Irs form 1040 Claim an education credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). Irs form 1040 Claim an education credit based on qualified education expenses paid with educational assistance, such as a tax-free scholarship, grant, or employer-provided educational assistance. Irs form 1040 See Adjustments to Qualified Education Expenses, next. Irs form 1040 Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid in 2013 by or on behalf of that student under the following rules. Irs form 1040 The result is the amount of adjusted qualified education expenses for each student. Irs form 1040 Tax-free educational assistance. Irs form 1040   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. Irs form 1040 See Academic period , earlier. Irs form 1040      Tax-free educational assistance includes:    Tax-free parts of scholarships and fellowships (see chapter 12 of this publication and chapter 1 of Pub. Irs form 1040 970), The tax-free part of Pell grants (see chapter 1 of Pub. Irs form 1040 970), The tax-free part of employer-provided educational assistance (see Pub. Irs form 1040 970), Veterans' educational assistance (see chapter 1 of Pub. Irs form 1040 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Irs form 1040 Generally, any scholarship or fellowship is treated as tax-free educational assistance. Irs form 1040 However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent the student includes it in gross income (if the student is required to file a tax return) for the year the scholarship or fellowship is received and either: The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. Irs form 1040 970, chapter 1; or The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. Irs form 1040 970, chapter 1. Irs form 1040 You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year received. Irs form 1040 For details, see Adjustments of Qualified Education Expenses, in chapters 2 and 3 of Pub. Irs form 1040 970. Irs form 1040 Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. Irs form 1040 This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). Irs form 1040 If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. Irs form 1040 If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. Irs form 1040 Refunds. Irs form 1040   A refund of qualified education expenses may reduce qualified education expenses for the tax year or may require you to repay (recapture) the credit that you claimed in an earlier year. Irs form 1040 Some tax-free educational assistance received after 2013 may be treated as a refund. Irs form 1040 See Tax-free educational assistance, earlier. Irs form 1040 Refunds received in 2013. Irs form 1040   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. Irs form 1040 Refunds received after 2013 but before your income tax return is filed. Irs form 1040   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. Irs form 1040 Refunds received after 2013 and after your income tax return is filed. Irs form 1040   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received after you file your 2013 income tax return, you may need to repay some or all of the credit that you claimed. Irs form 1040 See Credit recapture, next. Irs form 1040 Credit recapture. Irs form 1040    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. Irs form 1040 You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. Irs form 1040 You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). Irs form 1040 Include that amount as an additional tax for the year the refund or tax-free assistance was received. Irs form 1040 Example. Irs form 1040    You paid $8,000 tuition and fees in December 2013 for your child's Spring semester beginning in January 2014. Irs form 1040 You filed your 2013 tax return on February 3, 2014, and claimed a lifetime learning credit of $1,600 ($8,000 qualified education expense paid x . Irs form 1040 20). Irs form 1040 You claimed no other tax credits. Irs form 1040 After you filed your return, your child withdrew from two courses and you received a refund of $1,400. Irs form 1040 You must refigure your 2013 lifetime learning credit using $6,600 ($8,000 qualified education expenses − $1,400 refund). Irs form 1040 The refigured credit is $1,320 and your tax liability increased by $280. Irs form 1040 You must include the difference of $280 ($1,600 credit originally claimed − $1,320 refigured credit) as additional tax on your 2014 income tax return. Irs form 1040 See the instructions for your 2014 income tax return to determine where to include this tax. Irs form 1040 If you also pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. Irs form 1040 Amounts that do not reduce qualified education expenses. Irs form 1040   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Irs form 1040   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. Irs form 1040 The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses, as defined in Chapter 1 of Pub. Irs form 1040 970. Irs form 1040 The use of the money is not restricted. Irs form 1040   For examples, see chapter 2 in Pub. Irs form 1040 970. Irs form 1040 Figure 35-A. Irs form 1040 Can You Claim an Education Credit for 2013? This image is too large to be displayed in the current screen. Irs form 1040 Please click the link to view the image. Irs form 1040 Figure 35-A. Irs form 1040 Can You Claim an Education Credit for 2013? Prev  Up  Next   Home   More Online Publications