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Irs free tax Publication 597 - Main Content Table of Contents Application of Treaty Personal Services Pensions, Annuities, Social Security, and AlimonyRoth IRAs. Irs free tax Tax-deferred plans. Irs free tax Investment Income From Canadian Sources Other Income Charitable ContributionsQualified charities. Irs free tax Income Tax Credits Competent Authority Assistance How To Get Tax HelpText of Treaty U. Irs free tax S. Irs free tax Taxation Canadian Taxation Application of Treaty The benefits of the income tax treaty are generally provided on the basis of residence for income tax purposes. Irs free tax That is, a person who is recognized as a resident of the United States who has income from Canada, will often pay less income tax to Canada on that income than if no treaty was in effect. Irs free tax Article IV provides definitions of residents of Canada and the United States, and provides specific criteria for applying the treaty in cases where a taxpayer is considered by both countries to be a resident. Irs free tax Saving clause. Irs free tax   In most instances, a treaty does not affect the right of a country to tax its own residents (including those who are U. Irs free tax S. Irs free tax citizens) or of the United States to tax its residents or citizens (including U. Irs free tax S. Irs free tax citizens who are residents of the foreign country). Irs free tax This provision is known as the “saving clause. Irs free tax ”   For example, an individual who is a U. Irs free tax S. Irs free tax citizen and a resident of Canada may have dividend income from a U. Irs free tax S. Irs free tax corporation. Irs free tax The treaty provides a maximum rate of 15% on dividends received by a resident of Canada from sources in the United States. Irs free tax Even though a resident of Canada, the individual is a U. Irs free tax S. Irs free tax citizen and the saving clause overrides the treaty article that limits the U. Irs free tax S. Irs free tax tax to 15%. Irs free tax    Exceptions to the saving clause can be found in Article XXIX, paragraph 3. Irs free tax Treaty-based position. Irs free tax   If you take the position that any U. Irs free tax S. Irs free tax tax is overruled or otherwise reduced by a U. Irs free tax S. Irs free tax treaty (a treaty-based position), you generally must disclose that position on Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), and attach it to your return. Irs free tax Personal Services A U. Irs free tax S. Irs free tax citizen or resident who is temporarily present in Canada during the tax year is exempt from Canadian income taxes on pay for services performed, or remittances received from the United States, if the citizen or resident qualifies under one of the treaty exemption provisions set out below. Irs free tax Income from employment (Article XV). Irs free tax   Income U. Irs free tax S. Irs free tax residents receive for the performance of dependent personal services in Canada (except as public entertainers) is exempt from Canadian tax if it is not more than $10,000 in Canadian currency for the year. Irs free tax If it is more than $10,000 for the year, it is exempt only if: The residents are present in Canada for no more than 183 days in any 12-month period beginning or ending in the year concerned, and The income is not paid by, or on behalf of, a Canadian resident and is not borne by a permanent establishment in Canada. Irs free tax    Whether there is a permanent establishment in Canada is determined by the rules set forth in Article V. Irs free tax Example. Irs free tax You are a U. Irs free tax S. Irs free tax resident employed under an 8-month contract with a Canadian firm to install equipment in their Montreal plant. Irs free tax During the calendar year you were physically present in Canada for 179 days and were paid $16,500 (Canadian) for your services. Irs free tax Although you were in Canada for not more than 183 days during the year, your income is not exempt from Canadian income tax because it was paid by a Canadian resident and was more than $10,000 (Canadian) for the year. Irs free tax Pay received by a U. Irs free tax S. Irs free tax resident for work regularly done in more than one country as an employee on a ship, aircraft, motor vehicle, or train operated by a U. Irs free tax S. Irs free tax resident is exempt from Canadian tax. Irs free tax Income from self-employment (Article VII). Irs free tax   Income from services performed (other than those performed as an employee) are taxed in Canada if they are attributable to a permanent establishment in Canada. Irs free tax This income is treated as business profits, and deductions similar to those allowed under U. Irs free tax S. Irs free tax law are allowable. Irs free tax   If you carry on (or have carried on) business in both Canada and the United States, the business profits are attributable to each country based on the profits that the permanent establishment might be expected to make if it were a distinct and separate person engaged in the same or similar activities. Irs free tax The business profits attributable to the permanent establishment include only those profits derived from assets used, risks assumed, and activities performed by the permanent establishment. Irs free tax   You may be considered to have a permanent establishment if you meet certain conditions. Irs free tax For more information, see Article V (Permanent Establishment) and Article VII (Business Profits). Irs free tax Public entertainers (Article XVI). Irs free tax   The provisions under income from employment or income from self-employment do not apply to public entertainers (such as theater, motion picture, radio, or television artistes, musicians, or athletes) from the United States who receive more than $15,000 in gross receipts in Canadian currency, including reimbursed expenses, from their entertainment activities in Canada during the calendar year. Irs free tax However, this provision for public entertainers does not apply (and the other provisions will apply) to athletes participating in team sports in leagues with regularly scheduled games in both the United States and Canada. Irs free tax Compensation paid by the U. Irs free tax S. Irs free tax Government (Article XIX). Irs free tax   Wages, salaries, and similar income (other than pensions) paid to a U. Irs free tax S. Irs free tax citizen by the United States or any of its agencies, instrumentalities, or political subdivisions for discharging governmental functions are exempt from Canadian income tax. Irs free tax   The exemption does not apply to pay for services performed in connection with any trade or business carried on for profit by the United States, or any of its agencies, instrumentalities, or political subdivisions. Irs free tax Students and apprentices (Article XX). Irs free tax   A full-time student, apprentice, or business trainee who is in Canada to study or acquire business experience is exempt from Canadian income tax on remittances received from any source outside Canada for maintenance, education, or training. Irs free tax The recipient must be or must have been a U. Irs free tax S. Irs free tax resident immediately before visiting Canada. Irs free tax   An apprentice or business trainee can claim this exemption only for a period of one year from the date the individual first arrived in Canada for the purpose of training. Irs free tax Pensions, Annuities, Social Security, and Alimony Under Article XVIII, pensions and annuities from Canadian sources paid to U. Irs free tax S. Irs free tax residents are subject to tax by Canada, but the tax is limited to 15% of the gross amount (if a periodic pension payment) or of the taxable amount (if an annuity). Irs free tax Canadian pensions and annuities paid to U. Irs free tax S. Irs free tax residents may be taxed by the United States, but the amount of any pension included in income for U. Irs free tax S. Irs free tax tax purposes may not be more than the amount that would be included in income in Canada if the recipient were a Canadian resident. Irs free tax Pensions. Irs free tax   A pension includes any payment under a pension or other retirement arrangement, Armed Forces retirement pay, war veterans pensions and allowances, and payments under a sickness, accident, or disability plan. Irs free tax It includes pensions paid by private employers and the government for services rendered. Irs free tax   Pensions also include payments from individual retirement arrangements (IRAs) in the United States, registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs) in Canada. Irs free tax   Pensions do not include social security benefits. Irs free tax Roth IRAs. Irs free tax   A distribution from a Roth IRA is exempt from Canadian tax to the extent it would be exempt from U. Irs free tax S. Irs free tax tax if paid to a U. Irs free tax S. Irs free tax resident. Irs free tax In addition, you may elect to defer any tax in Canada on income accrued within the Roth IRA but not distributed by the Roth IRA. Irs free tax However, you cannot defer tax on any accruals due to contributions made after you become a Canadian resident. Irs free tax Tax-deferred plans. Irs free tax   Generally, income that accrues in a Canadian RRSP or RRIF is subject to U. Irs free tax S. Irs free tax tax, even if it is not distributed. Irs free tax However, a U. Irs free tax S. Irs free tax citizen or resident can elect to defer U. Irs free tax S. Irs free tax tax on income from the plan until the income is distributed. Irs free tax Form 8891 is used to make the election. Irs free tax Annuities. Irs free tax    An annuity is a stated sum payable periodically at stated times, during life, or during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). Irs free tax Annuities do not include: Non-periodic payments, or An annuity the cost of which was deductible for tax purposes. Irs free tax Special rules. Irs free tax    Special rules apply to pensions and annuities with respect to: Short-term assignments, Cross-border commuters, and Individuals who participate in a Canadian qualifying plan. Irs free tax Generally, distributions in such cases are deemed to be earned in the country in which the plan is established, without regard to where the services were rendered. Irs free tax Social security benefits. Irs free tax   U. Irs free tax S. Irs free tax social security benefits paid to a resident of Canada are taxed in Canada as if they were benefits under the Canada Pension Plan, except that 15% of the amount of the benefit is exempt from Canadian tax. Irs free tax Alimony. Irs free tax   Alimony and similar amounts (including child support payments) from Canadian sources paid to U. Irs free tax S. Irs free tax residents are exempt from Canadian tax. Irs free tax For purposes of U. Irs free tax S. Irs free tax tax, these amounts are excluded from income to the same extent they would be excluded from income in Canada if the recipient was a Canadian resident. Irs free tax Investment Income From Canadian Sources The treaty provides beneficial treatment for certain items of Canadian source income that result from an investment of capital. Irs free tax Dividends (Article X). Irs free tax   For Canadian source dividends received by U. Irs free tax S. Irs free tax residents, the Canadian income tax generally may not be more than 15%. Irs free tax   A 5% rate applies to intercorporate dividends paid from a subsidiary to a parent corporation owning at least 10% of the subsidiary's voting stock. Irs free tax However, a 10% rate applies if the payer of the dividend is a nonresident-owned Canadian investment corporation. Irs free tax   These rates do not apply if the owner of the dividends carries on, or has carried on, a business in Canada through a permanent establishment and the holding on which the income is paid is effectively connected with that permanent establishment. Irs free tax Interest (Article XI). Irs free tax   Generally, Canadian source interest received by U. Irs free tax S. Irs free tax residents is exempt from Canadian income tax. Irs free tax   The exemption does not apply if the owner of the interest carries on, or has carried on, a business in Canada through a permanent establishment and the debt on which the income is paid is effectively connected with that permanent establishment. Irs free tax Gains from the sale of property (Article XIII). Irs free tax   Generally, gains from the sale of personal property by a U. Irs free tax S. Irs free tax resident having no permanent establishment in Canada are exempt from Canadian income tax. Irs free tax However, the exemption from Canadian tax does not apply to gains realized by U. Irs free tax S. Irs free tax residents on Canadian real property, and on personal property belonging to a permanent establishment in Canada. Irs free tax   If the property subject to Canadian tax is a capital asset and was owned by the U. Irs free tax S. Irs free tax resident on September 26, 1980, not as part of the business property of a permanent establishment in Canada, generally the taxable gain is limited to the appreciation after 1984. Irs free tax Royalties (Article XII). Irs free tax   The following are exempt from Canadian tax: Copyright royalties and other like payments for the production or reproduction of any literary, dramatic, musical, or artistic work (other than payments for motion pictures and works on film, videotape, or other means of reproduction for use in connection with television, which may be taxed at 10%), Payments for the use of, or the right to use, computer software, Payments for the use of, or the right to use, any patent or any information concerning industrial, commercial, or scientific experience (but not within a rental or franchise agreement), and Payments for broadcasting as agreed to in an exchange of notes between the countries. Irs free tax   This rate or exemption does not apply if the owner of the royalties carries on, or has carried on, a business in Canada through a permanent establishment and the right or property on which the income is paid is effectively connected with that permanent establishment. Irs free tax   This exemption (or lower rate) does not apply to royalties to explore for or to exploit mineral deposits, timber, and other natural resources. Irs free tax Other Income Generally, Canadian source income that is not specifically mentioned in the treaty, may be taxed by Canada. Irs free tax Gambling losses. Irs free tax   Canadian residents may deduct gambling losses in the U. Irs free tax S. Irs free tax against gambling winnings in the U. Irs free tax S. Irs free tax in the same manner as a U. Irs free tax S. Irs free tax resident. Irs free tax Charitable Contributions United States income tax return. Irs free tax   Under Article XXI, you may deduct contributions to certain qualified Canadian charitable organizations on your United States income tax return. Irs free tax Besides being subject to the overall limits applicable to all your charitable contributions under U. Irs free tax S. Irs free tax tax law, your charitable contributions to Canadian organizations (other than contributions to a college or university at which you or a member of your family is or was enrolled) are subject to the U. Irs free tax S. Irs free tax percentage limits on charitable contributions, applied to your Canadian source income. Irs free tax If your return does not include gross income from Canadian sources, charitable contributions to Canadian organizations are generally not deductible. Irs free tax Example. Irs free tax You are a U. Irs free tax S. Irs free tax citizen living in Canada. Irs free tax You have both U. Irs free tax S. Irs free tax and Canadian source income. Irs free tax During your tax year, you contribute to Canadian organizations that would qualify as charitable organizations under U. Irs free tax S. Irs free tax tax law if they were U. Irs free tax S. Irs free tax organizations. Irs free tax To figure the maximum amount of the contribution to Canadian organizations that you can deduct on your U. Irs free tax S. Irs free tax income tax return, multiply your adjusted gross income from Canadian sources by the percentage limit that applies to contributions under U. Irs free tax S. Irs free tax income tax law. Irs free tax Then include this amount on your return along with all your domestic charitable contributions, subject to the appropriate percentage limit required for contributions under U. Irs free tax S. Irs free tax income tax law. Irs free tax The appropriate percentage limit for U. Irs free tax S. Irs free tax tax purposes is applied to your total adjusted gross income from all sources. Irs free tax Qualified charities. Irs free tax   These Canadian organizations must meet the qualifications that a U. Irs free tax S. Irs free tax charitable organization must meet under U. Irs free tax S. Irs free tax tax law. Irs free tax Usually an organization will notify you if it qualifies. Irs free tax For further information on charitable contributions and the U. Irs free tax S. Irs free tax percentage limits, see Publication 526, Charitable Contributions. Irs free tax Canadian income tax return. Irs free tax   Under certain conditions, contributions to qualified U. Irs free tax S. Irs free tax charitable organizations may also be claimed on your Canadian income tax return if you are a Canadian resident. Irs free tax Income Tax Credits The treaty contains a credit provision (Article XXIV) for the elimination of double taxation. Irs free tax In general, the United States and Canada both allow a credit against their income tax for the income tax paid to the other country on income from sources in that other country. Irs free tax For detailed discussions of the U. Irs free tax S. Irs free tax income tax treatment of tax paid to foreign countries, see Publication 514, Foreign Tax Credit for Individuals. Irs free tax See paragraphs (4) and (5) of Article XXIV for certain provisions that affect the computation of the credit allowed by the United States for Canadian income taxes paid by U. Irs free tax S. Irs free tax citizens residing in Canada. Irs free tax Competent Authority Assistance Under Article XXVI, a U. Irs free tax S. Irs free tax citizen or resident may request assistance from the U. Irs free tax S. Irs free tax competent authority when the actions of Canada, the United States, or both, potentially result in double taxation or taxation contrary to the treaty. Irs free tax The U. Irs free tax S. Irs free tax competent authority may then consult with the Canadian competent authority to determine if the double taxation or denial of treaty benefits in question can be avoided. Irs free tax If the competent authorities are not able to reach agreement in a case, binding arbitration proceedings may apply. Irs free tax It is important that your request for competent authority assistance be made as soon as you have been notified by either Canada or the United States of proposed adjustments that would result in denial of treaty benefits or in double taxation. Irs free tax This is so that implementation of any agreement reached by the competent authorities is not barred by administrative, legal, or procedural barriers. Irs free tax For information that you should include with your request for competent authority assistance, see Revenue Procedure 2006-54, 2006-49 IRB 1035, available at www. Irs free tax irs. Irs free tax gov/irb/2006-49_IRB/ar13. Irs free tax html. Irs free tax The request should be addressed to:  Deputy Commissioner (International) Large Business and International Division Attn: Office of Tax Treaty  Internal Revenue Service 1111 Constitution Ave. Irs free tax , NW Routing: MA3-322A Washington, D. Irs free tax C. Irs free tax 20024 In addition to a timely request for assistance, you should take the following measures: File a timely protective claim for credit or refund of U. Irs free tax S. Irs free tax taxes on Form 1040X, Form 1120X, or amended Form 1041, whichever is appropriate. Irs free tax This will, among other things, give you the benefit of a foreign tax credit in case you do not qualify for the treaty benefit in question. Irs free tax For figuring this credit, attach either Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), or Form 1118, Foreign Tax Credit — Corporations, as appropriate. Irs free tax Attach your protective claim to your request for competent authority assistance. Irs free tax Take appropriate action under Canadian procedures to avoid the lapse or termination of your right of appeal under Canadian income tax law. Irs free tax How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS and the Canada Revenue Agency in several ways. Irs free tax Text of Treaty You can get the text of the U. Irs free tax S. Irs free tax —Canada income tax treaty from: Superintendent of Documents U. Irs free tax S. Irs free tax Government Printing Office P. Irs free tax O. Irs free tax Box 371954 Pittsburgh, PA 15250-7954 The treaty can also be found on the Internet at IRS. Irs free tax gov. Irs free tax U. Irs free tax S. Irs free tax Taxation During the filing season, the IRS conducts a taxpayer assistance program in Canada. Irs free tax To find out if IRS personnel will be in your area, you should contact the consular office at the nearest U. Irs free tax S. Irs free tax Embassy or consulate. Irs free tax Mail. Irs free tax For answers to technical or account questions, you can write to:   Internal Revenue Service International Section Philadelphia, PA 19255-0525 Phone. Irs free tax You can call the IRS for help at (267) 941-1000 (not a toll-free call). Irs free tax Canadian Taxation You can get information on Canadian taxation from the Canada Revenue Agency. Irs free tax The International Tax Services Office can be contacted on 1-800-267-5177 (from anywhere in Canada and the U. Irs free tax S. Irs free tax ) or on the Internet at www. Irs free tax cra-arc. Irs free tax gc. Irs free tax ca. Irs free tax Prev  Up  Next   Home   More Online Publications
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SOI Tax Stats - Historical Data Tables

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All Historical tables are available in Microsoft Excel file format. 

Excel Viewer


Tables by Number:

1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 (expanded version), 13 (expanded version), 14a, 14b, 15, 16 (expanded version), 17, 18, 19 , 20, 21, 22a, 22b, 23, 24.

 


Table Descriptions

Table 1.  Individual Income Tax Returns: Selected Income and Tax Items.

Table 2.  Individual Income and Tax Data, by State and Size of Adjusted Gross Income.

Table 3.  Number of Individual Income Tax Returns, Income, Exemptions and Deductions, Tax, and Average Tax, by Size of Adjusted Gross Income.

Table 4.  Comparison of Personal Income in the National Income and Product Accounts (NIPA) with Adjusted Gross Income (AGI).  (Discontinued)

Table 5.  Personal Income and Total Adjusted Gross Income Based on Individual Income Tax Returns per National Income and Product Accounts (NIPA).  (Discontinued)

Table 6.  Total Adjusted Gross Income Estimated from National Income and Product Accounts (NIPA) and as Reported on Individual Income Tax Returns per SOI.  (Discontinued)

Table 7.  Standard, Itemized, and Total Deductions Reported on Individual Income Tax Returns.

Table 8.  Personal Income per National Income and Product Accounts (NIPA), and Taxable Income and Individual Income Tax per SOI.

Table 9.  Number of Individual Income Tax Returns, by Type of Tax Settlement.

Table 10.  Nonfarm Sole Proprietorship Returns: Selected Income Statement Items for Specified Income.

Table 11.  Partnership Returns: Selected Balance Sheet and Income Statement Items for Specified Income Years.

Table 12.  Number of Business Income Tax Returns, by Size of Business for Income Years, 1990–2009. Expanded Version.

Table 13.  Corporation Income Tax Returns: Balance Sheet, Income Statement, and Tax Items for Income Years, 1990–2009. Expanded Version.

Table 14a.  Corporation Income Tax Returns: Selected Balance Sheet, Income Statement, and Tax Items, by Standard Industrial Classification (SIC) Industrial Division.

Table 14b.  Corporation Income Tax Returns: Selected Balance Sheet, Income Statement, and Tax Items, by North American Industry Classification System (NAICS) Industrial Sector.

Table 15.  Corporation Profits Before Tax per National Income and Product Accounts (NIPA) and per SOI, and Income Subject to Tax per SOI, Income Years 1960–2007.

Table 16.  Nonprofit Charitable Organization and Domestic Private Foundation Information Returns, and Exempt Organization Business Income Tax Returns: Selected Financial Data. Expanded Version.

Table 17.  Taxable Estate Tax Returns as a Percentage of Adult Deaths, Selected Years of Death, 1934–2008.

Table 18.  Treasury Department Gross Tax Collections: Amount Collected by Quarter and Fiscal Year. (Discontinued)

Table 19.  Internal Revenue Tax Refunds: Amount Refunded by Quarter and Fiscal Year. (Discontinued)

Table 20.  Federal Excise Taxes Reported to or Collected by the Internal Revenue Service, Alcohol and Tobacco Tax and Trade Bureau, and Customs Service, by Type of Excise Tax.

Table 21.  Selected Returns and Forms Filed or To Be Filed by Type During Specified Calendar Years.

Table 22a.  Taxpayers Receiving Assistance.

Table 22b.  IRS Assistance for Individual Taxpayers.

Appendix to Selected Historical and Other Data Tables

Table 23.  U.S. Individual Income Tax: Personal Exemptions and Lowest and Highest Bracket Tax Rates, and Tax Base for Regular Tax.

Table 24.  U.S. Corporation Income Tax: Tax Brackets and Rates.

 


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Page Last Reviewed or Updated: 19-Jun-2013

The Irs Free Tax

Irs free tax 10. Irs free tax   Retirement Savings Contributions Credit (Saver's Credit) Table of Contents Full-time student. Irs free tax Adjusted gross income. Irs free tax Distributions received by spouse. Irs free tax Testing period. Irs free tax If you or your employer make eligible contributions (defined later) to a retirement plan, you may be able to take a credit of up to $1,000 (up to $2,000 if filing jointly). Irs free tax This credit could reduce the federal income tax you pay dollar for dollar. Irs free tax Can you claim the credit?   If you or your employer make eligible contributions to a retirement plan, you can claim the credit if all of the following apply. Irs free tax You are not under age 18. Irs free tax You are not a full-time student (explained next). Irs free tax No one else, such as your parent(s), claims an exemption for you on their tax return. Irs free tax Your adjusted gross income (defined later) is not more than: $59,000 for 2013 ($60,000 for 2014) if your filing status is married filing jointly, $44,250 for 2013 ($45,000 for 2014) if your filing status is head of household (with qualifying person), or $29,500 for 2013 ($30,000 for 2014) if your filing status is single, married filing separately, or qualifying widow(er) with dependent child. Irs free tax Full-time student. Irs free tax   You are a full-time student if, during some part of each of 5 calendar months (not necessarily consecutive) during the calendar year, you are either: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by either a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or a state, county, or local government. Irs free tax You are a full-time student if you are enrolled for the number of hours or courses the school considers to be full-time. Irs free tax Adjusted gross income. Irs free tax   This is generally the amount on line 38 of your 2013 Form 1040 or line 22 of your 2013 Form 1040A. Irs free tax However, you must add to that amount any exclusion or deduction claimed for the year for: Foreign earned income, Foreign housing costs, Income for bona fide residents of American Samoa, and Income from Puerto Rico. Irs free tax Eligible contributions. Irs free tax   These include: Contributions to a traditional or Roth IRA, Elective deferrals, including amounts designated as after-tax Roth contributions, to: A 401(k) plan (including a SIMPLE 401(k)), A section 403(b) annuity, An eligible deferred compensation plan of a state or local government (a governmental 457 plan), A SIMPLE IRA plan, or A salary reduction SEP, and Contributions to a section 501(c)(18) plan. Irs free tax They also include voluntary after-tax employee contributions to a tax-qualified retirement plan or a section 403(b) annuity. Irs free tax For purposes of the credit, an employee contribution will be voluntary as long as it is not required as a condition of employment. Irs free tax Reducing eligible contributions. Irs free tax   Reduce your eligible contributions (but not below zero) by the total distributions you received during the testing period (defined later) from any IRA, plan, or annuity included earlier under Eligible contributions. Irs free tax Also reduce your eligible contributions by any distribution from a Roth IRA that is not rolled over, even if the distribution is not taxable. Irs free tax      Do not reduce your eligible contributions by any of the following: The portion of any distribution which is not includible in income because it is a trustee-to-trustee transfer or a rollover distribution. Irs free tax Any distribution that is a return of a contribution to an IRA (including a Roth IRA) made during the year for which you claim the credit if: The distribution is made before the due date (including extensions) of your tax return for that year, You do not take a deduction for the contribution, and The distribution includes any income attributable to the contribution. Irs free tax Loans from a qualified employer plan treated as a distribution. Irs free tax Distributions of excess contributions or deferrals (and income attributable to excess contributions and deferrals). Irs free tax Distributions of dividends paid on stock held by an employee stock ownership plan under section 404(k). Irs free tax Distributions from an eligible retirement plan that are converted or rolled over to a Roth IRA. Irs free tax Distributions from a military retirement plan. Irs free tax Distributions received by spouse. Irs free tax   Any distributions your spouse receives are treated as received by you if you file a joint return with your spouse both for the year of the distribution and for the year for which you claim the credit. Irs free tax Testing period. Irs free tax   The testing period consists of: The year in which you claim the credit, The 2 years before the year in which you claim the credit, and The period after the end of the year in which you claim the credit and before the due date of the return (including extensions) for filing your return for the year in which you claimed the credit. Irs free tax Example. Irs free tax You and your spouse filed joint returns in 2011 and 2012, and plan to do so in 2013 and 2014. Irs free tax You received a taxable distribution from a qualified plan in 2011 and a taxable distribution from an eligible section 457(b) deferred compensation plan in 2012. Irs free tax Your spouse received taxable distributions from a Roth IRA in 2013 and tax-free distributions from a Roth IRA in 2014 before April 15. Irs free tax You made eligible contributions to an IRA in 2013 and you otherwise qualify for this credit. Irs free tax You must reduce the amount of your qualifying contributions in 2013 by the total of the distributions you and your spouse received in 2011, 2012, 2013, and 2014. Irs free tax Maximum eligible contributions. Irs free tax   After your contributions are reduced, the maximum annual contribution on which you can base the credit is $2,000 per person. Irs free tax Effect on other credits. Irs free tax   The amount of this credit will not change the amount of your refundable tax credits. Irs free tax A refundable tax credit, such as the earned income credit or the additional child tax credit, is an amount that you would receive as a refund even if you did not otherwise owe any taxes. Irs free tax Maximum credit. Irs free tax   This is a nonrefundable credit. Irs free tax The amount of the credit in any year cannot be more than the amount of tax that you would otherwise pay (not counting any refundable credits or the adoption credit) in any year. Irs free tax If your tax liability is reduced to zero because of other nonrefundable credits, such as the education credits, then you will not be entitled to this credit. Irs free tax How to figure and report the credit. Irs free tax   The amount of the credit you can get is based on the contributions you make and your credit rate. Irs free tax The credit rate can be as low as 10% or as high as 50%. Irs free tax Your credit rate depends on your income and your filing status. Irs free tax See Form 8880, Credit for Qualified Retirement Savings Contributions, to determine your credit rate. Irs free tax   The maximum contribution taken into account is $2,000 per person. Irs free tax On a joint return, up to $2,000 is taken into account for each spouse. Irs free tax   Figure the credit on Form 8880. Irs free tax Report the credit on line 50 of your Form 1040 or line 32 of your Form 1040A, and attach Form 8880 to your return. Irs free tax Prev  Up  Next   Home   More Online Publications